Prerequisites: Have business units or executives bugging you to get better visibility of their enterprise information. Have been frustrated by weaving together data from different ERP modules, then having to integrate that data to non-ERP systems and present interactive, “actionable” scoreboards, dashboards and reports. IdealCMS are Enterprise Business Architects who over the last 6 years have developed practical methods and automation that integrates 5 enterprise disciplines: Enterprise Architecture, Project Portfolio Management, Performance Management, ROI Analysis and Change Adoption. Mr. Guevara developed the strategic, business and metrics alignment processes from over 25 years of best practices from the greatest leaders and writers in business and technology.
Enterprise Business Intelligence from ERP Systems Dave Guevara IdealCMS [email_address] www.idealcms.com
Challenges in Providing Enterprise Information that People want to Use Lot’s of busy reports and “so what” data No clear visibility of cause & effect Where is the business value? Need it sooner than later Transactions data from ERP isn’t enough
The “What” and “How” Dilemma Iteration How Should You Do It? Bridge the “ What ” to the “ How ” with Business Value Alignment Delivering Maximum Value Technical Requirements Decomposition Delivery Project Development Test & Validation Test Requirements Development Cost Justification Resource Planning Project Objectives Ideas Prioritization Prioritization Competitive Strength / Market attractiveness Business Objectives What Should We Do? Business Value Roadmap Business Milestone Roadmap Cost Justification Resource Planning Prioritization Business Milestone Roadmap Project Objectives Ideas Prioritization Project A Business Milestone Roadmap Cost Justification Resource Planning Prioritization Business Milestone Roadmap Project Objectives Ideas Prioritization Project B Business Milestone Roadmap Cost Justification Resource Planning Prioritization Business Value Roadmap Project Objectives Ideas Prioritization Project C
Business Value Milestones Connect Your Value to Project Milestones Business Value Milestone Resource & Asset Allocation Budgets (Opexp, Capex) & Cash Flow Scope, Change, and Cost Control Opportunity Management Time Sequencing Capability Development Resource Planning Risk Assessment & Management Business Impact & Performance Goals Functions & Features
Integrates operational applications for ERP, CRM, financials, etc.
Prominent in data warehousing since it balances between tracking data lineage and repurposing data to create new structures (e.g. aggregates and time series)
Broader in scope than operational and analytic MDM and may encompass both
1 st Step in Designing Software Solution for MDM
Decide data model of business entities
Hierarchical, multidimensional, object-oriented, relational or flat
“ Move past reacting (like out-of-sync systems) to proactively searching for opportunities for improvement (like more systems in the MDM grid).”
TDWI Study “Master Data Management: Consensus-Driven Data Definitions for Cross-Application Consistency” by Philip Russom Oct 2006
Business Value Driven Design of Enterprise Information Only 5 ways to impact business value Use market or service driven (not vendor) approach 4 levels of data abstraction Business context comes from metadata
The Investors’ View River of Cash™ Flowing through Your Business River of Cash™ is a trademark of IdealCMS Cash Flow: Financial Context for Decisions IT & Product Financing (FCF) Investors & Debtors Investment Loans & Leasing Returns to Inve s tors Returns to D e btors Investing (ICF) IT Systems & Projects Fixed Assets & Investments Operating Expenses Paid Collected Sales Operating (OCF) Revenue & Costs Processes & People Project Pipeline Increase Business Value from IT is from:
Improve Process Efficiency
Mitigate Risks, Improve Governance
Your Company’s River of Cash™ Your Company Collections [direct, channels…] (OCF in) Labor Operating Expenses (OpExp) Paid Non-Labor Operating Expenses Paid Draws from LOC (FCF in) Debt Repayment (FCF out) Bank Fixed Assets, PP&E (ICF out) Direct Cost of Goods/Sales Paid Shareholders Unusual & Spec Project Expenses Paid Dividends (FCF out) Paid In Capital (FCF in)
Align Sales to Customers’ Pain MARKETS CUSTOMERS “ Must Have” Service &/or Products “ Pain” Based Value Proposition VALIDATE , VALIDATE , VALIDATE
Consistent sales growth requires:
Consistent sales activity
Clear “Pain” based value proposition
Perceived “Must Have” Services/Products
Constantly VALIDATE your customer’s Pain (it changes), THEIR understanding of your Value Proposition, and THEIR decision if you are “Must Have”.
Your Company Collected Sales
4 Levels of Data to Information Abstraction Decision Level Strategic Management Task, Event Problem Solving Task Data Abstraction KPI, Goals, Goodness Actionable Metrics Business Context & Sequence of Transactions Transaction Type of Information Performance, Financial, Economic Economic, Financial, Operational Operational, Financial Operational, Financial
Portfolio Management Processes Simplify Business Alignment Into Data Architecture Strategies Risk Management Methodologies (eg SOA, MDM, CDI) Design Processes Enterprise Architecture Business Value Governance Initiatives Portfolio Management Technologies Visibility Projects Architectures Roadmaps Architecture Blueprints Investments Budgets Best Practices
Line-of-Sight Across Levels of Decision Making Decisions Revenue & Profit Results Desired Outcomes Investors Board of Directors Executive Team Management Teams & Key Employees Work Groups & Customers Vendors & Subcontractors Supply Chains Distribution Channels Stakeholders Line of Sight Needs Goals
Alignment For Actionable Metrics Organization Structure Actionable Metrics Operations Model Economic Model Operations Metrics Financial Metrics
The business and strategic alignment process for any enterprise program (EDW, BI, EA) is the same as that used in IT Portfolio Management. So don’t reinvent the wheel, use the pieces that help you.
Often the business or executive teams will not provide the strategies or initiatives with enough clarity that they are actionable at a design level. Plan on doing your own alignment analysis and to facilitate this process with your business, process and finance SME’s.
The metrics alignment process runs in parallel to the business/strategic alignment process, however the outcomes are Actionable Metrics, Back-of-the Envelop metrics, Key Performance Indicators (KPI) and Enterprise metrics (side view).
Using CDI Enables Enterprise Business Intelligence from ERP and Non-ERP Sources Timeliness and time frames Cross-correlation of data into decisioning context Business context to provide meaning Goals to provide measures of goodness
Overstock architecture diagram is not available electronically per conditions applied by Overstock.com in how their system is briefed.
The system is described in the Speakers notes.
TDWI MDM Study Mid-2006 of MDM Business Entities
Biz Partners 49%
Sales Contracts 25%
Physical Assets 21%
% of 741 respondents that identified Business Entity as important in MDM. TDWI Study “Master Data Management: Consensus-Driven Data Definitions for Cross-Application Consistency” by Philip Russom Oct 2006
Relating Financial Data to Operational Data Debit Credit Account Type AR AP Inv Assets Liab Equity Account 1100 1200 2000 2500 … Report Metric Sales by Division Depreciation Account Inversion +1 -1 Chart of Accounts 1100 1200 2000 2500 … Credit Inversion +1 +1 Filter Attributes xxx yyy zzz xxx yyy zzz
Identify early on where you will need trend or historical reporting capabilities.
When relating financial data to operational, sales or service data design:
COA mapping tables
Sign inversion tables
User interface for finance or accounting to manage these mappings
Define and document the different definitions for the core data entities (customer, products, partners, etc.), then determine what is the master source of record and the defining business context.
Whenever possible establish data structure standards for any new software development and application enhancements. Same goes for new design approaches like SOA.
Determine where to incorporate data transformation mapping tables based on development standards, data accessibility and system architecture.
Develop a roadmap and a data architecture blueprint for your data migration plans to your preferred future data structure.
Develop an approach (even if sub-optimal) to work with what you have as data sources.
When all else fails, and depending on your BI, ETL and database technologies, pull the data into a BI mart.
“ Side View” Data for EA, SOX and SLA Side View data is about the systems, processes and performance SOX compliance data may provide visibility onto candidates for process improvement Correlating system/app monitoring data with transaction loads may highlight cause & effect
When designing your primary EDW/BI or enterprise information systems remember to look at how you will see your system, processes and events from a side view.
Side views may be for compliance (SOX), enterprise architecture (EA), service level performance (SLA), disaster recovery (DRM)
Relating system monitoring data to transactional data may provide unique visibility into cause & effect.
SOX compliance is based on the five cash cycles.
Since logging functions can produce huge files that just burn storage and provide little value, evaluate where to insert event data writes.
Interrogating transaction rates and latency from the transactional records can provide insights into data loading issues, timing problems, demand surges, performance hits due to external data feeds, and possibly SLA conditions at end-user experience level.