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Bi kpmg


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Bi kpmg

  1. 1. PERFORMANCE & TECHNOLOGY Business Intelligence A good servant but a bad master David Slánský 28th April 2010 ADVISORY
  2. 2. Instead of introduction – the real world today Combined development of management and Up to half of executive information infrastructures results in a 34% managers place no confidence in the numbers performance improvement. presented to them. Less than 50% of UK firms Estimates suggest that 75 believe that their percent of Business enterprise performance Intelligence projects ere management systems perceived to have failed deliver useful insight Two thirds of executives Despite the evidence presented to feel that the quality of and support the success of BI, there is ample timely access to data is evidence that many organisations have poor and inconsistent made little progress towards effective BI. More worrying still is that of those whom have tried have failed to achieve the expected benefits 2
  3. 3. Key questions Where will you go? What do you need to overcome? How to get reports understanding under control? 3
  4. 4. Modern BI solutions should prove its value and increase business flexibility A recent survey of 700 While typical BI solutions support… … modern solution should bring automotive distributors found that there are a number of operational practices that correlate positively to high performance. Management reporting Flexible information In a major initiative, there was delivery established a complete new Standard business structure for controlling the financial reporting systems of reporting Ahead thinking support this large U.S. Automotive Distributor. The company lacked consensus on how to Regulatory reporting Decisions and reasoning improve its reporting, and was suffering from an excess of manual work, a high level of Collaboration, mutual errors, and a variety of different approaches across understanding the business. Recent Risk management technology investments had been perceived as misspent Churn management and conflicting. The review involved interviewing key executives Campaign and developing a business case for a new approach that management Trust could generate over US$6 million in productivity savings and over US$2 million in cost savings. 4
  5. 5. The future will bring trust and collaboration If you are using multiple information systems, how do you accurately measure 1. Formal governance environment for financial performance across different areas of your organization? increased reliability The consolidation of information needs and subsequent consolidation of 2. Social BI decision support systems into one management information system allowed for far greater 3. Better business adoption / semantic automation by reducing the need for time consuming manual planning and 4. Increased emphasis on flexibility and consolidation process. This meant that the client also has a common global finance time-to-market reduction platform delivering essential financial data to help them track performance both at a 5. Shift to decision making system group and subgroup level in their global operations. Furthermore, the 6. Integration in all aspects implementation of the new system resulted in a 20 percent reduction in costs. 7. Tighter alignment to strategy execution 5
  6. 6. Key questions Where will you go? What do you need to overcome? How to get reports understanding under control? 6
  7. 7. Business users among organization are facing similar issues This global mining company found that a simplified data model was the answer to surviving in a Current situation Impacts turbulent market. For even the most adept manager, Silo-based approach; user requirements Requirements flood having to manage commodity prices that fluctuate over 200 isolated percent in one year is more than just a challenge. Fortunately, this Solution architecture inflexible (series of loosely Long delivery terms global mining house was linked data marts) prepared. Through a timely examination of the drivers of value, they were able to identify Users don’t understand solution content in the Users don’t trust the solution which were the key to their business and what had to be same way Users require redundant work reported to the board as the Management -> consolidation markets changed. By using the insights gained from the value- driver analysis, the client was able to distill the key elements of the Unclear priorities and delivery terms Workarounds data model required for fast Disillusion / loss of credibility decision making. A faster data collection process was established. By using a Outputs don’t meet the quality requirements Disillusion / loss of credibility common data model, with clearly (also due to source systems problems) Repeated requirements agreed common definitions, the organization was able to make Workaround immediate decisions about stopping, resuming, and starting investments. They could clearly forecast the impact of the turbulent Unclear data lineage Loss of credibility market place and had the ability to make critical operational Underestimated communication and PR Loss of credibility decisions. 7
  8. 8. There is no one size fits all solution… but there are still some generic “what has worked” hints… A client was at a loss to explain sudden and unexpected volatility in key cost lines during the recent economic turbulence. Management had Solution Environment development also often failed to notice poor operations performance of key indicators in time to make necessary decisions and changes. Poor information, governance Business users 1 Solution Architecture 3 and inadequate processes had understanding BI components significantly contributed to poor Content understanding Involved in EA management decisions that Functionality understanding Design security Running application 5 ‘cost’ the organization over Change management Availability US$72 million. They prioritized Security 4 Resources, budget from hundreds of performance measures to produce a Consolidation, Users requirements Development projects manageable number such as: prioritization volume of customers; churn rate; revenue; margin. This 2 helped the client to create a 6 simulation model which enabled him to assess the outcome of changing variables such as price and customer Budget, Budget, resources service, and learn how various measures are interrelated. As a result, the business now has an understanding of how a change in price and speed of customer service responses affect their performance. 8
  9. 9. Key questions Where will you go? What do you need to overcome? How to get reports understanding under control? 9
  10. 10. May be you have the “déjà vu” feeling You may consider using frameworks for cash What does What is the This code reporting and forecasting should not which reduced the financial this mean? difference? close period from 25 to 11 apply here days. By doing so, you may be PaidMovement OSMovement IncurredMovement IncurredFrom Incurred As At SettCcyISO ReportingClass1 ReportingClass2 EventCode EventName able to release up to 44092 99488 68852 50000 67166 USD Personal Accident Personal Accident 60007 tetewrtwert 94591 90460 87270 50000 12588 USD Personal Accident Personal Accident 60007 tertwertwer US$29.2 million in cash. 77146 4872 50671 50000 63242 USD Personal Accident Personal Accident 60007 gsdfgsdhg After three weeks a client 91854 36637 48384 50000 36584 USD Medical Expenses Medical Expenses 50149 jdfhfdsgsf 63759 32479 26252 50000 25704 USD Contingency Contingency 50315 ewrtwertre diagnosed the issues and 37632 81494 67870 50000 89962 USD Personal Accident Personal Accident 60005 gsdfgdsggg began working on 20096 46492 80184 50000 79246 USD Personal Accident Personal Accident 60004 gbbvscbbsdfb 14257 31754 47366 50000 44500 USD Medical Expenses Medical Expenses 50298 gsdgdsfgsdfg redefining the KPIs aligned 2919 40800 37178 50000 99374 USD Personal Accident Personal Accident 50299 gdsgsdfgdfsgds 61176 91362 40666 50000 8043 USD Medical Expenses Medical Expenses 50149 gsfdgsfdgdfg to the strategic objectives 47536 25570 9927 50000 7049 GBP Bloodstock Bloodstock 50325 fdgsdgdsfgd to design a mock-up board 60923 86863 6586 50000 56982 GBP Bloodstock Bloodstock 60002 rewtwretrwe 34803 71609 50302 50000 45870 GBP Bloodstock Bloodstock 60002 trewtrwtrt reporting pack. 86536 55742 21684 50000 79503 GBP Bloodstock Bloodstock 60002 twertwretwr This created a transparent view of working capital and cash management which gave investors clarity on performance. Can I see the detail? What are other classes? This is I have slightly incorrect! different number. Why? 10
  11. 11. What do you miss? Is it possible to achieve a coherent view of the truth in a cost-effective manner when your business has more than a hundred billion dollars Storyline of revenue, over 50,000 employees, global operations with hundreds of products and channels? For this global oil company the answer was an Transparency emphatic “yes.” After many years of significant Highlights systems investments, the client still found they had inconsistent reporting methods — they were no closer to obtaining a “single version Decision of the truth.” The proliferation of systems, data warehouses, and making reports seemed to be getting worse. It was clear that continuing simplification with the same approach. Segregation the governance model into three layers helped. The first was to identify who really owned and controlled the information, the second was to look at who used the information, and the third was who produced it. By using advanced facilitation methods and tools, this organization was able to define clear roles and responsibilities for ownership and used a shared service capability to deliver master-data management. The outcome led to significant improvements in data quality and consistency, lower cost, and faster decision making. Common Structure understanding 11
  12. 12. Common understanding environment What do you do if your company has grown through multiple acquisitions — and investors want you to drive synergy benefits — but you can’t get global or regional insight into key Central operational components? Report description Encyclopedia You need to focus. A leading Header • Name, type, purpose, owner, author, user global brewer grew through more groups, certification date etc. Business dictionary than twenty acquisitions, Single business definition however, each acquired Data lineage diagram: company had different ways of defining channels, customers, Application portfolio and products. This made internal Consolidated Vodafone systems description benchmarking difficult, if not Report Report + impossible. Having tried to XYZ XYZ standardize the information Reports portfolio Report’s data overview: Consolidated reports catalogue several times, they realized that a different approach was required. The way out was to become explicit about the Users catalogue requirements of each key client Report’s elements overview: • Name stakeholder to execute the • Type strategic plan. • Update mechanism, etc. Any other catalogue As a result, they were able to reduce the volume of information requirements significantly. This in turn led to the adoption of simplified processes, systems, and data model to deliver the information required to make strategic decisions for their global operation. 12
  13. 13. There is not that much encyclopedia elements Is it possible to be more effective and efficient at the same time? A global automotive supplier has learned that a sharp focus on what matters can provide more incisive information at a significantly lower cost. Rather than the classic systems approach of collecting masses of conflicting business requirements and then trying to reconcile this into a coherent set of requirements, this global supplier chose to start with the core information required to enable the business model. This involved a detailed analysis of the existing business model and the strategy. By re-defining the measures that reflect real value, the company set new key performance indicators (KPIs), covering performance from a financial, operational, and risk perspective. Reports were standardized and the number and size of documents were reduced, eliminating unnecessary information. The result was a significant reduction in the number of reports and less duplication of redundant information. The client is now aware that, to steer the business and to support its strategy, it needs more than just KPIs: it must harmonize its planning, forecasting, and reporting so that all link into the same information. 13
  14. 14. Although it looks complicated it is not A large energy company was experiencing long and inconsistent planning and forecasting cycles partially as a result of poorly configured planning technology. hey reduced data and system proliferation by decreasing the total number of applications by more than 50 percent and the total number of reports from over 700 to less than 125. With this significant reduction in application complexity, support hours were reduced by 15 percent and their planning cycles are five days shorter. 14
  15. 15. So you have experienced that … … modern BI solutions take the line of flexible, anticipative, collaborative partner for your decision making process at any point of your organization. … all of you face common teething problems which can be solved with business involvement. … you will get the desired effect as soon as you will understand and trust your solution. … simplicity and out of the box thinking are the key success enablers of your BI governance changes. 15
  16. 16. What to do next? Tomorrow Identify hot areas and involved colleagues. Get the business reasoning – it is possible! Find one area where you will bring immediate and tangible effect and do it. Think about eating an elephant. In six months Have your strategic plan for BI improvement ready. Be prepared for next steps. Evaluate your initiatives, communicate success, use the benefits for justifying next projects. Get more people on board. Start next round of projects – both growing the top line and supporting information workers. 16
  17. 17. David Slánský KPMG Česká republika, s.r.o. +420 222 124 249 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Informace zde obsažené jsou obecného charakteru a nejsou určeny k řešení situace konkrétní osoby či subjektu. Ačkoliv se snažíme zajistit, aby poskytované informace byly přesné a aktuální, nelze zaručit, že budou odpovídat skutečnosti k datu, ke kterému jsou doručeny, či že budou platné i v budoucnosti. Bez důkladného prošetření konkrétní situace a řádné odborné konzultace by neměla na základě těchto informací být činěna žádná opatření. © 2009 KPMG Česká republika, s.r.o., the Czech member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Czech Republic. 17 .