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Whitepaper-Business Intelligence- empowering business

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Business intelligence initiatives are too often IT oriented.
These initiatives started with all good intentions but somewhere down the road, business focus is lost and technology pushes the initiative forward. This paper givves an introduction of Business Intelligence from a business perspective. http://www.logica.com/

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Whitepaper-Business Intelligence- empowering business

  1. 1. White Paper Business Intelligence Empowering Business
  2. 2. Logica is a leading IT and business services company, employing 39,000 people across 36 countries. It provides business consulting, systems integration, and IT and business process outsourcing services. Logica works closely with its customers to release their potential – enabling change that increases their efficiency, accelerates growth and manages risk. It applies its deep industry knowledge, technical excellence and global delivery expertise to help its customers build leadership positions in their markets. Logica is listed on both the London Stock Exchange and Euronext (Amsterdam) (LSE: LOG; Euronext: LOG). More information is available at www.logica.com. Copyright statement: This document contains information which is confidential and of value to Logica. It may be used only for the agreed purpose for which it has been provided. Logica’s prior written consent is required before any part is reproduced. Except where indicated otherwise, all names, trade marks, and service marks referred to in this document are the property of a company in the Logica group or its licensors.
  3. 3. Business Intelligence Empowering Business 2 Contents Introduction 3 Definition of Business Intelligence 4 BI Business Drivers 5 Business Intelligence Foundation 7 Business Intelligence Development 9 BI Organization 11 BI Maturity Model 13 Wrap up 15
  4. 4. Business Intelligence Empowering Business 3 Introduction This paper gives an introduction of Business Intelligence from a business perspective. Too often we find Business Intelligence initiatives at customer sites that are very much IT oriented. These initiatives started with all good intentions and for very good reasons. Somewhere down the road however, business focus is lost and technology pushes the initiative forward. With this paper we give you some guidelines to keep your Business Intelligence initiative business driven and be more successful in utilizing Business Intelligence to improve your Business. We start with a clear definition of what Business Intelligence is about and why Business Intelligence is important to you. Then we go in to more detail on the necessary foundations for a successful Business Intelligence program, our business oriented development methodology and the important organizational aspects of Business Intelligence. Based on these BI basics we explain the BI maturity model which supports you in assessing the current maturity of your BI imitative and supports you in achieving the next required level of maturity. We wrap up with a summary of our services to support your Business Intelligence initiative.
  5. 5. Business Intelligence Empowering Business 4 Definition of Business Intelligence The strength of a good Business Intelligence solution is delivering the right information at the right time and place to the right person. The value of the delivered information is measured by the improvement of your business decisions, by having the information available to you. A more formal definition is: Delivering and managing information for monitoring and management of an Definition of BI organization and business processes. Key components in this information delivery process are: • Using structured data from multiple sources. • Transformation from transactional data tot management information. • Creating a historical view. The IT marketplace has acknowledged the value of Business Intelligence for your organization for some time now. Many products, services and solutions are offered to you. Nearly all of them claim to have the tailor-made solution to support your specific business issues. In our opinion these are all valuable products and propositions, but only when utilized for the right reasons and as part of a business driven methodology. In general Business Intelligence supports you in reporting, analyzing and BI Functions modelling your business aligned with the strategic objectives of your organization. Reporting capabilities enable you to measure the past and current performance. Analyzing capabilities enable you to analyze past and current performance to improve your business on a tactical level. Modelling capabilities enable you to act on a strategic level on the results of analysis by re-modelling your business processes. If you can’t measure it, you can’t manage it (Added value of BI according to the CEO General Electrics)
  6. 6. Business Intelligence Empowering Business 5 “Best Product” Product Leadership BI Business Drivers Business Strategy Operational Customer Excellence Intimacy “Best Total Cost” “Best Service” Your business case for Business Intelligence should always somehow be related to the business strategy and business objectives of your organization. To get an understanding of the business strategy of an organization we use the value Value Disciplines discipline model of Treacy and Wiersema. In this model three different strategies Treacy & Wiersema for an organization are identified: 1. Operational Excellence. Superb operations and execution. Often by providing a reasonable quality at a very low price. Task-oriented vision towards personnel. The focus is on efficiency, streamlined operations, Supply Chain Management, no-frills. Volume is important. Most large international corporations are operating out of this discipline. Measuring systems are very important. Extremely limited variation in product assortment. 2. Product Leadership. Very strong in innovation and brand marketing. Company operates in dynamic markets. The focus is on development, innovation, design, time to market, high margins in a short time frame. Flexible company cultures. 3. Customer Intimacy. Company excels in customer attention and customer service. Tailors its products and services to individual or almost individual customers. Large variation in product assortment. Focus is on: CRM, deliver products and services on time and above customer expectations, lifetime value concepts, reliability, being close to the customer. Give decision authority to employees that are close to the customer.
  7. 7. Business Intelligence Empowering Business 6 Analyzing your business strategy based on the value discipline model enables you to identify the areas where the organization will gain the most value from Business Intelligence. This supports you in focusing your BI initiative. Usually an organization will need to excel on one of the defined value disciplines to be successful. However the other two cannot be neglected of course, but should score at least on average. In large organizations often separate divisions or business units own one of the defined value disciplines. One additional important business driver for Business Intelligence is corporate Risk & Compliance governance. Organization are more and more confronted with obligations to inform regulators, share-holders and the public of their performance. Organizations, and sometimes high level management themselves, are held accountable for their performance and must comply to several regulations and legislations. Some examples of current legislations and regulations that companies are confronted with, are Basel II, Solvency II, Sarbanes Oxley (SOX) and MIFID. Business Intelligence supports your organization in achieving the right information flow from your operational business processes to comply with regulatory reporting requirements.
  8. 8. Business Intelligence Empowering Business 7 Business Intelligence Foundation Regardless of the specific business case, there are two factors that in almost any Critical Success BI initiative are critical for success. The first is consistency of information. The Factors for BI second is traceability. A BI solution usually brings together data from different source systems and passes multiple levels of enrichment and aggregation. The figure below shows this schematically. CXO Traceability and Audit ability Reporting Dimensions Service Finance Operations Marketing HR Centers Source Systems Consistency Integration of information from multiple sources often reveals inconsistencies. Consistent, Traceable When enriching and aggregating information to support the different control levels & Auditable Information within an organization also traceability of information becomes a serious challenge. The degree in which the developed BI solution resolves these issues is key to the success of the overall BI initiative. Key in achieving accountable, consistent and traceable information in a Business Intelligence solution is the presence of data management processes in your organization. Business data definitions, data quality measurements, data ownership and data governance processes should already be part of any organization. In many cases the first iterations of a Business Intelligence initiative still fail due to lack of these capabilities in an organization.
  9. 9. Business Intelligence Empowering Business 8 To support organizations in getting the foundations for a successful Business Enterprise Information Intelligence initiative right, we formed a Enterprise Information Management Management Practice hosting and developing extensive knowledge and experience in data, information and content management. We use the following basic model for Enterprise Information Management. Foundation for Business Intelligence Data Data Business Business Management Integration Intelligence Drivers Operational Excellence Data Data Ware Business Modeling Housing Reporting Enterprise Corporate Data & Governance Data Data Business Content Quality Migration Analytics Customer Intimacy Data Content Business Governance Management Modeling Product Leadership Process your data Measure and Understand and Use actionable to actionable improve your value your data Inf ormation to… information Business In the model you will find all data, information and content related subjects placed in relation to each other. Some important characteristics of the model are: - Business Intelligence is not only based on the information out off Data & Content traditional databases, but more and more incorporates other valuable Management content in your organization. We therefore integrated content management in the model. - Data Management is a very important and often under estimated phase in achieving a good Business Intelligence solution. Data Management includes definition of your data (Data Modelling), classification and valuing your data (Data Quality), manage your data and content as an asset (Data Governance). Before starting a Business Intelligence development process we suggest you start with an assessment of your Business Intelligence foundation first, based on the model we provide.
  10. 10. Business Intelligence Empowering Business 9 Business Intelligence Development Any Business Intelligence development methodology should take into account at least the following very important aspects: • Business Intelligence development should be business driven at all times. Alignment between business and IT is crucial and should be established at the early beginning of the program and managed continuously during the whole program. • Business Intelligence development is a continuous improvement process. Architecture and infrastructure should be selected and implemented with the future in mind. Development on the other hand must be carried out in short iterations delivering business value rapidly. A BI life cycle management process is required to support continuous improvement. With our Business Intelligence Framework we have a proven methodology Business Intelligence available for you. This framework is used by Logica in many Business Intelligence Framework projects and is also adopted by several of our existing customers as their own BI development methodology. In BI Framework the development of Business Intelligence is divided in four quadrants, linked together via BI Life Cycle Management.
  11. 11. Business Intelligence Empowering Business 10 Below a short description of the four phases in the Business Intelligence development process: • BI Business Plan Definition or adjustment of the BI strategy based on business drivers and strategic goals of your organization. The BI strategy is based not only on the business needs, but also on the results of a feasibility study to manage business expectations. • BI Program Plan The BI Program plan defines or adjusts the roadmap for your BI initiative. Based on the result of the previous phase a business information analysis is conducted to gather and prioritize business requirements. The BI architecture and infrastructure will be designed or adjusted in this phase.The architecture definition defines an appropriate architecture and infrastructure. • BI Increments Incremental design and development of the Data Integration processes and the Data Warehouse model. Iterative design and development of reporting and analytical applications. • BI Exploitation Ensuring availability, continuity and stability of the BI solution. Monitoring data delivery by implementing Data Resource Management. Support business users by implementing Information Delivery Management. The majority of activities in the upper two quadrants, BI Business Plan and BI Business & IT Program plan, are the responsibility of the Business side of your organization and Alignment should therefore be driven by the Business. The majority of activities in the lower two quadrants, BI Increments en BI Exploitation, need strong commitment and involvement from your IT organization. Change & Service The right-side quadrants, BI Program Plan and BI Increments, are change-driven Alignment and should be managed as a program or project. The left-side quadrants, BI Business Plan and BI Exploitation, should be implemented as part of your day-to- day operation of Business Intelligence. More information on our Business Intelligence Framework is available in our recent publication “Business Intelligence Framework, ISBN/EAN 978-90- 9021764-2”.
  12. 12. Business Intelligence Empowering Business 11 BI Organization The exploitation of BI solutions is not fundamentally different, process-wise, from the exploitation of other IT systems. Specific in the exploitation of a Business Intelligence solutions however is the number of dependencies to manage. As mentioned before a Business Intelligence solution usually integrates information from multiple sources. Management of these interfaces is critical in order to sustain the required level of information quality. Also specific for BI is the frequent interaction with the information users in supporting and optimization of their reporting and analytic applications. A Business Intelligence Competence Centre should therefore have at least incorporate three functions, being Information Delivery Management, Data Resource Management and Operations/Maintenance. Business Intelligence Data Resource Management Information Delivery Management • Data modelling and • Developing reporting and Competence Centre management. analytical applications. • Data Integration process • Supporting Business Users modelling and management • Information brokership • Data stewardship BI • Account management • Monitoring of Data Quality Competence Center Operation & Maintenance • Infrastructure providing • Tooling providing • System Integration
  13. 13. Business Intelligence Empowering Business 12 Below a short definition of the three required functions in the exploitation of a Business Intelligence solution is given. - Information Delivery Management Within the Information Delivery Management function, functional and business knowledge is available to develop information products for the organization. Client contact with end-users from various parts business is maintained. End-users are supported in the use of their reporting and analytical applications and in defining business requirements for new development. - Data Resource Management Within the Data Resource Management function, technical and functional knowledge and experience is available to perform the translations for source data into the central information model. Data delivery is evaluated on quality and timeliness. - Operations and maintenance Within the Operations and maintenance function, daily operations of the BI solution are supported. This consists of the continuous monitoring of the aspects of continuity, stability and availability of the BI environment. BICC Business Driven From the description of the functions we can also determine that a Business Intelligence Competence Centre is preferable not an IT department only. In a BICC you have to bring together knowledge workers, data specialists and IT staff.
  14. 14. Business Intelligence Empowering Business 13 BI Maturity Model The diagram below illustrates evolution through many stages of BI maturity, from infancy (traditional management reporting and spreadsheets) to adulthood (enterprise data warehousing and analytic services). This model provides useful context to BI maturity assessments in your organization because it aligns closely with many of the BI success factors. Prenatal Infant Child Teenager Adult Sage Executive Cost Inform Empower Monitor Drive the Drive the BI Maturity Model Perception Center Executives Workers Processes Business Market Information IT Self Customized The BI Culture Backlog Service Delivery Utility Analytics Under- Actionable Decision Awareness standing Information Automation Culture Adoption Curve Cost Value Enterprise Architecture Management Data Data Analytical Reporting Spreadmart Data Marts Warehouses Warehousing Services Adapted from the BI Maturity Model, Wayne Eckerson, TDWI Director of Research The important aspects to consider when assessing the BI maturity of your organization are: - Executive Perception How does your executive management perceive Business Intelligence. Is BI just another cost center in your organization or does BI drive your business or even the market in which your organization operates. - Information Culture How is Business Intelligence used within your organization. Are decision makers always waiting for reports to be delivered by IT or is the right information delivered to right person, on the right time and place.
  15. 15. Business Intelligence Empowering Business 14 - Analytics Culture How well is Business Intelligence adopted by the knowledge workers in your organization. Are they aware of the existence of Business Intelligence or is it part of their day-to-day decision preparation processes. - Cost and Value (ROI) Does your investment in Business Intelligence pay-off. Very important in answering this question is to also include the time knowledge workers spend on analyzing the information delivered by BI. Is this time spend on improving business with the received information or is this time spend on checking consistency and quality of the delivered data, - Architecture Is Business Intelligence supported with a traditional management reporting platform and spreadmarts or is an Enterprise Data Warehouse with Analytical Services available. This Maturity model enables you to measure the current maturity of Business Intelligence of your organization. In the outcome often a unbalance occurs on the different aspects of maturity. It is very important to start balancing all the aspects to one level of maturity first and then start growing to the next level of maturity.
  16. 16. Business Intelligence Empowering Business 15 Wrap up In this paper we have given you an introduction of our vision on Business Intelligence. Of course we can offer you our experienced consultants to support your Business Intelligence initiative. We also used our capabilities and knowledge to develop standardized service packages for our customers. Some examples are: • BI Framework methodology Our knowledge and experience of many years has now been combined in a practical framework. Our BI Framework is a guideline in the complex world of Business Intelligence to make the right choices and trade-offs between the many possibilities offered by the market. • BI Review Packages With our Business Intelligence review package we enable our customers to measure the performance on Business Intelligence initiatives within their organization. Based on your particular needs we can select the most relevant parts of this review package and apply them on your BI initiative. Information requests This paper is a product of the Enterprise Information Management Practice of Logica. If you require more information about our capabilities to support you please contact us. Henk van Roekel Theo Meinsma Principal Consultant Associate Director T: +31 020 503 3164 T: +31 070 375 6711 E: henk.van.roekel@logica.com E: theo.meinsma@logica.com About the author This paper is written by our Principal Consultant of Enterprise Information Management, Henk van Roekel. Henk performs high level consultancy for our customers to support their Business Intelligence, Data Integration and Data Management initiatives. Henk is a Certified Business Intelligence Professional (mastery level) accredited by The Data Warehouse Institute (TDWI) and a teacher of Business Intelligence courses at DNV-CIBIT.
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