The document discusses setting the stage for business intelligence (BI) success through defining requirements and roadmaps. It provides an agenda for a seminar on BI opportunities, requirements, and pitfalls in gathering requirements. The overview defines BI, business analytics, and business performance management and how they are mutually reinforcing. It discusses how BI can impact various business functions like operations, finance, sales and marketing. It stresses that BI requirements should focus on key business questions, decisions and processes rather than technical specifications. Active business engagement is key to BI success.

1. BI Requirements & Roadmaps
Setting the Stage for BI Success
IMA Carolina Council Winter Conference
Columbia, South Carolina
February 17, 2012

2. Your Instructor
Steve Williams works with leading companies in the food/CPG, financial
services, manufacturing, and energy industries to develop business
intelligence, analytics, and performance management strategies, program
plans, and designs. These engagements have focused on deploying
performance management and analytics applications for enterprise
management, financial management, supply chain & operations, sales &
marketing, and customer service.
Steve is president of DecisionPath Consulting and is the co-author of The
Profit Impact of Business Intelligence. He holds an MBA from the University
of Virginia and has published numerous articles, including “Power
Combination: Business Intelligence and the Balanced Scorecard” - the
cover article in the May 2008 issue of Strategic Finance magazine. Steve can
be reached at steve.williams@decisionpath.com.
“We have used the strategies in The Profit Impact of Business
Intelligence to align our BI program with our critical success factors
and to drive our BI development efforts."
--Terry Lillis, CFO - The Principal Financial Group
"This book is a must for business leaders who require that their BI
programs drive real business value."
--Barbara Wixom, Ph.D., Associate Professor and Director of MS-
MIT, University of Virginia McIntire School of Business
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3. Seminar Agenda
• Overview - business intelligence, business analytics,
and business performance management
• BI opportunities and BI requirements
• Pitfalls in gathering BI requirements
• Business engagement - the key to BI success
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4. Overview
Business Analytics, Business Intelligence,
and Business Performance Management

5. Overview: Definitions
Business Performance Management
(BPM) is a systematic management
process for planning and budgeting
enterprise performance, measuring
performance against financial and
operational targets, and taking
corrective actions
What Happened?
Business Intelligence (BI) is a
systematic approach to delivering and
leveraging business information and
analytical tools to improve performance
Business Analytics (Analytics) is a term
used to describe the use of long-
established statistical and operations Why Did It Happen?
research methods to understand what
happened, why it happened, what’s
likely to happen in the future, and what What Might
the impact of that could be. Happen Next?
What’s the
Impact?
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6. Overview: BI Definition
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7. Overview: Key BI Design Questions
• What business information do we need?
• For what business analyses?
• In support of which key business decisions?
• That impact which core business processes?
• To deliver how much business value?
• Via what changes to people, processes, and
technology?
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8. Overview: BI Value Propositions
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9. Overview: BI, BPM, and Analytics
Key Concept: BI, BPM, and Analytics are mutually reinforcing
with same goal - improved performance and profitability.
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10. Overview: BI, BPM, & Analytics
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11. Overview: BI Impact
Examples For Top Executives:
• Enhanced control over strategic performance
KPI trends over time
Business unit performance
• Enhanced short interval control
Scorecards and dashboards
“Flash Reports”
Alerts
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12. Overview: BI Impact
Examples For CFOs & Financial Managers:
• Precise, granular understanding of links between
operational performance and financial results
• Better tools for performance management - readily
available scorecards and dashboards
• Better data for planning, forecasting, and budgeting
• Better tools for performance assessment, variance
analysis, and root cause analysis
• Better tools for optimizing working capital
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13. Overview: BI Impact
Examples For COOs & Operations Managers:
• Precise, granular understanding of links between
operational performance and financial results
• Better tools for cost analysis/control
• Better tools for operations management - readily
available scorecards and dashboards
• Better tools for monitoring and improving key
performance drivers, e.g. customer service, product
quality, supplier performance, etc.
• Better data for demand planning/forecasting,
inventory optimization, and capacity planning
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14. Overview: BI Impact
Examples For CMOs, Sales Managers & Marketers:
• Complete information about customers for improved
segmentation, more precise campaign targeting, and
enhanced customer retention techniques
• Better tools for campaign lift/ROI analysis
• Improved ability to determine customer lifetime
value and use differentiated customer service
treatments and channels
• Improved tools for determining price elasticity of
demand to support pricing strategies
• Improved tools for category management
• Enhanced revenue capture management via more
timely and granular performance scorecards
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15. Overview: BI Impact
Examples of leveraging BI
• $7.4 billion discount retailer leveraged analytics to
improve/optimize replenishment, assortment planning, and
pricing
• $15.6 billion electronics distributor leveraged analytics to
optimize inventory levels and improve customer service
• $8.9 billion financial services company leveraged analytics for
financial performance management and optimizing business
unit expenses
• $3.5 billion semiconductor manufacturer leveraged analytics
for improving yields, customer service, and pricing
• $1.7 billion financial services company leveraged analytics to
improve order management and operations performance
• Electric utility serving 675,000 customers leveraged analytics to
improve its enterprise performance management process
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16. Overview: BI Impact
Key Concept: BI impacts financial performance
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17. Overview: BI Impact
Key Concept: BI impacts operational performance
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18. BI Opportunities & Requirements
The Key to a Strong Tactical BI Foundation
and Effective Information Model

19. BI Opportunity Analysis
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20. BI Opportunity Analysis
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21. BI Opportunity Analysis
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22. BI Opportunity Portfolio
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23. BI Requirements
2. Revenue Management Analytics. Company professionals reported that
timely, granular information about revenues, shipments, volume, prices,
consumption, share, margin, inventory, and net sales is essential for enterprise
demand planning, brand planning, customer service, category analysis, pricing,
budgeting, financial analysis, managing revenue attainment, variance analysis,
customer marketing, business development, and field sales purposes. This
BIO would integrate and deliver the required business information to support all
these uses and users, with an emphasis on enabling Pinnacle to drive revenue
growth and effectively manage revenue attainment on a customer-by-customer
basis across all channels of distribution.
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24. BI Requirements
BQ ID Business Question
81 What are gross sales and net sales in units, dollars, and declared weight by item by customer by sales organization by time? Compare actual sales to budget,
forecast, and actuals for the previous X years
82 List the top N customers based on gross revenue, net revenue, gross margin dollars, and gross margin % by time. Provide a Pareto analysis of customers based on
these same four metrics. How do the “top N customers” lists for this year compare to those of previous years?
83 How does salesperson and broker performance (measured by revenue, gross margin, or however the company chooses) compare to plan/quota, by time?
84 How does customer performance (measured by revenue, gross margin, or however the company chooses) compare to the account plan, by time?
85 List the top N items based on gross unit sales, net unit sales, gross revenue, net revenue, gross margin dollars, and gross margin % by time. Provide a Pareto
analysis of items based on these same four metrics. How do the “top N items” lists for this year compare to those of previous years?
86 How many of the “top N items” are “new” items, and how much (and what % of total) gross unit sales, net unit sales, gross revenue, net revenue, and gross
margin dollars did they contribute, by time?
87 What are returns/unsaleables by item by customer by reason/cause by time?
88 What are the top N most returned/unsaleable items, based on units, dollars, % of units sold, and % of dollars, by customer by time? Provide a Pareto analysis on
returns by item for these same metrics.
89 (Who are our most rapidly growing customers?) What is the year-over-year sales change, expressed in gross revenue, net revenue, and gross margin, by customer
(sorted in descending order)?
90 What distribution (number of customers who carry the item) do we have for each item, and how has it changed over time?
91 Who (which customers) is the distribution we have for each item, and how has that changed over time?
92 What is the penetration rate for “new” items, by item by sales organization by time? (Penetration rate = number of customer who agreed to carry the item /
number of customers to whom we presented the item)
93 What is the penetration rate for “new” items, by item by sales organization by time? (Penetration rate = number of customer who agreed to carry the item /
number of customers to whom we presented the item)
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25. BI Requirements
Product: Brand Segment
Sales Organization:
Date: Year-to-Date
Product: Operating
Sales Organization
Customer: New
Customer Store
Product: Brand
IRI Customer
Product: Item
Demand Plan
Date: Month
Date: W eek
Salesperson
Date: Year
Date: Day
Customer
Segment
Channel
Product
Order
Date
High-Level Fact
Cost of Goods Sold (COGS) 2 20 10
Customer Profitability 1 5 1 2
Customer Returns $ 2 2 4 4 2 4 2 2
Customer Returns Quantity 3 3 6 6 3 6 4 3
Customer Store Population 4 8 4 8 16 4 8
Distribution at Retail 3 8 16 24 8 16 3 8 3
Distribution Cost 3 30 15
EBITDA 2 20 10
Gross Margin 7 4 19 40 65 19 38 10 3 7 4 2
Gross Revenue 1 1 1 1 1 1
Gross Sales 18 2 25 51 64 25 50 5 2 21 17
Inventory Turns 1 10 5
Inventory Value 1 10 5
Net Sales 18 2 25 52 74 25 50 10 2 21 17
Price per Unit 6 6 12 24 6 12 6
Product Profitability 1 2 1
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26. BI Requirements
Key Concept: BI come in a variety of shapes and sizes.
• Reports - identify and analyze what happened in financial and/or operational
terms
• Scorecards and dashboards - identify and analyze what happened by
comparing to a target, acceptable range, benchmark, or other suitable
performance expectation
• Multi-dimensional analysis (drill-down, drill across, slice & dice) - analyze why
something happened by looking at contributions of specific subsets of the
who, e.g. products, customers, channels, or business units
• Variance and root cause analysis - identify favorable and unfavorable variances
and use multi-dimensional analysis to determine where to begin root cause
analysis
• Predictive analytics - project what will happen by using past performance
information in conjunction with other management information and business
judgment (examples: forecasting, customer lifetime value, credit scoring)
• Advanced analytics - e.g. use collaborative filtering and conjoint analysis to
group customers and/or potential customers for marketing, sales, and product
development purposes (example: Amazon and I-tunes recommendations)
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27. Overview: BI Design Challenge
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28. Pitfalls in Gathering BI Requirements

29. Business Requirements for BI are NOT
• Functional Requirements
• System Requirements
• Interface Requirements
• Integration Requirements
• Software Requirements
• Database Requirements
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30. Business Requirements for BI are NOT
• BI or ETL Tool Requirements
• Report Layouts
• Lists of Data Elements
• Requests for Ad Hoc Access to Business
Information
It’s not about “Paving the Cowpath”
(i.e. accessing the same old information using BI tools)
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31. Business Engagement
The Key to BI Success

32. Five Strategic Barriers
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