Business Intelligence Readiness 3 rd - 4 th Meeting Course Name: Business Intelligence Year: 2009

Bina Nusantara University 3 Source of this Material (1). Williams, Steve & Williams, Nancy (2007). The Profit Impact of Business Intelligence. Chapter 3

Bina Nusantara University 4 BI Readiness Overview Using BI opportunity analysis and the BI opportunity map fundamentally changes the front end analysis for BI and DW by adding rigor to determination of how the BI investment or investment are going increase company’s profit. Figure 3-1 shows the factors correlated with an organization’s ability to leverage BI to improve business performance and deliver business value. BI readiness assessment can thus be seen as a BI risk analysis tool and as an implementation tool that, with a modest investment of effort, can greatly enhance the probability of a strong payoff for a BI investment. Figure 3-1

Bina Nusantara University 5 BI Readiness, Business Risk, and Traditional Development Methods BI Readiness assessment is a tool designed to help overcome the limitations of traditional development methods. Business risk associated with BI investments is important. Traditional development approaches, which make the leap of faith that the combination of sponsor support, subject matter expert involvement and sound technical and management methods. Manufacturing Company Example Company A is a manufacturer of consumer and industrial products. Its consumer product group had deployed a data mart with an online analytical processing (OLAP) application used for managing revenue an profit. Its industrial products group determined that a similar BI application would allow it to do a better job o managing revenue and profits. The group used a traditional development method to design, develop, and deploy the BI application. Although the BI application was ultimately successful, there were several bumps in the road that the company could have avoided via a comprehensive BI readiness assessment.

Bina Nusantara University 6 BI Readiness, Business Risk, and Traditional Development Methods (cont..)  Continuous Process Improvement  The Culture Around Use of Information and Analytical Applications  The Culture Around Decision Making  The Business/IT Partnership Was Less than Ideal Disability Insurance Company Example Company B needs to optimize claims processing productivity and improve service delivery. The company has embarked on a BI program aimed at providing all levels of operations management with more timely and relevant business information. It has funded a major project to ensure that it captures the business value of its investments in BI. In terms of BI readiness,  The Company Funded a Comprehensive Project to Ensure Strategic Alignment  The Company has a Record of Continuous Process Improvement  The Company Recognizes that it Will Have to Change The Culture  The Company Formally Assessed its BI and DW Technical Readiness  The Company Employs Effective IT Governance Mechanism that Promote an Effective Business/IT partnership.

Strategic Alignment Consistency among business strategy, business organization and processes, IT Strategy, IT Infrastructure, and IT Organization and processes. Continuous Process Improvement Culture Organizations that have created successful process improvement cultures are adept at changing business processes, which prepares them to leverage BI effectively within processes that have an economic impact. Culture Around the Use of Information and Analytical Applications Organizations that embrace the use of information and analytical application to improve profits are better able to leverage investment in BI than are organizations that do not embrace and reward such approaches to creating business value. Business Intelligence Portfolio Management BI applications can improve the performance of the units within a given company, including some applications that help drive revenue growth and others that help reduce costs and optimized profits. Bina Nusantara University 7 BI Readiness Factors

Bina Nusantara University 8 BI Readiness Factors (cont…) Figure 3-2

Bina Nusantara University 9 BI Readiness Factors (cont…) Decision Process Engineering Culture Structured decision processes can incorporate the use of information, analytical applications, and/or quantitative methods as appropriate for type of decision to be made. Business Intelligence and Data Warehousing Technical Readiness By indentifying technical risks up front, you can devise and execute appropriate plans to mitigate them. Accordingly, an effective BI readiness assessment should assess BI and DW technical readiness. Effective Business/Information Technology Partnership for BI Organizations that have been effective in using IT to improve business results are more able to leverage BI to create value than are those whose practices do not create effective business/IT partnerships.

BYTECO is a multi-billion-dollar global manufacturer and marketer of semiconductor devices. Its products are key components used in a broad array of electronic application, including personal computers, workstations, network servers, mobile phones, flash memory cards, USB storage devices, digital still cameras, MP3 players, and other consumer electronics product. BYTECO sells its products into computing, consumer, networking, telecommunications, and imaging markets. Approximately 45% of its net sales for 2005 were to the computing markets, including desktop personal computers, notebooks, servers, and workstations. The company markets its products primarily through its own direct sales force and it maintains inventory at locations in close proximity to certain key customers to facilitate rapid delivery of product shipments. Bina Nusantara University 10 Case Study: BYTECO BI Readiness Assessment

Bina Nusantara University 11 The BI Readiness Assessment (BYTECO) Figure 3-3 A BI readiness assessment can be a good way to educate senior-level business management about the critical success factors needed for BI success and to obtain their support for the changes that are needed to improve the odds of success. The BI readiness assessment survey that use contains 100 questions grouped and scored across the seven BI readiness factors. Assessment participants are asked to respond to various statements on a scare from 1 to 5, where 5 means “strongly agree,” 3 means “neutral,” and 1 means “strongly disagree.” Figure 3-3 shown the results of BYTECO assessment.

The results at BYTECO indicated that there were BI readiness challenges across the board. With a few slight exceptions, all groups were neutral to slightly negative in their assessments of BYTECO’s BI readiness on the seven BI readiness factors. In general, respondents felt that BYTECO was the least ready in the areas of partnership between business and IT, BI and DW technical readiness, and managing BI as a portfolio. Based on the results of the BI readiness assessment and other supporting analyses, BYTECO developed a comprehensive program plan to move its BI initiatives forward and manage its risks. Specially, BYTECO addressed strategic alignment by elevating the importance of BI within BYTECO and by changing from small, report focused projects to looking at BI as a multi- year program, or BI portfolio. Bina Nusantara University 12 The BI Readiness Assessment BYTECO (cont…)

End of Slide Bina Nusantara University 13 “…Successful organizations can be distinguished by their ability to leverage IT capabilities to transform their business (structures, processes, and roles) to obtain powerful sources of competitive advantage in the marketplace.’” -John Henderson and N. Venkatraman, Center for Information Systems Research, Sloan School of Management, Massachusetts Institute of Technology, November 1990.