1. The BI(g) Discrepancy: Too Much Technology and Not Enough Intelligence
James Richardson
The Future of IT
September 1-3, 2009
Centro Banamex
Mexico City, Mexico
Rita Sallam
Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via Gartner is a registered trademark of Gartner, Inc. or its affiliates.
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2009 Gartner, Inc. and/or its affiliates. All rights reserved.

2. BI Defined: Information Driving Organizational Performance
Business intelligence is an umbrella term for
Applications
Infrastructure, platforms, tools
Best practices
which enable the analysis of information in order to optimize decisions and manage performance.
Performance
Decisions
Analysis
Information
Key Issue: What is business intelligence?
BI is not a particular technology or product, and it's not just about "insights" or a "single version of the truth." It's an umbrella term that defines a broad range of applications, technologies and methodologies that support a user's access to and analysis of information for making decisions and managing performance. Thus, for BI to be viewed as being a success, that information and analysis must be actionable and auditable, and the associated decisions must have an impact on performance, in line with the objectives and plans for the organization.

3. Key Issues 1. What is the BI(g) discrepancy?
2. How are organizations getting value from BI?
3. What are the fatal flaws to avoid?

4. Credit Crunch Squeezed the Real Economy
Loan restrictions & rate hikes
Operating
capital
squeeze
Must slash costs & pressure
suppliers
U.S.
home loan
crisis
Global interbank
trust loss
Tax Revenue
softening
Consumer
credit restrictions
“Executive spending cuts of £370m are needed in the coming year the NI finance minister Sammy Wilson has said.”
Source: BBC NI, 29 Sept 2009

5. BI Should Be Playing a Key Role
Improving transparency
Enabling fact-based decision making
Understanding what and why we should cut
Identifying opportunities for growth, or at least which parts of the organization to protect
But…

10. Does this Look Familiar?
The above picture of the urban sprawl surrounding Marrakech is meant as an analogy of the departmental BI Projects often based on bottom up requirements gathering. The see of buildings is meant to represent the hundreds or thousands of reports and other sources of analytic information scattered throughout a large company that have been built without a common architecture or governance strategy.

11. Architecture is not a Strategy slide

12. Architecture is not a Strategy slide

13. Key Issues 1. What is the BI(g) discrepancy?
2. How are organizations getting value from BI?
3. What are the fatal flaws to avoid?

14. Survey: Top Drivers of BI Investments
Key Issue: How are organizations realizing business value?
Operational Efficiency
Strategic Business Transformation
45%: To respond to needs for data on a timely basis
48%:
To better align with and track against corporate strategy and objectives
Information
28%:
To move users toward a self-service model of information delivery
21%:
To increase the organization's revenue
Value to CIO/IT
71%:
To speed up and improve decision-making ability
Technology
45%:
To decrease costs of supporting decisions
Lower TCO
Higher Business Agility and Scale
There are different ways of measuring business value of BI and information management (IM) investments. The business value definition depends on whether it is being evaluated by IT or business organizations. To business organizations, information and technology are contributors to delivering business value. They are necessary but not the end measure of value. The measure of BI and IM value is stated in business terms, such as contributing to agility, efficiency and scale, or the level of business transformation enabled. The four ways that organizations realize value from BI investments include: Operational efficiency — More-effective support and use of information. More-relevant, accurate, consistent, and timely information. Strategic transformation — Use information to transform enterprise performance. Lower total cost of ownership (TCO) — More-efficient use of technology. Remove technical and operational obstacles and redundancies. Higher agility and scale — Embedded into products, services and operations. These four aspirations map well with the drivers shown in Gartner's survey of 2009's top drivers for BI buying: Speed up and improve organizational decision making — This driver ranks No. 1 consistently across all geographies and industries. However, decisions are qualitative, so measuring decision making before and after projects to determine their success is difficult. Consequently, companies have struggled to build business cases around this driver alone, and the benefits that can be demonstrated from such projects do not often support further investment. Align and track against corporate strategy and objectives — The survey results show that BI leaders citing this as a driver increased from 43% in 2007 to 48% in This increase possibly reflects pressure to more tightly focus business operations in tougher economic conditions. In addition, most companies have BI infrastructure and are now building out the applications and methodologies (such as corporate performance management [PM] and scorecarding) to align with strategy. Users need timely data — This driver will remain key because of escalating demands from regulators, financiers, markets and customers for increased timeliness, accuracy and granularity of data; internal pressure to respond to rapidly changing markets and competitive conditions; and a desire to derive more value from the company's information assets. Decrease business costs and increase operational efficiency — The slowdown in the U.S., rising costs for materials and other economic challenges lifted the responses from 28% in 2007 to 33% in Leaders in BI can establish clear and financially quantifiable benefits and returns from BI initiatives in this area. Move users to a self-service model — Although this driver fell from 35% in 2007 to 28% in 2008, BI leaders should seek opportunities for user self-service where possible. Limited IT resources remain a bottleneck to meeting user demands for information. User self-service can help provide more-pervasive and effective BI. Increase the organization's revenue — Organizations with mature BI programs tend to focus in this area (whereas support for decision making requires more-basic BI proficiency). BI initiatives to grow revenue do provide a clear, quantifiable return on investment.
Enabling
Contributing
Source: "Survey of BI Purchase Drivers Shows Need for New Approach to BI," G
Value to Business

15. Case Studies: Realizing BI Business Value
Operational Efficiency
Strategic Business Transformation
Cummins¹
WellPoint²
Continental Airlines¹
Best Buy²
Information
Absa Bank¹
City of Richmond¹
AstraZeneca¹
Value to CIO/IT
Chicago Mercantile Exchange¹
Pfizer¹
UniCredit¹
Euro Disney¹
Technology
Lower TCO
Higher Business Agility and Scale
Key Issue: How are organizations realizing business value?
Here are some showcase examples of organizations that highlight business value with their business intelligence and information management (BIIM) leadership and initiatives. These organizations have been finalists in the BI Excellence Awards or have been noted in the BusinessWeek Top 50 Performers.
The top three finalists of the BI Excellence Awards are selected by Gartner analysts. They get the opportunity to present their solutions on stage at a Gartner BI summit. Based on the substance of the presentations, the typically more than 1,000 attendees vote for a winner.
The winners exhibit varying matches to the drivers outlined:
• Numerous disparate spreadsheets and information sources meant that AstraZeneca had to find a better solution to support more timely and accurate business decisions. The results of its BI and PM management initiative, Enterprise Performance Visibility, won Gartner's award.
• Continental Airlines consolidated several customer databases into a single, strategic data warehouse and BI initiative that helped it become first in its industry for customer service. Its example demonstrates how companies can achieve competitive advantage.
• UniCredit took a leading role in a new credit portfolio management market, thanks to a BI solution. This included an integrated data warehouse, risk modeling, rule-based warnings and an interactive reporting portal.
• The Richmond Police Department in Virginia deployed a variety of analytical and predictive tools to determine likely areas of criminal activity so that officers could be proactively deployed to deter crime, rather than reactively respond to criminal activity.
Enabling
Contributing
Value to Business
¹Gartner BI Excellence Award Finalists
²BusinessWeek Top 50 Performers and company SEC filings

16. Optimizing Business Value: Integration and Alignment of Value Chain 'Cornerstones'
Key Issue: What are the cornerstones of optimizing business value?
Business Strategy
Value to Business
Performance
Management
Value to CIO/IT
People
Processes
Analytic Applications
Operational Efficiency
Strategic Business Transformation
Information
Value to CIO/IT
BI Platforms
Higher Business Agility and Scale
Lower TCO
Technology
Information
Management
Infrastructure
Gartner's Business Intelligence and Performance Management Framework should be used to create the vision and plan for the BI and PM investments and initiatives of organizations. The framework should be used to define, align and integrate the metrics, people, processes, components, methodologies and capabilities associated with the different layers, and to place them into the larger business-oriented context and linkage to strategy execution. This framework also can be useful for performing a readiness/completeness assessment of existing initiatives and for assessing the alignment and integration of the technology with the needs of the business.
Action Item: Use Gartner's Business Intelligence and Performance Management Framework to build a more complete and integrated plan for these initiatives, as well as to yield better returns from related business and IT investments.
Enabling
Contributing
Value to Business
"Gartner's Business Intelligence and Performance Management Framework," G

17. Cornerstones of Optimizing Business Value
Business Strategy
Enterprise strategy: Defined aspirations, plans, objectives
Alignment with strategic business objectives and sponsors
Performance Management
Business Units
Enterprise
Business Functions
Business Process
Strategic Metrics
Process Performance Metrics
Management Performance Metrics
The right metrics within an overall performance management framework
Key Issue: What are the cornerstones of optimizing business value?
The strategy level is where the strategy, strategy maps, objectives and corporate budget are defined. As with any IT investment, the degree to which your BI investments support your organization's strategic goals and objectives will determine the business impact, acceptance and ultimate success of the effort. At the PM level, you define how the BI and PM program objectives and deliverables link to your overall business strategy and support the value-creating processes associated with the strategy. The business value of doing this right is the alignment of multiple business processes with strategic business objectives.
Performance metrics need to fit within an overall framework that meets the following criteria: 1) All metrics, when used collectively, are leading indicators of financial performance. 2) No more then seven (plus or minus two) metrics are to be used at any given level. 3) The metrics should be collectively exhaustive and mutually exclusive. 4) The framework should focus on the executive and middle-management levels. 5) The framework should be based on standard prime metrics to foster collaboration and enable comparison to internal and external entities. 6) The framework should be made flexible by an architecture that allows many combinations of standard and custom metrics. 7) The holistic nature of the framework should capture the cause-and-effect relationships between business functions. 8) The metrics should be selected based on data available in automated business systems. 9) The framework should be evolutionary.
Action Item: Enterprises should develop competency in business metrics determination, measurement and monitoring. Start simple, develop a discipline, and, when competent, apply the framework to all initiatives. IT staff must ensure that analytic applications that support PM use the metrics framework to provide logical linkage and integration points between these systems.

18. Cornerstones of Optimizing Business Value (Continued)
People
Process
Skills of process managers and developers
Business
Shift focus to business and analytic competency
Establish cross-process, cross-enterprise BI
Break down politics and silos
Define reusable standards, methods and policies
Provide BI program management
Business Intelligence
Competency Center
Analysts IT
Analytic Applications
Strategy- Driven
Faster deployment and process fit
Management- Driven
Linked: Integrated plans and analysis
Active: Informed decisions made quickly at point of work
Networked and collaborative: Cross-process, cross-enterprise
Analytic Continuum
Process- Driven
Key Issue: What are the cornerstones of optimizing business value?
The people and processes layer is as follows:
• Definition — Priority and definition of information (including metadata) and analysis needed by users and processes
• Output — Analytic requirements, BI competency center staffing, standards and methodology, and data governance and compliance policies
• Business value — Effective use of scare resources and costly skills, repeatable methodologies, and IT and business resources organized to best support the needs of the users and business objectives
The analytic applications layer is as follows:
• Definition — Business rules and computations/analysis
• Output — Style of integration to business processes and other applications, analytic application portfolio and architecture, and build versus buy.
• Business value — Consistency and collaboration in analysis and optimization of process and cross- process performance; more relevant, accurate, consistent and timely analysis and decisions

19. Cornerstones of Optimizing Business Value (Continued)
Strategic Planning Assumption: Through 2009, the demands for consistent and transparent information across the organization will force enterprise information management (EIM) to mature as a discipline in 60% of Global 100 companies.
BI Platforms
Integration
Analysis
Delivery
Information analysis and delivery
Metadata Management
Development and Administration
Workflow and Collaboration
OLAP
Scorecarding
Visualization
Predictive Modeling and Data Mining
Reporting
Ad Hoc Query
Microsoft Office Integration
Dashboards
Build on the basics
Reporting, dashboards and flexible querying
Focus on integration
Set standards
Eliminate redundancy
Information Management Infrastructure
Availability, transparency and data quality
Data Services
Using data effectively:
Knowing it exists
Knowing where it is located
Having access to it
Knowing how to use it
Integrate Data and Content
Move, Transform and Enrich
Governance, Stewardship and Quality
Access, Monitor and Secure
Metadata Management and Semantics
Models
Repositories
Standards
Rules
Ontology
Taxonomy
Key Issue: What are the cornerstones of optimizing business value?
BI platform level — At this level of your case, you should define which combination of BI platform capabilities the prioritized processes and users require from their analytics applications, and how you should address this diversity of capabilities while minimizing redundancy: 1) Focus on the basics, leveraging reporting and flexible querying to meet most user requirements, and introduce sophisticated tools for the few in the user community that needs them. 2) Broadly communicate tool standards to ensure maximum tool consistency throughout the enterprise (see "BICCs Drive Business Intelligence Platform Standardization," G ), but be willing to deviate from the standards when requirements dictate, and constantly evaluate the standard set of tools, making adjustments as needed. 3) Control proliferation of nonstandard tools, and perform tool consolidation activities in which functional overlap exists.
Information management infrastructure layer: Managing information as a strategic asset — The EIM drivers are as follows: 1) Process simplification and operational efficiency; and 2) enterprise agility and competitive differentiation. Streamline business processes by eliminating redundancy, increasing standardization and promoting reusability. Organizations are looking to reduce risks associated with conflicting information sources and are requiring transparency as data flows across applications, to support data lineage. Support enterprise agility through: 1) Consistent data structures, definitions and standards; 2) semantics reconciliation; 3) data quality/profiling; 4) encapsulation (expressing business/system functionality via metamodels); and 5) metadata management (location, context and reuse).
Data Management
Master Data Management
Data Warehousing
XML Documents

20. Key Issues 1. What is the BI(g) discrepancy?
2. How are organizations getting value from BI?
3. What are the fatal flaws to avoid?

21. Believing that "If you build it, they will come"
Flaw #1
Key Issue: What are the fatal flaws to avoid?
Believing that "If you build it, they will come"
Flaw No. 1: Believing that "If you build it, they will come."
Often the IT organization sponsors, funds and leads its BI initiatives from a technical, data-centric perspective. The danger with this approach is that its value is not obvious to the business, and so all the hard work does not result in massive adoption by business users — with the worst case being that more staff are involved in building a data warehouse than use it regularly. Gartner recommends that the project team includes significant representation from the business side. In addition, organizations should establish a BI competency centre (BICC) to drive adoption of BI in the business, as well as to gather the business, technology and communications skills required for successful BI initiatives.

22. Managers Needing to "Dance with the Numbers"
Flaw #2
Managers Needing to "Dance with the Numbers"
Flaw No. 2: Managers "dancing with the numbers."
Many companies are locked into an "Excel culture" in which users extract data from internal systems, load it to spreadsheets, and perform their own calculations without sharing them companywide. The result of these multiple, competing frames of reference is confusion and even risk from unmanaged and unsecured data held locally by individuals on their PCs. BI project instigators should seek business sponsors who believe in a transparent, fact-based approach to management and have the strength to cut through political barriers and change culture.

23. "Data quality problem? What data quality problem?"
Flaw #3
"Data quality problem? What data quality problem?"
Flaw No. 3: "Data quality problem? What data quality problem?"
Data quality issues are almost ubiquitous, and the impact on BI is significant — people won't use BI applications that are founded on irrelevant, incomplete or questionable data. To avoid this, organizations should establish a process or set of automated controls to identify data quality issues in incoming data and block low-quality data from entering the data warehouse or BI platform.

24. "Evaluate other BI platforms? Why bother?"
Flaw #4
"Evaluate other BI platforms? Why bother?"
Flaw No. 4: "Evaluate other BI platforms? Why bother?"
"One-stop shopping," or buying a BI platform from the standard corporate resource application vendor, doesn't necessarily lower the total cost of ownership or deliver the best fit for an organization's needs. BI platforms are not commodities, and all do not yet deliver all functions to the same level, so organizations should evaluate competitive offerings, rather than blindly taking the path of least resistance. Integration between the application vendor's ERP/data warehouse and BI offerings is not a compelling reason for ignoring alternatives, especially because many third-party BI platforms are as well-integrated.

25. "It's perfect as it is! Don't ever change ..."
Flaw #5
"It's perfect as it is! Don't ever change ..."
Flaw No. 5: "It's perfect as it is. Don't ever change ..."
Many organizations treat BI as a series of discrete (often departmental) projects, focused on delivering a fixed set of requirements. However, BI is a moving target — during the first year of any BI implementation, users typically request changes to suit their needs better or to improve underlying business processes. These changes can affect 35% to 50% of the application's functions. Organizations should therefore define a review process that manages obsolescence and replacement within the BI portfolio.

26. "Let's just outsource the whole darn BI thing"
Flaw #6
"Let's just outsource the whole darn BI thing"
Flaw No. 6: "Let's just outsource the whole darn BI thing."
Managers often try to fix struggling BI efforts by hiring an outsourcer that they expect will do a better job at a lower cost. Focusing too much on costs and development time often results in inflexible, poorly architected systems. Organizations should outsource only what is not a core competency or business and rely on outsourcing only temporarily while they build skills within their own IT organization.

27. "Just give me a dashboard. NOW!"
Flaw #7
"Just give me a dashboard. NOW!"
Flaw No. 7: "Just give me a dashboard. Now!"
Many companies press their IT organizations to buy or build dashboards quickly and with a small budget. Managers don't want to fund expensive BI tools or information management initiatives that they perceive as lengthy and risky. Many of the dashboards delivered are of very little value because they are silo-specific and are not founded on a connection to corporate objectives. Gartner recommends that IT organizations make reports as pictorial as possible — by including charting and visualization, for example — to forestall demands for dashboards, while including dashboarding and more-complex visualization tools in the BI adoption strategy.

28. "Err … X + Y = Z, doesn't it?" Flaw #8
Flaw No. 8: "X + Y = Z, doesn't it?"
A BI initiative aims to create a "single version of the truth," but many organizations haven't even agreed on the definition of fundamentals such as "revenue." Achieving one version of the truth requires cross-departmental agreement on how business entities (customers, products, key performance indicators, metrics and so on) are defined. Many organizations end up creating siloed BI implementations that perpetuate the disparate definitions of their current systems. IT organizations should start with their current master data definitions and performance metrics to ensure that BI initiatives have some consistency with existing vocabulary, and they should publicize these "standards."

29. "BI strategy? No thanks, we'll just follow our nose."
Flaw #9
"BI strategy? No thanks, we'll just follow our nose."
Flaw No. 9: "BI strategy? No thanks, we'll just follow our noses"
The final and biggest flaw is the lack of a documented BI strategy, or the use of a poorly developed or implemented one. Gartner recommends creating a team tasked with writing or revising a BI strategy document, with members drawn from the IT organization and the business, under the auspices of a BICC or similar entity.

30. Recommendations Bottom line, and ... ... What you can do tomorrow
Assess your BI value, risks and failure points
The information infra- structure is the foundation
BI tools and applications are not "one size fits all"
Without the right skills, organization and processes, BI cannot succeed
BI exists to fuel business strategy
Judge your situation against case studies, BI framework, cornerstones and fatal flaws
Strive for consolidation, standardization and flexibility
Evaluate your user segments, and define a portfolio that addresses the range
Establish a BI competency center to ensure BI is embedded in business processes
Align BI efforts with critical business initiatives

31. Business and IT Need to Come Together

32. The BI(g) Discrepancy: Too Much Technology and Not Enough Intelligence
James Richardson
The Future of IT
September 1-3, 2009
Centro Banamex
Mexico City, Mexico
Rita Sallam
Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via Gartner is a registered trademark of Gartner, Inc. or its affiliates.
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2009 Gartner, Inc. and/or its affiliates. All rights reserved.