Business Intelligence: The Next
Generation of Innovation
Kurt Schlegel
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BI is the Most Important CIO Priority for
3 Years Running
2008 CIO Technology Priorities
To what extent will each of the following
technologies be a Top 5 priority for you in 2008?
Rank
2008
Rank Rank
2008
2007 2006 Increase*
Business Intelligence Applications
1
1
1
11.20%
Enterprise Applications (ERP, SCM and CRM)
2
2
**
8.02%
Server and Storage Technologies (Virtualization)
3
5
9
8.45%
Legacy Application Modernization
4
3
10
5.79%
Security Technologies
5
6
2
8.53%
Technical Infrastructure
6
8
12
4.67%
Networking, Voice and Data Communications (VoIP)
7
4
8
6.83%
Collaboration Technologies
8
10
4
7.75%
Document Management
9
9
**
7.91%
Service-Oriented Technologies (SOA and SOBA)
10
7
6
6.71%
* Unweighted average budget change
** New question for 2007
Source: 2008 Gartner Executive Programs CIO Survey, January 10, 2008
Key Issues
1. How can BI evolve beyond reporting measures
to making great decisions?
2. How can IT leaders drive broader BI adoption?
3. How can the scope of BI initiatives move from
enterprise to industry wide?
How to Build a Skyscraper
… and Why Does It Matter to BI?
Monadnock (1891)
Chicago
17 Stories
Flatiron (1901)
New York
22 Stories
Burj Dubai (YE08)
Dubai
164 stories
Today’s BI Strategy: Urban Sprawl
• BI focuses too much on Bottom Up reporting of performance measures.
• And the measures are not what your CEO or senior managers care about.
• Projects are built with little governance or alignment with corporate strategy.
Portfolio of BI and Performance
Management Applications Expand
The BI and Performance Management Continuum: Decision
Making Becomes a Core Competency
Strategy
Driven
Analyst/
Management
Driven
Process
Driven
Enterprise
Goals
•
Start with
Corporate
Strategy
•
Align Key
Performance
Indicators (KPI)
at Each Level
•
Focus on Root
Cause Analysis
down to the
process level
Business
Functions
Business
Process
Result: Smarter Decisions
Key Steps to Evolve BI Beyond Reporting
Measures to Managing Decisions
Experimental Design
Decision
Making
as a core
competency
Linking Planning,
Reporting & Analysis
Cultural Change
Quality
Cost
Tradeoff
Analysis
Skills Development
New Capabilities
Business Vision
& Sponsorship
IT Delivers
Reports & Dashboards
Data Lineage,
Governance and Quality
Modeling
Forecasting,
Simulation,
Optimization
A Text Book Example: The Oakland A’s
•
"Moneyball: The Art of Winning an
Unfair Game" written by Michael Lewis
- Account of Billy Bean, manager of the
Oakland Athletics baseball team
•
Used BI to manage processes
(e.g., scoring runs) and predict
performance (e.g., games won)
- Used "on base %" instead of
"batting average" to draft players
- History showed, in the data, that the old
"gut feelings" and adages were wrong
- Focused on avoiding outs instead of advancing the runner —
a major change to the business process of baseball.
•
Result: Able to win 90+ games per year with
one-third the payroll of the New York Yankees
Key Issues
1. How can BI evolve beyond reporting measures
to making great decisions?
2. How can IT leaders drive broader BI adoption?
3. How can the scope of BI initiatives move from
enterprise to industry wide?
Driving BI Adoption
Future Scenarios: Wide Ranging From Human- to Machine-Driven
Empowering
Users With BI
Organizational Efficacy
Requires the Proper Balance
Optimizing Business
Process With BI
• Search
• Alignment
• Orchestration
• Visualization
• Transparency
• Business rules
• Empowerment
• Collaboration
• Predictive modeling
Measure
Decide
Manage
Optimize
BI Continuum
Discover
Innovate
Interactive Visualization
Source: Advizor Solutions
BI Integrated with Search
Analysis
Centric
Structure, Qualification,
Control of Information
Reporting/Dashboards
Ad hoc query
BI Content Search
High
Auto- Queries
Explore Data Dimensions
Content
Analytics
Enterprise Search
Low
Search
Centric
General to
Specific
Specific to
General
User
Interaction
Style with
Information
Unicredit (HypoVerinsbank AG):
Accelerating Decision Processes
Interface Layer
Staging Area
Operational
Data Store
validated, integrated
historical data
operational
systems
Service-Layer
Risk Models
model
parameter
Extracts
Data Marts
Reporting &
Analysis
multidimensional
data structure
& reporting views
HTML
PDF
CSV
XML
XLS
risk & pricing
models
transformation
Load
E/R
model
external
data
sources
Browser
Mail
FTP
business
rule engine
business
rules
star
model
100
80
60
40
20
0
1st
75 sources
370 jobs
127 labels
~ 2,000 columns
55 labels
1,660 columns
10 facts
48 dimensions
Metadata Management
Data Modeler
ETL
Visual
Rules
BI Platform
2nd 3rd
4th
120 reports
150 users
Scheduling
Alerting
Information Buffet: EuroDisney
•
•
•
•
•
Challenge: Optimize customer satisfaction and reduce expenses
Solution: Define KPIs, predict, publish and alert
Results: +15% customer satisfaction; Higher staff efficiency
Success factors: Distributed decisions aligned with business goals
Lessons learned: Cultural change takes years, but it's worth it
Key Issues
1. How can BI evolve beyond reporting measures
to making great decisions?
2. How can IT leaders drive broader BI adoption?
3. How can the scope of BI initiatives move from
enterprise to industry wide?
Five Major Mutually Reinforcing
Discontinuities
Software
as a
Service
Open
Source
Discontinuities Affect
• Business Unit Independence
Global
Class
• Vendor Balance of Power,
Distribution, Marketing and
Business Models
• Implementation Alternatives
• Rogue End-User Investments
• Governance, Authority and
Control
Web 2.0
Consumerization
• Budgets
• Architectural Models
Understand the Trade-Offs That SaaS
Presents
Upsides
- Pay for what you use
- From an operational budget
- Basic functionality that you
really need, not bells and
whistles that you might need
- No operational management
worries
- No infrastructure
overhead/management
- Medium-term lower TCO
- Faster implementations
- Easier integration*
* Theoretically; particularly of SaaS to SaaS
applications written with open APIs
Downsides
- No asset value
- Less central management of
the application portfolio
- More basic functionality*
- Vendor management (incl.
oversight of their operational
management)
- Security concerns
- Longer-term TCO
uncertainties
- "OP2OD" (On Premise to On
Demand) integration
* Sometimes real, sometimes perceived
BI as a Service (BIaaS – Not a Great name)
BI Capabilities
Combined with
Vertically Specific
Information Servies
Input: Detailed
data is provided to
a trusted info
aggregator
Neilsen
IMS
D&B
Thomson Reuters
Dimensional slicing & dicing
Google
Catalina Marketing
NPD
IRI
Comscore
LoanPerformance
LexisNexis
Skytide
Output: Enriched
data fed back to DW
Thomson Healthcare
3 Recommendations for 3 Innovations
 BI initiatives are overly focused on reporting
measures.
Craft a BI strategy that makes decision making a core
competency across your company.
 BI is too hard for 80% of users.
- Craft a BI strategy that embraces emerging technologies
and embeds BI into business processes
 BI initiatives lack an external perspective
- Embrace the combination of BI capabilities and industry
specific information providers