Better Decision Making with

Proper Business Intelligence

Quality information is key to making quick, rational business decisions
A
s companies focus on growth and business development, the
availability of quality information is crucial to making quick,
rational business decisions. New technologies, however, can
cause information overload, leaving decision makers buried under a
mass of irrelevant, inadequate, and inconsistent data. Some companies
manage to provide their decision makers with precise, relevant data
in an easy-to-grasp format. These companies have discovered the value
of effective business intelligence capabilities.

For many companies, new technologies are causing
information overload, leaving decision makers
overwhelmed with inadequate, incorrect, incon-
sistent and misleading information. Indeed, the
various acts of retrieving and processing this
often useless information can tie up numerous
resources. Yet there are companies that manage
to provide their decision makers with processed
and automatically consolidated raw data, presented
in an understandable, easy-to-grasp format. These
companies provide insightful information for
quick, profound decision making. What do these
companies have that the others dont? Business
intelligence (BI) capabilities and processes.
Business intelligence is a research field that
focuses on theoretical and practical aspects of
achieving a solid information basis for decision
making. This paper summarizes A.T. Kearneys
experience in helping companies shape their data
processes to obtain the right information for
rational and quick decision making.
What Is Business Intelligence?
Business intelligence focuses on the particular field
of data processing and consolidation to retrieve
information for decision making. The overarching
objective is to providevia various solutions
the right knowledge to the right people at the
right time. Doing this requires the right mix of
IT systems, architectures, data structures, data-
collection processes, and responsibilities for provid-
ing meaningful information. Business intelligence
has a proven impact on key performance indica-
tors (KPIs). For example:
60 percent of executive managers state that the
use of a performance management tool has a
positive impact on shareholder value
Return on equity (ROE) is more than twice
as high in companies that widely use perfor-
mance management tools compared to those
that do not in the same industry
When assessing BI capabilities, there are four
levels to consider:
Reporting. Reporting is a core functionality
of BI tools as the objective is to create recurring,
standard, reports in an efficient and user-friendly
manner. Reports are predefined and static by
nature, generated either by request of an end-user
or refreshed periodically through an automatic
scheduler (uploaded on Intranet servers or shared

BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE | A.T. Kearney 1

 drives and accessible to a predefined group of cor-
porate users). Key functionality is reduced to data
consolidation and aggregation from various
sources in a repetitive approach (automated, ide-
ally) from trusted data sources.
Dashboards. Dashboards contain high-level,
aggregated strategic company data, inclusive com-
parable presentations, and consolidated perfor-
mance indicators. They include both static and
interactive reports with data translated into graph-
ics, charts, gauges and illustrations to simplify the
communication of complex topics. Dashboards
allow basic interactions (such as drill down, slice-
and-dice operations to play with the data) and
provide various levels of detail to achieve deeper
insights. However, the explanatory power of dash-
boards relies mostly on users interpretations.
Analysis. At the analysis level, BI systems
provide not only consolidated information that
users can detail and filter, but also forecasts and
trend analyses to develop new insights (based on
the raw data).
Analytics. At the top level of a BI system is
automated intelligent data analyses based on
sophisticated fuzzy logic and neuro-fuzzy sys-
tems. Based on user-friendly but powerful func-
tions, the BI system can retrieve meaningful
insights while hiding the underlying complexity
of data interpretation. What-if scenarios and
simulation functionality provide advanced, tai-
lored decision-making support.
The fundamental basis of every BI system,
however, is the data base on which it operates. Basic
systems focus on corporate financial data only,
while advanced systems interconnect internal and
external sources with qualitative and quantitative
data. Advanced systems process the comprehensive
data set using methods perfectly tailored to a firms
needs and condense the findings into meaningful
knowledgehiding the complexity and selecting
2 BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE
only the maximum amount of input necessary to
help executives make the right judgments.
The Advantages of Business Intelligence
When analyzing a business intelligence solution,
it is important to consider the business benefits,
including improved overall decision making and
increased efficiency for business reporting and
analysis. To this first point, BI offers four impor-
tant prerequisites for proper decision making:
Required information is available
Data is consistent across organizational units
Information can be easily analyzed using built-
in analysis functionality
Reports are presented in a user-friendly format
A well-designed business intelligence solution
ensures that information across the organization is
available in a consistent, reliable manner. Figures
can be aggregated and compared in different
business units, assuring the validity of like-for-
like data comparisons, and that all management
reports provide operations leaders and top man-
agement with the information they need to steer
the business properly.
Essentially, BI improves efficiency on both the
information technology (IT) side and the business
side of the organization. On the IT side, workers
are freed from the recurring task of creating and
changing data reports as end-users are able to create
and change their own reports. On the business
side, less time is spent in data analysis and prepara-
tion as management reports are created directly
from the BI dashboards. Not only is the data in
these reports more up-to-date and credible, but
also they are easier to read and handle. And, impor-
tantly, the information can be downloaded on
smart devices, including the iPhone and iPad. The
sidebar on page 4, What Makes a BI Leader?, offers
a short list of success factors shared by top business
intelligence organizations.
| A.T. Kearney
Figure 1
Three phases of a business intelligence solution
Phase 1 Phase 2 Phase 3
Define key performance Collect requirements, build Implement solution
indicators and level of business prototype and conduct and improve tool
intelligence to be achieved vendor proof of concept according to release plan
Source: A.T. Kearney analysis
Figure 2
The main tasks in Phase 1
Perform qualitative Determine value Analyze Make
evaluation correlations risks recommendations
Evaluate potential key Evaluate simple Compare analysis of
performance indicators profitability metrics value-add KPIs
(KPIs)
Assess select KPIs for Identify potential risks of
Analyze empiricial findings appropriateness making the wrong decision
related to use of KPIs Source: A.T. Kearney analysis
Three Phases of Implementation connecting to existing data warehouses and addi-
A successful corporate BI implementation has tional calculations should be kept to a minimum.
three phases (see figure 1). In implementing BI sys- Also, the various layers of a BI system are evalu-
tems, it is important to begin with business ated to define which areas should be addressed
requirements, because projects that are technically and identify specific parts that should be elimi-
triggered usually fail. nated (see figure 3 on page 4).
Phase 1: Define the necessary KPIs on a It is important to clarify at the beginning
management dashboard. A key activity in the which areas shall be covered by the project: Is it
first phase is to define future reports and KPIs, a BI system for finance KPIs only or does it also
which often means eliminating some existing include supply chain management? Will the proj-
reports, as many are unnecessary and do not truly ect integrate other functional areas, departments
reflect the companys objectives (see figure 2).1 or even specific business lines within operations?
Next, is assessing data availability to calculate Often human resources and customer relationship
defined KPIs; a sound data basis is a key success management (CRM) are the next candidates to
factor for system implementation. External tools improve finance BI and integrate more of the
1
Phase 1 should always be completed fully before proceeding with the second phase, as the required reporting and the defined KPIs set the framework for tool selection.
BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE | A.T. Kearney 3
 Figure 3 business. The link to operations is more difficult Phase 2 is not only about collecting require-
Layers of a business intelligence system as KPIs from manufacturing, production or logis- ments regarding the functionality of a future tool
tics are fairly different from finance KPIs and are (navigation and analysis deep dives, for example)

factor
Apps
Form

PSO

Org
often difficult to connect to existing KPI trees. but also about report design, dashboards and tool
Desktop gadgets Office suites Mobile Disconnected Even between similar business lines, KPIs are functionality. One point must be stated very

Strategy
Delivery

Industry vertical applications

Portals Interactive voice response, ATM, point-of-sale sometimes slightly different because they repre- clearly: A pure management cockpit or dash-

Appliance
Dashboards Alerts Advanced data visualization sent different business models for instance, board cannot replace the internal or external
Reporting

Methodology
Search Geospatial Reporting: ad-hoc, analytical, production internal production for intermediate products or reporting. As a first step, it can be seen as a second

SI
Performance Metrics / KPIs Planning Scorecards external production for final products. If the long- channel (always available), but with a different
management

MSP / apps outsourcing

Strategy / objectives management
term strategy is to analyze operational KPIs, this level of detail (management adequate). All man-
Support Collaboration Life-cycle Mgt. Localization QA Version control
should be addressed at the outset. Once these agement cockpit tools offer a reporting function-
applications Metadata-integration, repositories ECM eLearning MDM
questions are answered and all affected business ality used to print-out the dashboard content.
Data / text mining Guided decisions NLP Guided search

BISaaS
areas are addressed, the second phase can begin. Replacing the complete paper-based internal (or
Analytics Time series OLAP Operational DSS Predictive analytics
Phase 2: Create a design and navigation external) reporting requires significant efforts as

Enterprise apps: ERP, CRM, SCM, ERM

Usage analytics Statistical analysis Web analytics
Accelerators / query optimization Adapters / tool kits
prototype and build a proof of concept. Four the detailed design of every single page is outlined
BAM / CEP BPM / BRE integration Discovery accelerators
tasks are involved in preparation for system imple- up-front. Both the dashboard screen design and
mentation. The result is a proof of concept, the report layouts, which cover all of the depicted

Center of Excellence
Discovery and DQ cleansing, profiling EAI / SOA EII ETL / CDC

Governance
Hosted BI (ASP)b-layers)
integration designed before the comprehensive implementa- content regarding historic numbers and compari-
Integration third party applications
Operational data stores (ODS), data warehouses (DW), data marts (DM) tion begins. At this point, software vendor selec- sons, among other things, finally get defined
Report mining Services registry and repository tion is independent of specific design requirements before the detailed concept is handed over to a
Columnar DBMS Hierarchical / XML In-memory DBMS and often driven by strategic policies or IT land- system integrator for implementation. The real-
Data Multi-dimensional OLAP Multi-value RDBMS RDBMS scape requirements. Based on IT architecture ization of the screens and the corresponding KPI
Streaming DBMS Search DBMS rules, a short list can be devised up-front to select visualization are the main drivers of the system
BPO

Infrastructure Network Servers Storage appropriate tools to fit the companys require- implementation and the testing. Therefore stabil-
Sources: Forrester, A.T. Kearney analysis ments, IT strategy and IT landscape (see figure 4). ity is required.

Figure 4
The tasks in phase 2
What Makes a BI Leader?
From our experience helping com- Establish a balanced scorecard Focus on cross-organizational
panies implement their business Define clear data dimensions and efforts
intelligence projects, we have found structures Distinguish between business- Assessment Vendor Requirements
Proof of concept
selection and prototypes
several common characteristics or Develop a master data manage- driven and IT-driven projects
success factors that differentiate ment plan Define the long-term BI scope,
the BI leaders from the followers. Establish corporate data gover- from the beginning Perform assessment Draw up a short list Complete a list of Begin company-vendor
to ensure the need of vendors, taking into business requirements discussions
The BI leaders: nance and clear ownership of Realize a mobile version of for a cockpit account industry reports and build a first simple
Define and optimize corporate master data business intelligence and other external PowerPoint prototype Help the vendor understand
Conduct a brief cost- information to develop a look-and- the client and ensure vendor
report standards Use report visualization in pilots benefit analysis of the receives timely feedback so
feel of the final product
Focus on the business not the data Leverage web technologies area and other potentially Assess the options from to make quick improvements
affected areas such as an internal viewpoint
procurement Source: A.T. Kearney analysis

4 BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE | A.T. Kearney BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE | A.T. Kearney 5
 The proof of concept increases the developers A release plan ensures first results are delivered and formulas. Close interaction between system ment as the key user due to corporate reporting
understanding of the companys requirements quickly, while the final and comprehensive solu- provider and business departments (as the final and corporate management requirements; finance
before starting the real systems implementation. tion is created in several steps, aligned with report- users and clients of the system) is crucial to the defines the main KPIs on a corporate level and
In our experience, a quick prototype allows a ing cycles and data availability. The first release success of the project. The management cockpit ensures standardization across all different busi-
company to check the design of all possible pre- should provide all required dashboard functions or dashboard fulfills the design and functional ness models within the firm.
selected tools and test the capability of the poten- (design, navigation and drill-down) and some of requirements because it provides clear visibility Operational KPIs are provided by the differ-
tial solution provider. Work packages can also be the reporting requirements, which are detailed in to management and the necessary ease of use. ent operating units and standardized to ensure
tested to assess vendors innovation capabilities in the follow-on implementation phases and can be Although all required data or KPIs may not be that consistent content is reported to top manage-
solving design questions. Finally, the firms delivered sequentially. Typically, first releases lack included in the beginning, they are provided ment. The CIO and corporate IT take over the
requirements can be tested and challenged. the full data set. An essential activity in the BI throughout the steps. role of supporting KPI definitions by providing
Phase 3: Implementation. Implementation is project is to cleanse existing data and establish information about data sources, data availability
a typical IT project. However, due to high visibil- a process to record new data in a proper way, Governance and the CIOs Role and data quality. And they start the analysis on
ity and management awareness, the implementa- which often requires developing the entire data Within a BI project, the corporate IT and the how a business intelligence tool could be used to
tion should be fast and provide quick solutions. architecture, including dimensions, hierarchies CIO moderate between the different business fulfill high-level requirements (see sidebar: Business
departments that are involved, the internal IT Intelligence: A Case Study).
group, and the software provider or implementer. Part of the project involves defining future
A BI project is often driven by the finance depart- BI governance. This often means establishing a BI
Business Intelligence: A Case Study
The management team at a large Next, business-specific operational implementation began. Within three
Figure 5
German company decided to imple- KPIs were added to the dashboard, months, the company had its first
Detailed analysis of BI software vendors
ment a corporate-wide business a simulation tool was developed release, covering main functional-
intelligence (BI) process. The com- to provide units with a business- ities, dashboard design and naviga-
pany, involved in heterogeneous planning model to illustrate the tion, and first-reporting factors. The
businesses, started with pilot units dependencies between KPIs, and release plan took into account the Category On-board tools Vendor 1 Vendor 2
in its three business concerns, defin- a BI tool-based reporting process main reporting cycles, and two sub-
Implementation Only static design possible; Through TOOL 1 WYSIWYG Possible according to the
ing financial key performance indi- was designed and implemented sequent releases were scheduled design performance critical the dashboard can be handled demonstration; no information
given on the interface builder;
cators (KPIs) to manage and direct The IT work began during the within the planned timeframe. use of all graphic types possible
the corporation. final definition of corporate-wide Soon after introduction, the
Implementation Use of standard BDS Vendor 1offers functional Possible according to the
The management team knew KPIs and reporting, providing infor- management team was delighted as comments associated with building blocks for the demonstration
performance issues storing of comments in the Comments can only be used in
that success would depend on cor- mation about the availability of exist- user acceptance proved stronger than SAP BW the machine-three environment
porate-wide definitions for its KPIs ing data within the data warehouse. expected throughout the organiza-
Implementation Generally not simulation Simulations can be saved; Possible according to the
so they could be cascaded down to This was followed by the vendor tion. When asked about the success simulation functionality retraction through vendor 1s demonstration; simulations can
all business units. and tool-selection process. A proto- factors, team members were quick to own functionalities into BW be saved and retracted into the
backend SAP BW
The project began with develop- type was designed, and software pro- cite the top two: design and ease of
Transition from Due to low performance on Look-and-feel remains the Look-and-feel remains the same
ment of a basic management dash- viders were asked to use the design navigation within the BI tool, and prototype to comments and the illustration same Comments and simulation can be
board that provided a visual KPI tree and business units functional on-time delivery of the major KPIs. release I to II of graphs, no usage possible Comments and simulation executed early
in phases 1 to 2 can be executed early
to clarify the logical dependencies of requirements to develop a rough All in all, the company is now
Connectivity to Executed on machine Either DataMart on machine According to vendor, it can
the two main KPIs and then illus- proof of concept. dedicated to using business intelli- data one, no export of the cube two or WebService on communicate with SAP BW 3.5
trating all the subsequent KPIs that Immediately after the proof-of- gence to help steer it on a richer data needed machine one but not demonstrated

flowed from them and how they concept presentations, the vendor- and more successful course. Hardware costs None BOE Infrastructure for Basic infrastructure on machine
navigated through the organization. selection process was finalized and LiveOffice and reporting tool one has to be built anew
(phase2)

Source: A.T. Kearney analysis Full function Very limited function

6 BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE | A.T. Kearney BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE | A.T. Kearney 7
 center of excellence led by the finance department
that includes data governance with BI system
maintenance authority. Corporate IT should be
part of the change advisory board that assesses and
evaluates change requests based on the capabilities
of the system solution, while IT maintains tech-
nology authority.
Choosing Tools and an Implementation
Partner
BI tool selection is rarely a green field approach.
The corporate IT strategy, system landscape and
the main requirements regarding the BI level to
be achieved are all guidelines in the selection pro-
cess. Market research and analysts estimations
can be used as support documents, but in most
cases these analyses are too general and cannot
be adapted to meet company specifics. Instead,
external reports are typically used afterwards as
support information to justify the short-list ven-
dors or tools.
The software vendor and implementer are the
same in most cases, as only a few companies are
able to provide a full business intelligence suite,
connected or even integrated somehow to the
main enterprise resource planning (ERP) systems,
such as SAP or Oracle.
A company-specific questionnaire and evalua-
tion template allows the efficient gathering of key
requirements. The main questions or key evalua-
tion points should be shared in advance with the
Authors
Alexander Martin is a principal in the strategic information technology practice. Based in the Dsseldorf office,
he can be reached at alexander.martin@atkearney.com.
Robert Jekel is a consultant based in the Zurich office. He can be reached at robert.jekel@atkearney.com.
Edgar Simons is a consultant in the Dsseldorf office. He can be reached at edgar.simons@atkearney.com.
8 BETTER DECISION MAKING WITH PROPER BUSINESS INTELLIGENCE
short-listed software vendors to give them an
opportunity to prepare the tool presentation and
to answer all questions completely. The clearer the
requirements are documented and described, the
faster the selection process can be executed (see
figure 5 on page 7).
A rough prototype such as a PowerPoint
A.T. Kearney is a global management consulting firm that uses strategic For information on obtaining
visual of the management cockpit to demonstrate
insight, tailored solutions and a collaborative working style to help clients additional copies, permission
key navigation functions and design-related
achieve sustainable results. Since 1926, we have been trusted advisors on to reprint or translate this work,
requirements will help both sides understand the CEO-agenda issues to the worlds leading corporations across all major and all other correspondence,
desired outcome and manage expectations. It is industries. A.T. Kearneys offices are located in major business centers please contact:
the basis for the later detailed design and concept, in 37 countries.
containing the description of each requirement.
A.T. Kearney, Inc.
This and the more technical description of the
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always, is of the essence.
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