Published by Logica

Copyright © 2009 by Logica

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ISBN/EAN: 978-90-814105-1-9
Table of content
1 Introduction 14

2 Business value of BI 18

2.1 Enterprise Value Management...................................................................................................................... 19

2.2 BI Market pull ............................................................................................................................................... 21

2.3 Track risk and compliance............................................................................................................................ 23

2.4 Extract more value from customer interactions ............................................................................................ 25

2.5 Track performance and align metrics across the organisation ..................................................................... 28

3 Business Intelligence definition 34

3.1 BI Foundation................................................................................................................................................ 36

3.2 Related Disciplines........................................................................................................................................ 38

3.3 Creating value with BI................................................................................................................................... 40

3.4 Maturity models ........................................................................................................................................... 42

4 Managing BI 48

4.1 Cost Effective Management of BI.................................................................................................................. 49

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10
Preface
Dear reader,
Welcome to our newest version of the Logica Business
Intelligence Framework. It has come about thanks to
the global collaboration between multicultural, multi
specialist and very experienced people dedicated to
improving organisational performance enabled by CPM
and BI. When we listen to our customers, or look at our
own company’s organisation, we still face some of the
traditional challenges:
• We have many ways of producing metrics.
• We do not have a common language within each
part of our organisation.
• We provide alignment in mergers but we have
experienced challenges in supporting them.
• We have a wealth of data but have yet to determine
what value it adds and how to deal with the quality
control.
I could keep going, and it is an easy job to list all of the
challenges, but that does not help create value. We
consider every project that involves Business Intelligence
to be an opportunity for transforming and improving
the organisation. It is part and parcel of the change
management process. Since the 90’s we have been
delivering process-oriented projects using pre-built
applications, such as ERP-related solutions. This greatly
helped to rationalise behaviour involved in such a process,
gave us a sense for how IT departments and new maturity
levels operate with an industrialised approach, but in
many cases lacked the impact it had on the associated
decision-making process. If we need proof of this, we just
need to ask ourselves a few questions.
• Do I have the same common language and
definition of indicators throughout my company?
• How do I explain the need for so many reports,
dashboards, etc.?
• Is my Business Intelligence as mature as my ERP?
• If I was to make a call to the helpdesk for every
data quality issue, would I need to double the size
of the helpdesk?
Today, our goal is to give you our latest vision of the Logica
Business Intelligence Framework, and so help you to take
full responsibility for some of the challenges listed above,
and some of the other challenges that have to be faced.
We face them knowing that it will not be easy. We have
shaped visions, crafted strategies, scoped and delivered
projects, and then we completely outsourced them; this
work represents millions of man hours. Our challenge
is to leverage our former common language that we
used for Business Intelligence and to make it a source of
additional value for our customers and our people. The
main difference is that it is not a book written by a few of
our experts but a collaborative effort. It is also the result
of different practices that have been merged together and
the blended experience from a variety of our constituent
countries. They have been challenged by our best people
and customers; the practices that are used are present
because we are confident that they deliver results in
today’s global environment.
So what can I expect from the Logica Business
Intelligence Framework? A quick win could be to
benchmark an approach, a vision, the performance of a
Business Intelligence Competence Center, or simply your
operational costs. Another possibility could be to use the
framework in your own effort of aligning your organisation,
thus avoiding the need of making the investment yourself.

We strongly believe that the Total Cost of Ownership

of BI can be lowered significantly by implementing
a standardised BI development and management
methodology in your organisation. Sharing the same
standards, procedures and guidelines within your
organisation and with your BI suppliers enables effective
communication between the parties involved and makes
BI development a repeatable and predictable process. We
use the BI Framework to align and optimise the blended
delivery of BI, combining local expertise with near- and
offshore delivery centres.

We like to consider this BI framework to be an open

source project. We will maintain it, provide new releases
and commit to improving it with our community and in
doing so unify our customers, partners and people in
doing so. We always talk of Web 2.0 and we would like
to think of our Framework as BI 2.0. Therefore, we invite
you to be part of our innovation process. We prefer talking
about collaboration and development rather than research
and development. We encourage you to read this book
and to become acquainted with BI and our vision of it.
We look forward to you comments.

Stéphane Jaubert,
Managing Director
Business Intelligence
Global Practice Leader

11
1
14

1 Introduction
In a world of uncertainty and economic downturn
Business Intelligence has become critical to survive.
The importance of monitoring and measurement of the
performance of your organisation, knowing the customers
behaviour and complying with regulatory demands has
become evident. Well implemented BI solutions deliver
competitive advantage to an organisation.
With this book we introduce the value of business
intelligence to achieve your business objectives. To give
you an understanding of how to achieve this business
objectives with the use of BI we provide you with a
clear understanding of what BI is. Knowing that most
organisations already have some BI solutions in place we
focus on cost effective management of BI and provide you
with a clear roadmap on how to lower the Total Cost of
ownership of the current landscape and how to utilise BI
to the best advantage of your organisation.
Another important aspect to consider in organising BI is
the continuously changing demand of the organisation for
information. That is why we provide a structured approach
to manage the BI lifecycle in an cost effective and future
proof manner. Then we will dive deeper into the design
and development aspects, presenting our BI engineer
framework. We will end the book with some of the best
practices collected in our Bi community over the years.
All together a lot of material to read, aimed at a broad
audience of business management, BI management and
BI practitioners. The table below provides some guidance
to what chapter is most relevant for what part of the
audience.

Chapter Business Management Business Intelligence Management Business Intelligence Practitioner

2. Business value of BI

3. Business Intelligence definition

4. Managing BI

5. BI Lifecycle

6. BI Solution Engineering

7. Best Practices

Recommended, Optional

Table 1.1 Target audience

 s Enterprise valu e
lin e n g Wo r k s
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m
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e
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18

2 Business value of BI
This section provides an introduction to Business
Intelligence from a business perspective. Too often we
find Business Intelligence initiatives at customer sites that
are very IT oriented. These initiatives started with good
intentions and for very good reasons. Somewhere down
the road however, business focus is lost and technology
pushes the initiative forward. With this section we offer
some guidelines to keep your Business Intelligence
initiative business-driven. We start with an understanding
of business value based on a scientific model, the
Treacey and Wiersema business value discipline model,
and a pragmatic model, the Logica Enterprise Value
Management model. We define the market pull of
Business Intelligence based on current market intelligence.
We finish this section with a more detailed definition of
common business drivers for a Business Intelligence
initiative in an organisation today, including their
stakeholders and real life customer cases.
2.1 Enterprise Value Management
A business case for Business Intelligence should
always be related to the business strategy and business
objectives of an organisation. To get an understanding of
the business strategy of an organisation we use the value
discipline model of Treacy and Wiersema, as shown in
figure 2.1.
In this model three different strategies for an organisation
are characterised:
zz Operational Excellence;
Superb operations and execution. Often by providing
a predictive quality at the lowest possible price.
Task-oriented vision towards personnel. The focus is
on efficiency, streamlined operations, Supply Chain
Management, no-frills. Volume is important. Many
large international corporations are operating out of
this discipline. Measuring systems are very important.
Precise defined product assortment. A typical example
of a company with this type of strategy would be
Toyota.
zz Product Leadership;
Very strong in innovation and brand marketing.
Company operates in dynamic markets. The focus is
on development, innovation, design, time-to-market,
high margins in a short time frame. Flexible company
cultures. A typical example of a company with this type
of strategy would be BMW or Mercedes.
zz Customer Intimacy;
Company excels in customer attention and customer
service. Tailors its products and services to individual
or almost individual customers. Focus is on delivering
products and services on time and above customer
expectations, including lifetime value concepts, Give
Business value of BI
decision authority to employees that are close to the
customer. A typical example of a company with this
type of strategy would be Rolls Royce.
Best
Product
Product
Leadership
Value
Disciplines
Operational Customer
Best total Excellence Intimacy
Best Total
Cost
Solution
Figure 2.1 Value disciplines
Usually an organisation chooses to excel on one of the
defined value disciplines to be successful. However the
other two cannot be neglected of course, and should
score at least on minimum level. In large organisations
often separate divisions or business units own one of the
defined value disciplines. For example a service business
unit that chooses for customer Intimacy and a projects
business unit that chooses for operational excellence.
Analysing your business strategy based on the value
discipline model enables you to identify the areas where
the organisation will gain the most value from Business
Intelligence. An organisation with a focus on operational
excellence will be interested in information related to costs
19
20

and quality. A BI solution for the marketing organisation case - containing benefits, costs and the ROI - is a
of such an organisation will indentify customers that are critical success factor in mobilising key players to drive
looking for the low prices in the first place. An organisation the initiative. The business goals and the strategy define
that focuses on operational excellence will probably invest what the organisation wants to reach and how this
less budget, and therefore a high end solution will not should be accomplished. The strategy will be in line with
be realistic. It is however critical for any organisation to the value discipline that the organisation chooses for. A
monitor and manage its enterprise values. These values business plan - complying to the goals and strategy - is
are based on the business strategy in combination with specified in which objectives and policies are set. Budgets
the risk and compliancy demands, every organisation is are provided to the business functions throughout
facing today. The Logica Enterprise Value Management the organisation. For a compelling business case it is
(EVM) model, as shown in figure 2.2, enables you to necessary that the anticipated benefits contribute to the
do so. This model balances business risks (KRI’s) and objectives of the corresponding business owner while the
costs stay within the budget. If more than one business
owner is involved in a BI initiative, then it is necessary to
find a business owner at a higher level in the organisation.
In that case it becomes important to link the benefits to
Engineer Manage Measure
Value Change Performance the business strategy as well because a common goal
must be found. Also, it is very difficult to implement a
Organisational Model
KRI’s
& Primary Measures KPI’s demanding initiative, while the people involved are focused
on something different. Therefore, the BI initiative should
Manage Ensure Assure also be in line with the chosen value discipline or business
Risk Continuity Compliance priority.

Figure 2.2 Enterprise Value Management

performance (KPI’s) on one axis. On the other axis

continuity and change are balanced. Integrating these
value indicators creates an balanced enterprise value
model for an organisation.
In order to obtain enough high level investment support,
a compelling business case is required. The business
2.2 BI Market pull
Enterprises face a number of issues that drive the need for
timely and accurate information for management decision
making:
zz Globalisation is intensifying competition and promoting
consolidation. To remain competitive, enterprises must
work smarter and reduce costs. For dominant players
the challenge is to integrate acquisitions and reduce
the number of systems and suppliers.
zz In order to improve both market share and customer
retention – especially of their most valuable customers
– market leaders across a wide range of industries
have to build and enhance their knowledge of
customers’ needs, preferences and behaviour.
zz Organisations need to restructure quickly to cope with
changing market conditions. The speed at which they
can re-design company structures can be a major
source of competitive advantage.
zz Enterprises have to extend and enhance their
monitoring of financial, environmental and safety
aspects of their organisations, and improve the
accuracy of information used for reporting and control.
Such information often resides in multiple systems,
needing to be consolidated, analysed and presented in
alternative formats.
zz In addition, the environmental ‘green agenda’ is
encouraging IT departments to reduce their carbon
footprints, by streamlining data processing and
delivering more energy efficient IT.
All these factors continue to generate increased investment
on BI platforms, but with an underlying need to improve
strategy, implementation and outcomes.
Business value of BI
A Gartner Executive Program survey, as shown in figure
2.3, conducted in 2008 across 1,500 organisations found
that BI is the top technology priority for CIOs. But existing
investments in ERP and BI have become a major barrier to
change.
Western Europe BI platform spend
3000
2500
2000
MS
1500
1000
500
0
2005 2006 2007 2008 2009 2010 2011 2012
Figure 2.3 BI Spend Prediction (Source Gartner, Feb 2008)
CIO resources have been absorbed in managing multiple
systems and migrations as vendors consolidate, and
consequently CIOs have been unable to deliver the
service levels expected. The result is that, while existing
BI implementations may be growing, they are not doing
so in ways that are either manageable or optimal for the
enterprise. IT resources have been absorbed in managing
multiple systems and migrations and CIOs have therefore
not been able to deliver the expected service levels.
Another consequence is that BI implementations do not
extend in a manageable and for the business optimal way.
Owing to their complexity, a proliferation of systems from
different vendors, and the lack of a clear strategy, current
21
22

BI implementations rarely meet these expectations.
Organisations are looking for, and desperately need, BI
solutions which can deliver information based on a ‘single
view of the operational data’, rather than multiple views
and therefore inconsistent information.
In summary, the market demand for BI is based on the
following:
zz The impact of globalisation is putting pressure on
C-level executives to make informed decisions, and
on the CIO to provide accurate, consistent and timely
information from a dynamic organisation.
zz Additional information must be gathered and
presented to stakeholders so as to comply with a
growing body of regulations. compliance is a key
issue, as it affects the share price and ability to trade.
zz Organisations need to adapt to operational issues
with appropriate decisions based on up-to-date and
correct information, which is rarely obtainable in the
form required from current BI implementations.
zz Managers are used to having access to on-demand
information from the internet, and likewise expect
internal information to be readily available.
zz Reducing the costs of BI has become a top priority – it
is not unusual for an enterprise’s BI systems today to
be supplied by many different vendors, resulting many
standards.
zz Environmental concerns are also encouraging IT
departments to streamline their data processing
requirements.
Based on these demands we identified a number of
business drivers that justify BI initiatives nowadays:
zz Track risk and compliance;
Enable an organisation to be accountable and
‘in control’ by providing auditable and traceable
information flows from operational systems to
regulatory reporting.
zz Extract more value from customer interactions;
Leverage the full potential of customer data in
an organisation to analyse and predict customer
behaviour and value.
zz Track performance and align metrics across the
organisation;
Support the performance management initiatives in an
organisation by collecting, analysing and presenting
the required metrics.
In the next sections these business drivers will be defined
in more detail, including their stakeholders and a real life
customer case.
2.3 Track risk and compliance

Compliance Stakeholders

Risk Manager, Chief Compliance Officer Wants to mitigate the risk of non-compliance. Needs reliable data. Needs an audit trail

CEO, Marketing Director Wants to maintain reputation and avoid brand damage. Wants to improve brand value.

CFO, Finance Director Wants to avoid penalties. Needs to maintain licence to operate.

Organisations have the obligation to inform stakeholders
such as regulatory bodies (national banks, government),
the shareholders and the public about their performance.
Several regulations like Basel II, Solvency II, the Sarbanes-
Oxley Act (SOX) and MIFID were introduced only in the
last seven years. The timeline presented in figure 2.4
shows the regulations that have been introduced and the
increasing rate with which new regulations have been
introduced in the recent past.
The core requirement of Risk and Compliance initiatives
is to prove that certain business processes are under

Risks of
Web September 11 IAS/IFRS
Clinical Laboratory
Improvement Usage
Amendments Data Standards
21 CFR
Part 11 Solvency II
Dot-com Integration of
Sarbanes- Business
Insurance ‘Shakeout’
Oxley Act Systems
Manager

1965 1985 1990 1998 2000 2002 2004 2006 2008 2010

Alternative New Fully

PURPA Risk Basel Integrated
Financing Capitel Business
New CFR
FERC Part 11 Accord Compliance
Guidance Management

European Data
Protection Act Sarbanes-Oxley
European
Financial Services Compliance
and Market Act Deadline

Acronym Key
CFR = Code of Federal Regulations
FERC = Federal Energy Regulatory Commission
Figure 2.4 Regulations introduced
IAS/IFRS (Source:
= International Gartner)Standards/International Financial Reporting Standards
Accounting
PURPA = Public Utility Regulatory Policy Act

Business value of BI
23
24

control. By requiring that organisations, and even
managers personally, are liable for the information
provided, the information must be auditable and traceable
from the administrative source to the final report. Business
Intelligence offers the capabilities to audit and trace the
information, in design- and run-time. Managing a company
can be compared with navigation by means of a compass
and a map. In both situations you need to select the right
route to the goal and need information while underway.
Applying this to BI, BI Solutions are the tools that provide
the information to understand where you are. What BI can
provide and support is:
zz The blueprint for the quantitative data required by BI to
function successfully.
zz Assurance of the effectiveness of the risk &
compliance framework.
zz Assurance of visibility of targets, risk and compliance
requirements.
zz Improved access, reliability and relevance of
management information used for decision-making.
Organisational Model
Primary Measures

Manage Issues & Change

Reporting & Disclosure

Define Assess Implement Operate Validate
Risk Risk Risk Response & Risk
zz The need and urgency to address risk mitigation to Framework Assessment Mitigation Recovery Monitoring

Compliance Controls Controls Controls Controls

reduce your risk profile based on quantitative data Framework Assessment Improvement Execution Validation

(Risk). Information Systems

zz The support and design of performance processes
Knowledge, Awareness & Education
based on accurate data supporting evidence that
you are in control to achieve the enterprise goals
(Governance). Figure 2.5 Logica GRC Framework

zz The registration and presentation of data evidence

and justification in support of operational and legal
compliance requirements (Compliance). The framework for Governance, Risk and Compliance,
zz The registration and presentation of evidence as shown in figure 2.5, provides an organisation
supporting that the risk mitigation controls that have with a structured approach for Risk and Compliance
been implemented exist and work. management trough the complete lifecycle, from definition
to validation.
However, while BI exactly tells where you are and where
your were coming from, it does not tell you the direction
to follow, the rules or legislation to comply to and the risks
to address. To be successful in achieving the governance,
risk and compliance objectives in an organisation a
comprehensive framework is needed that enforces:
 Compliance Case

The Challenge The Results

Major Bank needs to improve the management of both operational and credit risk across its global Major Bank achieved its objectives, including the
operations. The company requires information to create and validate group-wide risk rating models so it most important objective of being able to comply
could improve business performance and, more importantly, ensure compliance with the requirements of with Basel II in time, which had been a major
Basel II, in order to demonstrate that its systems are secure and resilient. concern for some time.

2.4 Extract more value from customer interactions

Customer Value Stakeholders

Chief Marketing Officer Needs to reduce churn and maximise market share. Needs a coherent pricing strategy, including bundles, offers,
margin maximisation etc.

Head of Customer Service Wants a single view of customer interaction. Needs to change from being a cost centre to a profit centre.

CEO, BU Director Has to increase revenue and profit. Needs visible, trusted immediate information for decision making.

With the increasing mobility of customers to choose their
suppliers, knowledge of customer needs is critical to
retain customers, to attract new customers, or to offer
other products to existing customers. Therefore, from a
marketing and sales perspective it is essential to offer
the right product at the right moment. The customer’s
behaviour is recorded within applications for CRM and
call-centre processes. Business Intelligence offers
solutions for marketing and sales organisations to analyse
their customer behaviour.
Predicting customer product preferences and purchasing
habits - and crafting the most relevant marketing
messages around this information - requires a carefully
orchestrated mix of business acumen and an analytical
framework that supports fact-based decision making.
Without an analytical structure in place, even an
experienced analyst will have difficulty manually analysing
all of the complex information they may be collecting
on customers. And, while still a powerful resource, an
operational Customer Relationship Management (CRM)
system alone will be unable to provide the deeper
customer understanding required to add value to every
interaction with each customer. Predictive Analytics is a
general term, which describes a number of techniques
used to identify pieces of information or decision-making

Business value of BI
25
26
in data. A common misconception is that it always involves
huge amounts of data through intelligent technologies
to find patterns and give magical solutions to business
problems. This is not true. Instead a predictive model
is generated following a highly interactive and iterative
process, based on CRISP-DM, as shown in figure 2.6.
Business expertise must be used jointly with advanced
technologies to identify underlying relationships and
features in the data.
A seemingly useless pattern in data discovered through
data mining can often be transformed into a valuable piece
of actionable information using business experience and
expertise.
Business
Understanding
Data
Understanding
Data
Preparation
Deployment
Data
Modelling
Evaluation
Figure 2.6 Predictive model generation (The CRISP DM Model)
The ability of a predictive model to measure, predict and
optimise customer relationships is directly proportional
to the degree of information an organisation provides to
its data mining process. Ideally, there is an aim towards a
360° view of customers. A sound analytical infrastructure
allows for the gathering of all the relevant information
about customers, as well as the organisation of it in a
consistent manner. In this way, a 360° view of customers
is achieved, which then forms the basis for wide-ranging
analytical methods that aid in the measurement and
building of truly interactive, profitable propensity models.
Once developed, predictive models can be used in
conjunction with other models or business rules to
accurately predict customer behaviour. The real skill is
to find the best predictive model, and its corresponding
predictors, for a particular business problem. This is
difficult since there are so many options, algorithms,
formulas, rules and weights you can apply to determine
precisely how best to combine predictor variables. To
make sense of large volumes of data and how best to
model them, several Data Mining products have been
developed.
More detail on the specifics of data- and text mining is
given in section 7.6 on best practices in data- and text
mining.
These products use customer data to build specialised
predictive models to solve business problems, such as:
zz How can we reduce churn.
zz How can we increase customer profitability.
zz Which customers will default on their payments.
The modelling process learns from the organisation’s
collective experience by leveraging customer habits,
behaviour and demographics.
The knowledge gained is encoded in the predictive model impact on customer profitability, we can help organisations
itself. We have seen this approach of Predictive Analytics meet and exceed their Key Performance Indicators (KPI’s)
work successfully in many areas, such as: around improving the value of their customer base.

zz Predicting bad debt customers for a leading mobile

operator, as shown in figure 2.7. 100
Gain with
zz Deploying officers on threat assessments to prevent 90
Predictive
crime. 80 Modelling

zz Predicting which underground network of pipes is 70

likely to fail for a utilities company. 60

Normal
Gain

%Gain
50

Satisfying customers in today’s highly competitive global 40

marketplace has never been more challenging. Having 30

a deeper insight into customer expectations and future 20
behaviours is the key to successful marketing campaigns. 10
Predictive Analytical techniques to enable businesses to
0
understand the key factors that drive customer value and
loyalty, and attract more customers. As we measure and 0 10 20 30 40 50 60 70 80 90 100

Percentile
monitor the effects of marketing campaigns in light of the Figure 2.7 Predicting bad debt customers

Customer Value Case

The Challenge The Results

A mobile operator made a significant annual investment in 40 general
marketing campaigns. These failed either to reverse the decline in average
revenue per user (ARPU), or reduce customer churn, which was running at
48% for pre-pay and 26% for post-pay. The operator had a data warehouse
containing 12 months’ off call detail records (CDRs) and billing data, but was
unable to analyse this or develop strategies to improve performance.
Using predictive analytical models to offer the most appropriate product to
each caller, our customer has been able to convert a customer service centre
into a highly successful inbound sales channel. As a result, in just 6 months the
operator achieved a double-digit reduction in percentage churn and generated
additional revenues of €1.3 million. The operator now runs more than 200
highly targeted campaigns a year to stimulate usage and sell specific bundles.
Return on investment in marketing campaigns exceeds the best previous
results by over 230%. The new solution continues to identify further innovative
offerings to improve customer retention and to stimulate revenue growth.

Business value of BI
27
28

2.5 Track performance and align metrics across the organisation

Track Performance Stakeholders

CxO Needs visibility of management information. Wants to implement closed loop processes for managing corporate performance.

CEO Needs information to measure against KPI’s. Wants to improve stakeholder information.

CIO Needs the flexibility to deliver a continually changing set of performance information to the enterprise.

Corporate Performance Management is a strategic Performance management certainly requires more than an
management approach aimed at structurally X-raying an IT-tool for the presentation of Key Performance Indicators.
organisation on all levels relative to the specified objectives CPM should be based on an unambiguous definition of
and budgets. Examples of performance management the essential motivation of an organisation. Therefore the
methodologies are the Balanced Scorecard, INK-model, organisational decision making process must be
and Activity Based Costing. In the text-box below the defined at the following levels:
more formal definition of CPM is given by the founders of
the Balanced Score Card, Kaplan and Norton. zz The mission and vision statements lead to business
goals and a strategy. Critical Success Factors (CSF)
define the prerequisites to reach the goals. The
Definition of CPM… strategy states how the goals should be reached.
‘….provides managers with a zz The business goals and imposed strategy lead
comprehensive framework that translates to objectives and a policy (business plan). Key
a company’s vision and strategy into a Performance Indicators (KPI) define how the objectives
coherent set of performance measures.’ will be measured. The imposed policy will be stated
(Source: Kaplan and Norton) with business rules.

Decision making process level Essential Motivation Implementation in organisation

Strategic level Business goals and strategy CSF’s

Policy level Business objectives and policy KPI’s

IT level Business rules logic Score cards and Dashboards

Table 2.1 Decision making levels

zz Within the BI environment the KPI’s will be presented
by scorecards, dashboards, etc. Business rules may
be enforced by logic in the operational systems (for
example to provide signals to end users) but may also
be applied within the BI environment (for example to
monitor if business rules are applied as required).
The table shows that when CPM is limited to a dashboard,
several critical steps have been missed, resulting in
different views within the organisation. Some examples of
this lack of alignment within an organisation are given in
figure 2.8.
A well-structured approach covering organisational,
functional and technological aspects, is required to make
any performance management initiative successful. To be
successful also for the long term, the exploitation aspects
cannot be neglected as well. Working along balanced
scorecard perspectives provides a structure that assures
alignment between various perspectives.
Corporate Performance Management using Business
Intelligence support requires a strong link to the goals &
strategy and objectives & policy. To perform managerial
activities information and standards are required that
provides insight in just those goals and objectives. The
strategy and policy must be translated into business rules.
Business rules control business scenarios and must also
be monitored to check if the business is running according
to the imposed strategy and policy.

Lack of direction Conflicting targets Wrong targets Lack of buy-in

The organisation Different parts of the The organisation Management has a
lacks a vision of organisation interpret moves together in a common vision and
where it is going; the vision and direction that does strategy but has not
everyone does strategy in different not create value for been able to
what they ways; consequently owners, customers communicate it to the
consider best resulting in different nor employees rest of the organisation
set targets

Figure 2.8 Lack of alignment on vision, mission and strategy

Business value of BI
29
30

Identifying the relevant Critical Success Factors (CSF)
and defining accurate Key Performance Indicators (KPI’s)
is a real challenge. When completed, key processes and
activities with the highest business value, i.e. highest
impact on the KPI, should be identified and prioritised. It is
also important to have a satisfactory mix between leading
and lagging indicators that reflects both the historical
results and the upcoming trends and forecasts in different
activities and processes.
For each key process, activity or initiative the decision
points have to be analysed to identify the measures
relevant to the decision. This analysis results in a clear
set of required business information. Finally, the relevant
sources of information requirements are analysed with
regards to availability, completeness and quality.
All steps in the pyramid, as shown in figure 2.9, need
aligned execution to ensure the effectiveness of the
performance management initiative.
Effective measurement, monitoring and analysis of key
performance indicators is critical to support performance
management processes in an organisation. The CPM
approach results in a comprehensive pyramid from
strategy to operational goals and gives a clear picture
of the alignment between strategy and the accumulated
business information where Business Intelligence can
support the continuous measuring, monitoring and
analysis of the performance indicators at all levels.

Vision

Strategy

Critical Sources
Factors
Key Performance Indicators
Finance Customer Internal Learning
performance knowledge processes & growth

Scorecards/Dashboards
Analysis & Reporting

Data Warehouse

GL Order Purchase Production Payroll Market Claims

Figure 2.9 BI and CPM alignment

 Track Performance Case
The Challenge
A major passenger rail operator was constantly struggling with weak financial
performance. Management had a need for consistent information in general,
and to define a set of information that could be used for steering the company’s
strategy. The company was also concerned that the information currently
available was not supporting the developing organisation. Management data
was on different systems and the process of capturing the information needed
streamlining.
Business value of BI
The Results
The project has supported this major passenger rail operator drive for unified
corporate performance management and has rationalised the management
decision process. The company is prosperous and the days of weak financial
performance are over. The organisation now has effective decision-support
information at all levels. Staff use the KPI’s to control and comment on their
area’s performance on a monthly basis, and do so directly in the application,
rather than on separate reports. Management uses the application in its
meetings. and documents decisions in the application, avoiding parallel
reporting mechanisms and reducing the management overhead.
31
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34
3 Business Intelligence definition
A good Business Intelligence solution delivers the right
information at the right time, in the right format to the right
person. Improvement of business decisions determines
the value of the delivered information. A lot of different
definitions of Business Intelligence are present in the
marketplace. Some of these are presented in the textbox
below. Based on the background of the sources for the
definitions they are either IT-related, or data related or
business value related.
‘Business Intelligence (BI) concerns
transformation of operational data into
decision relevant knowledge’
(Source: Meta Group)
‘Business Intelligence (BI) provides
perspective and insight, based on the
access to and analysis of quantitative
data sources’
(Source: Gartner)
‘If you can’t measure it, you can’t manage it’
(Source: CEO General Electric)
The IT marketplace has acknowledged the value of
Business Intelligence for some time now. Many products,
services and solutions are offered. Nearly all of them
claim to have the tailor-made solution to support specific
business issues. In our opinion these all may be valuable
products and propositions, but only when utilised for
the right reasons and as part of a business driven
methodology. In general Business Intelligence supports
reporting, analysing and modelling of your business
aligned with its goals and objectives:
zz Reporting capabilities enable the business to monitor
its performance.
zz Analytical capabilities enables the business to identify
opportunities and determine the reasons for bad or
good performance.
zz Modelling capabilities enables the business to predict
performance by simulating business rules.
Some might argue that a definition is just a formality and
does not add that much value. We feel, however, that a
clear definition of Business Intelligence is important to
prevent misunderstandings between business users, IT
departments, system integrators and software vendors.
A clear definition is especially important for Business
Intelligence due to the close relationships with a lot of
other disciplines like Customer Relationship Management
(CRM), Corporate Performance Management (CPM) and
Enterprise Content Management (ECM). Our definition of
BI, as shown below, covers the common understanding
of Business Intelligence in the marketplace and enables us
to clearly scope a Business Intelligence initiative.
 Delivering and managing information
for monitoring and management of an
organisation and its business processes.
Key components in this information delivery
process are:
- Using structured data from multiple
sources.
- Transformation from transactional data to
management information.
- Creating a historical view.
(Source: Logica)
Based on the gained knowledge of what BI encompasses
we should investigate the added value of BI at different
levels in an organisation. The table below presents on
overview of the characteristics of BI at the operational,
tactical and strategic level.
Depending on the level within the organisation where
we want to utilise BI we have to consider different
requirements for our Bi initiatives. The next sections
describe the foundation for Business Intelligence and
the relationship between Business Intelligence and other
subject areas, to understand more about the positioning
of Business Intelligence in an organisation.

Strategic BI Tactical BI Operational BI

Business focus Develop long-term business goals Manage tactical initiatives to Manage and monitor daily
achieve business goals business operations

Primary users Executives and Business analysts Business analysts and LOB managers Front-line employees and
and LOB managers operational managers

Time frame Months to years Days to weeks to months Intra-day

Data Historical and projected data Historical data Real-time, low-latency and
historical data

Table 3.1 Levels of BI usage

Business Intelligence definition

35
36

3.1 BI Foundation
There are two critical success factors in almost any BI
Executive
initiative. The first is consistency of information and the

Traceable & Auditable Information

Operations Sales Finance Marketing
Management
second is traceability of information. These are critical
Transformation, Integration, Aggregation
success factors because:
Direct
Divisional Retail Wholesale Channel International
Management Division Division Division Division
zz Regulating authorities demand traceability and
Transformation, Integration, Aggregation
consistency of risk and finance reporting.
zz Usually information is provided to several organisations Operational Client
Services
Product X
Services
Product Y
Services
Product Z
Services
Management
(either internally or externally) and inconsistency would
Information Consistency
bring acceptance at risk.
zz Business decisions are based on information; imagine
that your bonus is determined by the HR performance Figure 3.1 Challenges for BI

system supported by a BI solution.

Figure 3.1 defines a generic reporting structure as seen in
many companies. Data is administered in various back-
office systems, often proprietary software, supporting
the operational processes. Service centres run the daily
operations and use the back-office systems to run the
business. Performance of the service centres and the
business processes they run is reported on various levels
and with various orientations. Reporting is based on
legal entities, commercial labels, internal organisational
structure and location. On the highest level of the
organisation the measures must add up and still provide
a consistent and traceable view of the performance of the
company as a whole.
A BI solution is usually deployed to support such reporting
and analysis needs of an organisation. A BI solution brings
together data from different source systems. Therefore BI
solutions often reveal inconsistencies in the back-office
data stores. This is because data passes multiple levels of
enrichment and aggregation. Enriching and aggregating
data to support the different control levels within an
organisation should not lead to a lack of traceability of
information. The degree in which the developed BI solution
resolves these issues is key to the success of the overall
BI initiative.
Key in achieving accountable, consistent and traceable
information in a Business Intelligence solution is the
presence of data management processes. Business data
definitions, data quality measurements, data ownership
and data governance processes should already be part
of any organisation. In many cases the first iterations of a
Business Intelligence initiative still fail due to lack of these
capabilities.
The BI foundation model as shown in figure 3.2, defines
the prerequisites for a successful BI initiative and relates
the various subjects in the overall flow from enterprise data
and content to valuable information.
To support a successful BI initiative we primarily need a
solid BI foundation. Data Management, including data
modelling, data quality and data governance capabilities,
is required to understand the definition and value of
data. Data Integration, including Data Warehousing,
Data Migration and Content Management, is required
to process data into actionable information. Business
Intelligence, including Business Reporting, Business

Foundation for Business Intelligence

Data Data Business Business

Management Integration Intelligence Drivers

Business
Reporting
Data Data Ware Business
Modeling Housing Reporting

Corporate
Enterprise Governance
data & Data Data Business
Content Quality Migration Analytics

Customer
Intimacy
Data Content Business
Governance Management Modeling

Product
Leadership

Process your data Measure and

Understand and Use actionable
to actionable improve your
value your data information to...
information Business

Figure 3.2 Business Intelligence foundation

Business Intelligence definition

37
38
Analytics and Business Modelling, is then applied to
measure and improve business performance.
The first increments of a BI initiative establishes the BI
foundation, which forms the bases for producing valuable
BI products for our business users. To ensure timely
delivery of business value an incremental approach
3.2 Related Disciplines
There are many disciplines in the market related to
Business Intelligence The most closely related disciplines
to BI are listed below to give an understanding of that
discipline and its relationship with BI:
zz Corporate Performance Management;
CPM is a management method that structures and
measures business strategy through indicators and
scorecards. The Balanced Scorecard is a well-known
example of the implementation of this method,
others are Activity Based Costing and the Enterprise
Value Management methodology of Logica. All of
these performance management initiatives require
supporting BI solutions to deliver the necessary
information. In general Business Intelligence provides
the techniques for collecting and presenting the
measures needed to populate the performance
indicators.
towards creation of the BI foundation is critical. We do
not need a fully detailed corporate data model to start
building information products for our business users.
Within the scope of the BI initiative and the information
products needed, we however have to pay sufficient
attention to data management and integration aspects to
be successful in the long run.
zz Enterprise Data or Information Lifecycle Management;
This discipline places the emphasis on the physical
storage of data. Supported concepts in this domain
are on data storage, data security, and data
encryption. The discipline focuses on optimisation and
control of the storage capacity and continuity. Like any
other ICT system, the BI solution can make use of the
facilities provided in this area.
zz Customer Relationship Management;
CRM focuses on supporting a customer centric
organisation. Solutions in this area support
organisations with all customer-related processes for
both operational and analytical purposes. Business
Intelligence can be a component of the total CRM
implementation. The Business Intelligence component
provides an integrated view of the customer and
supports the marketing and sales processes with
analytical customer information.
zz Enterprise Content Management;
ECM focuses on effective creation and usage of
information in an organisation. The definition of
information in the ECM context is not limited to
structured data, but also include less structured
data like documents, mail and website content.
ECM capabilities support collaboration within teams,
deployment of enterprise search mechanisms and
effective management of workflows. Currently BI and
ECM are often treated as separate disciplines; however
there are many similarities and technology is merging
already. More detail on the merging of technologies in
these areas is given in section 7.6 on best practices in
data- and text mining.
zz Enterprise Application Integration;
EAI focuses on integrating operational applications
to support an integrated front-end for employees,
customers and suppliers. Techniques that are used
are real-time and online exchange of data, commonly
message-based. Another frequently used technology
is the implementation of an Enterprise Service Bus
(ESB) or Service Oriented Architecture (SOA).
zz Master Data Management;
The objective of MDM is to specify clear definitions
of core data elements and manage the value of
data within an organisation. This is an important
prerequisite for a successful Business Intelligence
initiative, but not a specific BI problem.
Business Intelligence definition
zz Data Quality or Information Quality;
The objective of Data Quality management is to
monitor, manage and continuously improve data
quality across an organisation. This is also an
important prerequisite for a successful Business
Intelligence initiative, but not a specific BI problem.
Chapter 9 gives more insight on Data Quality. More
detail on data quality is presented in section 7.3 on
best practices in data quality.
zz Data Migration;
Frequently, when a new system is implemented,
the data from the old system has to be migrated
to the new system in a controlled manner. The
transformations and controls executed during such
data migrations often exhibit a high degree of similarity
to the data integration component of Business
Intelligence solutions. In the case of data migration the
number of process iterations is limited. In the case of
Business Intelligence it is an ongoing process in order
to build an historical perspective.
39
40

3.3 Creating value with BI

In the previous sections the added value, the definition and
the foundation of Business Intelligence are defined. These
components do not create value spontaneously. That is
why we must also consider Business Intelligence as an
integrated value creation process, a process that brings
together the company’s strategy, the construction of the BI
solution and applying the resulting BI products. Figure 3.3
shows the BI value creation process, consisting of three
interrelated loops for managing strategy, construction and
consumption.
In the strategy cycle the objectives and related critical
success factors (CSF) are determined. Based on this the
strategy of the organisation is articulated. In many cases
it is not feasible to implement a BI solution to support the
whole strategy of a company at once. Usually a phased
approach is taken based on prioritisation of the business
objectives.
Based on business objectives and defined business
requirements the construction cycle starts. Business

2.
Articulate
strategy

1.
Analyse 3.
Objectives
Strategy Prioritise
& CSF

4.
5. Balance
Define 9.
KPI’s
Functional Discover
scope & Explore
10.
Access,
6. Monitor &
Identify Effect analyse
Data & change
sources
Construct Consume

11.
8. develop
7. 12. Decision
Develop
Evaluate Share & alternatives
Implement
& select collaborate
Train
tools

Figure 3.3 Value creation with BI

requirements are detailed into functional specifications and
scope. A very important step, specifically in a BI solution,
is to understand the availability of data to support the
information requirements. Tools necessary to develop and
manage the BI solution are selected, and aligned with the
business requirements and the IT architecture. Last step in
the construction cycle is the development and deployment
of the BI solution, including testing, implementation and
training.
In the consumption cycle business analysts start
discovering and exploring information presented in the
BI solution. Often they will adjust and configure the
information flow to the real business users, to make sure
the right information is delivered to the right person, in the
right format, at the right time. Delivered information is used
to support decision making in the business departments
of an organisation and is shared to support collaboration.
Each iteration through the complete model should effect
positive change by adding value. As mentioned, this is
not a single project. Any successful BI initiative creates
more demands from the information users to manage their
business even better. Based on the value creation model a
continuous improvement process is started and managed,
adding value step-by-step.
bottlenecks, rather than better supporting the business
goals. A structured lifecycle management of Business
Intelligence, like the Logica BI Framework, enables you to
prevent these issues from happening.
Many organisations already have multiple BI solutions in
place. This process model is equipped to handle this, and
it supports organisations in rationalising and consolidating
their current BI solutions before even starting new ones.
Applying the different process steps to assess the current
BI landscape of an organisation provides an opportunity
to measure current maturity and alignment with business
objectives. Based on this assessment a BI roadmap can
be formulated to reduce the Total Cost of Ownership (TCO)
of the current BI landscape and create more business
value.

In addition to the obligatory project management activities

BI Management also concerns the lifecycle management
of the BI solution on the long term. A structured growth
of BI in an organisation is crucial as otherwise sub-
optimisation will introduce bottlenecks resulting in an
unreliable and inefficient BI solution. Once bottlenecks
exist any upcoming changes are justified for resolving

Business Intelligence definition

41
42

3.4 Maturity models

Nowadays, Business Intelligence is available in various
forms and sizes. To balance the investment in BI with the
added value of BI it is very important to understand the
maturity of an organisation on technological, process and
organisational aspects of Business Intelligence. Maturity
can be measured from two perspectives:
zz Inside-out
Assessing current BI technology, process and
organisation. The focus in this perspective is on
the available BI solutions, how they are developed,
deployed and used, and benchmarking them against
maturity of the marketplace as a whole.

zz Outside-in
Measuring the perception of Business Intelligence by the
organisation. The focus in this perspective is how the
various participants in BI experience their BI solution.
In this section an outside-in maturity model is introduced
first, based on the BI maturity model of The Data
Warehouse Institute (TDWI). Next an inside-out maturity
model is introduced.

Prenatal Infant Child Teenager Adult Sage

Executive Cost Inform Empower Monitor Drive the Drive the

Perception Centre Executives Workers Processes business Market

Information IT Self Customised The BI

Culture Backlog Service Delivery Utility

Analytics Awareness Under- Actionable Decision

Culture standing Information Automation

value

Cost

Enterprise
Management Spreadmart data Marts Data data Analytical
Architecture Reporting Warehouses warehouseing Services

Figure 3.4 Maturity model (source: TDWI)

The diagram in figure 3.4 illustrates evolution through zz Architecture;
six stages of BI maturity, from infancy (traditional Is Business Intelligence supported with a traditional
management reporting and spreadsheets) to adulthood management reporting platform and spread marts
(enterprise data warehousing and analytic services). This or is an Enterprise Data Warehouse with Analytical
model provides useful context to BI maturity assessments Services available.
because it aligns closely with many of the BI success
factors, as perceived by business users. This maturity model enables measurement of current
maturity of Business Intelligence. In the outcome an
The important aspects to consider when assessing the BI imbalance often occurs between the different aspects
maturity in this model are: of maturity. It is very important to start balancing all the
zz E xecutive Perception; aspects to one level of maturity first and then start growing
How does your executive management perceive to the next level of maturity. Another way of looking into
Business Intelligence? Is BI just another cost centre maturity of BI is to assess the added value in terms of
in your organisation or does BI drive your business or types of delivered information products, as shown in
even the market in which your organisation operates. figure 3.5.
zz Information Culture;
Are decision makers assessing and applying the
information products as it is meant to be or are they
creating (unmanaged) shadow solutions?
zz Analytics Culture;
How well is Business Intelligence adopted by the
knowledge workers in your organisation? Are they
hardly aware of the existence of Business Intelligence
or is it part of their day-to-day decision preparation
processes.
zz Cost and Value (TCO);
Does your investment in Business Intelligence pay
off? Very important in answering this question is
to also include the time knowledge workers spend
on analysing the information delivered by BI. Is this
time spent on improving business with the received
information or is this time spent on checking
consistency and quality of the delivered data.

Business Intelligence definition

43
44

Business Intelligence: Enterprise Value Management:

• ‘Measure’ the Business • ‘Manage’ the Business
• Gain advantage through understanding • Accurately predict & drive the future

PREDICTIVE
MODELS
CAUSE
VALUE

EFFECT Action
Understand why
Plan the changes ‘What if...’
Understand what happened SCORECARD

Publish consistent facts

MINING Align the business
Gather the facts
OLAP
REPORT
DATA

CAPABILITY / MATURITY
DATA: Data Extract Transform Load • Data Ouality Improvement • Data Warehouse/Mart
Figure 3.5 REPORT:
BI MaturityAutomated
by Logica Standard Reporting • Automated Alerting

OLAP: Ad-Hoc Query • Guided Train of Thought Analysis

DATA MINING: Segmentation • Clustering • Analysis
SCORERCARD: KPI Definition • Balanced Scorecard • Executive Dashboard
In this model
CAUSEthe maturity
EFFECT: and Modelling
Systemic corresponding value
• Scenario is
Projections zz Mining;
measured based on
PREDICTIVE stages Cross-Sell/Up-Sell
MODELS: in delivering information Understanding
Models • Fraud/Revenue Protection why certain
Models • Acquisition things/events
Models happen
• Loyalty/Churn by
Models

products: applying data mining capabilities like segmentation,

clustering and analysis.
zz Data; zz Scorecard;
Gathering facts by deploying data extract, transform Aligning the business by applying scorecard
and load processes, data quality improvement capabilities like KPI definition, balanced scorecard and
processes and data warehouse/mart modelling. executive dashboards.
zz Report; zz Cause Effect;
Publishing consistent facts by deploying automated Plan business changes by applying cause and effect
standard reporting and alerting. analysis like scenario’s and projections.
zz OLAP:
Understanding what happened by ad hoc query and
guided analysis capabilities.
zz Predictive Models;
Generate actionable business information by applying
predictive models like cross-sell/up-sell models, fraud/
revenue protection models, acquisition models and
loyalty/churn models.

Both of the discussed maturity models are powerful tools

to assess current BI maturity and define the next steps in
improving.

Business Intelligence definition

45
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48

4 Managing BI
Due to the specific nature of BI initiatives a closer look to
the project management and organisational aspects is
required. In most organisations various BI applications
and initiatives already exist. The challenge is bringing
those initiatives together in an integrated BI programme,
identifying additional business value or ways to reduce
the Total Cost of Ownership of Business Intelligence.
According to recent research in the marketplace the cost
of BI is going up whereas the benefits of BI are not always
that obvious.

Business Intelligence spending amounts

from 11 to 15 percent of IT costs and grows
around 6 percent annually.
(Source: Gartner)

This is exactly why we start this section by focusing on

cost effective management of Business Intelligence. Cost
effective BI management and organisational alignment are
key in achieving sustainable return on BI investments.
4.1 Cost Effective Management of BI
Business Intelligence initiatives often start at departmental
level in an organisation, based on a specific business
case. Organisations often develop ad-hoc solutions
to BI and implement different applications across the
organisation, with additional staff being required to
consolidate the information.
Over the years these BI solutions are connected to
support information needs at a higher level, and become
more and more dependent on each other. Maintaining
and changing these organically linked BI solutions is a
tedious and expensive process. Business Intelligence over
the years has evolved from functional area applications
to enterprise applications with a fast growing number of
users and business requirements. Demands for reports,
dashboards, scorecards and decision support is growing.
Organisations now face the challenge of effectively
reducing BI costs without compromising the quality of
service they deliver to users. Organisations therefore need
to have an agreed and documented Business Intelligence
and Performance Management strategy to deliver
real business value from BI technology investments.
A silo based technology or opportunistic approach
leads to inconsistent results, inflexible applications and
infrastructure. As a result the Total Cost of Ownership
will increase. That is why we need to consider a more
structured approach to manage BI initiatives, to lower the
Total Cost of Ownership and to improve time-to-market of
BI solutions.
Managing BI
Reversing the current process of creating ad-hoc BI
solutions in the organisation starts with understanding the
current situation by auditing the current TCO of BI:
zz Define the current cost of the overall BI environment
and assess the potential of cost reduction.
zz Benchmark BI cost with industries best standards and
estimate potential of cost reduction.
zz BI cost analysis and overview of cost reduction
opportunities.
Based on the results of the TCO audit a business case can
be compiled to start building a cost reduction roadmap,
identifying clear cost benefits for the short-, mid- and long
term by:
zz Assessing the benefit of selected cost reduction
opportunities.
zz Reviewing the list of candidate cost reduction
opportunities.
zz Assessing opportunities in terms of cost, time, risk and
benefits.
zz Building an opportunity matrix.
zz Designing the cost reduction roadmap.
zz Designing the associated transformation roadmap.
Based on our knowledge and experience in the BI
marketplace we identified a lot of opportunities to reduce
cost in BI environments, as shown in figure 4.1
49
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Probably not all of the plotted opportunities will be

BI Conte
nts Ra
ti onali
s ation appropriate to implement in all organisations. Analysing
Pro
ce
the possible benefits of these opportunities for your
sse
sa
nd
Or
organisation is still valuable. In the tables below the typical
ga
Common
n isa
tio
opportunities are defined for the categories:
Language Master Data n
BI
Management zz BI content rationalisation;

O
Competence

pt
Center

im
as
zz infrastructure rationalisation;

a
tio
Data Quality Off

n
Improvement Shore
BI Application
Maintenance Service
zz processes and organisation optimisation.

Infr
ast
BI Service

ruc
Simplified Center
For all categories the cost- and other benefits are given,

ture
reporting

Ratio
Optimisation of BI
Project portfolio
Virtualisation BI as a together with the expected timelines to reach them.

nalisa
Service
BI
Framework

t io n
Assessment BI Platform
of rationalisation
BI TCO
3 months 6 months 12 months 24 months

Figure 4.1 Cost reduction roadmap (illustration)

4.1.1 BI content rationalisation

Opportunity Description Cost Benefits Other Benefits Timeline

Simplified reporting Review the pipeline of existing reports and delete Run cost Report consistency 3 to 6 months
the ones that either are no longer used or can be Maintenance cost
replaced with other existing reports

Common Language Enable a shared definition of KPI’s across the Design and build cost Consistency of KPI’s 6 to 12 months
organisation. It involves reviewing all existing Maintenance cost Cross-functional
KPI’s and dimensions, then finding a company- Administration cost data analysis
wide common ground. Reduce delivery time

Data Quality Improvement Asses main characteristics of data sources and Build cost Information quality 6 to 12 months
cleansing opportunities to meet BI expectations, Maintenance cost
then clean data.

Master Data Management Processes and tools to manage master data Design and build cost Information consistency 12 to 24 months
across the organisation. Maintenance cost

Table 4.1 Content rationalisation oppertunities

4.1.2 Infrastructure rationalisation

Opportunity Description Cost Benefits Other Benefits Timeline

BI platform rationalisation Reduce the number of BI software providers License cost Improved traceability 3 to 12 months
and invest on the BI platform that covers the Maintenance fees and audit-ability
widest range of business requirements Training cost
Run cost

Virtualisation Run multiple software stacks on the Hardware cost Improved maintenance 6 to 12 months
same hardware

BI as a service Plan and organise the rent of BI platform and Software cost Replace fixed- with 12 to 24 months
services (hardware and software) from a BI Hardware cost variable cost
service provider. In this case the organisation no Build cost
longer owns its BI platform, but pays BI services Run cost
as it uses those services

Table 4.2 Infrastructure rationalisation oppertunities

4.1.3 Processes and organisation optimisation

Opportunity Description Cost Benefits Other Benefits Timeline

BI Framework Structured methodology and approach Design and build cost Increase BI maturity 3 to 6 months
to BI solution engineering

Optimisation of BI Portfolio Review of scope of pending BI projects in Design and build cost Improve 3 to 6 months
order to define the best path to meet business Run cost time-to-market
requirements while reducing development and
delivery cost.

BI Application BI maintenance based on clear service level Maintenance cost Predictable service levels 6 to 12 months
Management Service agreements, leveraging blended deliver models
(near- and offshore)

BI Service Centre Consolidate BI applications development External cost Quality of service 6 to 12 months
providers as a mean to reduce external cost Improve the management
and improve quality of service. of providers

BI Competence Center Centralised BI organisation that defines Design and build cost Quality of service 12 to 24 months
and implements best practices and manages Maintenance cost Operational excellence
company-wide BI activities Environment cost

Table 4.3 Process and organisation rationalisation oppertunities

Managing BI
51
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4.2 BI Competence Center (BI CC)

For proper management and maintenance of a BI solution
• Audit services to measure and
it is important that
improve the right
quality disciplines are available.
of BI organisation
processes and technoligy Business Skills
In many organizations we notice a consolidation of
Business needs
disciplines inBIthe
• Full field
Life of support
cycle business
by intelligence, data Organisation
and processes
standardised
warehousing methodology
and information integration. The following
skills are required to effectivly run a BI Competence Center Control Define BI
• Governance structure to ensure funding vision
Establish Manage
(BI CC): business value driven mindset standards programmes
BI CC
Build technology Develop
• Benchmark and estimating
• Business
blueprint user skills
skillsto support reliable
framework
Organise
methodology leadership
planning
To compile and
the budgeting
business of BIfor any activity in the BI
case
Tools and applications Business needs
CC. To specify and prioritise the information needs of Tools, apps Statistical ans
BI CC at large Insurance Company Data management process skills
the business. To manage
raised customer and align
satisfaction thebyorganisation
by 24% IT Skills Analytic Skills
implementing
and processes. the Logica
manage BI Framework
scope changes signalled by
maintenance organisation and project team. Initiate
business analysis, reviews and feasibility study. Figure 4.2 BI Competence Center

• Analytic skills
To design the BI solution based on the information
needs. Design and develop analytical applications to
support the business. Perform analytical processing of
the availble information in the BI solution.
• IT Skills
To develop and maintain the BI system, aligned
with the IT architecture and infrastructure of the
organisation.
Working together as one BI community, either virtually or
physically implemented in the organisation, is essential to
achieve sustainable added value out of BI investments.
Figure 4.2 presents the required skills combined with the
core activities of a BI CC.
The core activities performed in the BI CC are:
• Define BI vision and strategy
The definition of the BI strategy based on the business
strategy of the organisation. Continuously align the
BI vision with the tactical goals and objectives on all
levels of the organisation.
• Manage programs
Keep track of all BI projects running in the
organisation. Make sure all projects are aligned
to the defined BI strategy and really add value to
the business. Deliver within budget, quality and
time constraints the agreed functionality. Manage
data resources, information delivery and running
environments
• Develop user skills The combination of different skills and capabilities of a BI
Create awareness of the value of BI in the business. CC often introduces a discussion about how to position
Make sure business users use BI solutions as the BI CC in the organisations hierarchy. In many cases
intended, by conducting evaluation and training the BI CC is not positioned in the organisations hierarchy,
sessions on a regular basis. Measure business user but positioned as a long term programme or virtual BI CC.
satisfaction with delivered BI solutions. Table 4.4 presents the advantages and disadvantages of
• Organise methodology leadership positioning a BI CC within the hierarchy of the organisation
Manage the BI methodologies used to develop BI or as a virtual BI CC.
solutions. Align existing best practices in a consistent
framework. Continuously evaluate projects on using
the framework to improve future projects and/or
improve the existing framework.
• Build technology blueprint
Define and establish the required technology blueprint,
based on the BI strategy and the collective set of
requirements of running BI projects. Envision a to-be
architecture and manage projects to move towards
that architecture.
• Establish standards
Standardisation is a key enabler for re-use.
Re-use of existing skills, practices and components.
Harvest developed standards in running BI projects
and leverage future projects with them. The level of
standardisation is also one of the key success factors
in outsourcing of BI development and maintenance.
• Control funding
Position the BI CC as a decision making unit in the
funding process of BI. Of course business will decide
on funding in the end, but BI CC must have a clear say
in what to invest in, and what not. This is essential to
prevent BI initiatives running in the organisation without
alignment with the BI CC.

Managing BI
53
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Organisational Structure Advantages Disadvantages

Virtual BI CC Least disturbing to the current situation Limited accountability

Members stay close to the day-to-day business Unclear communication and alignment between members
Management buy in and support from the individual business
units need to be very high

BI CC in the Roles and responsibilities are clearly defined Political & budgetary constraints
organisation hierarchy Clear reporting lines, BI CC manager
BI CC high visibility in the organization

Table 4.4 Organisational structure of a BI CC

When a BI CC is positioned in the organisations hierarchy most common options are presented in the table below,
we of course still have to decide where to position it. The including their respective advantages and disadvantages.

Managed by Advantages Disadvantages

CEO BI CC operates for the whole organisation Loosely aligned with business user organisation units
Closely aligned with overall business strategy Not on top-of-mind of CEO

CFO Aligned with most demanding user organisation Non financial BI requirements less supported by the
Usually clear and easily funded business cases to support BI CC due to prioritisation issues
Loosely aligned with other organisation units

CIO No bias for specific business organisation units Lack of alignment with business organisation units
Alignment with overall IT strategy, processes and project BI projects lack business orientation
portfolio

Table 4.5 Management of a BI CC

 4.3 BI Delivery models
Blended delivery, combining on-site, on-shore, near-
shore and off-shore capabilities, is commonly used by
organisations to optimise cost control. For Business
Intelligence development and maintenance there are still
some reservations against a blended delivery model. A
large involvement of end users, a high degree of iteration
4.3.1 Iterative approach
Blended delivery, combining on-site, on-shore, near-
shore and off-shore capabilities, is commonly used by
organisations to optimise cost control. For Business
Intelligence development and maintenance there are still
some reservations against a blended delivery model. A
large involvement of end users, a high degree of iteration
and sensitivity of data are used as the core arguments
against blended delivery. Closer examination in the
following section reveals, however, that there are in fact
good opportunities for are more blended approach to the
delivery of BI, enabling an organisation to lower the Total
Cost of Ownership of BI significantly.
zz Standardisation
The Business Intelligence market is starting to
mature. The increasing convergence to a limited set
of standards for architecture, approach and data
modelling. When customer and supplier comply
with such standards beforehand then discussions
in individual projects can be avoided. The transfer of
work becomes more efficient, especially if the supplier
shares these standards with its own offshore parties.
Managing BI
and sensitivity of data are used as the core arguments
against blended delivery. Closer examination in the
following section reveals, however, that there are in fact
good opportunities for are more blended approach to the
delivery of BI, enabling an organisation to lower the TCO of
BI significantly.
zz A nuance of the current practice
A closer examination of the current practice shows
that the iterative nature of Business Intelligence
development only offers an advantage over a small
fraction of the development of the entire architecture,
namely in the design and realisation of reporting and
analysis functionality. With the design and realisation of
source system disclosure and the building of the data
warehouse an iterative approach is more of a burden
than a pleasure. This leads to employing the traditional
waterfall approach. Studying various implementations
has revealed that the initial part of the development
covers, on average, 70% of the total effort.
zz Maturing
of the offshore market
The perception that only simple programming activities
can be delivered offshore is disproven by the current
practice. At the moment, offshore organisations
have highly qualified personnel at their disposal and
processes in place that are often at a higher CMMI
levels than those on-shore.
55
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 MMI
C
The Capability Maturity Model ® Integration
(CMMI ®) provides a comprehensive
approach for process improvement. In
addition to the Maturity Levels the CMMI
also specifies what the achievable goals
are and where and when what priorities
should be placed during the different
stages of maturity. Finally, the CMMI model
offers an extensive support for the design
and realisation of a successful process
improvement programme.

4.3.2 Degree of specification

Due to the high degree of mutual communication, backwards, two steps forward. What at first glance
work is often derived from global specifications that would appear to be an efficient development method has
are sometimes only tightened during the realisation of unknowingly lead to an expensive overall solution in many
Extraction Transformation and Loading (ETL) flows or cases. Regardless of the chosen delivery model more
reports. This is the result of the much praised ruling attention to specifications is needed to achieve sustainable
‘think big, act small’. As a result of this and the pressure cost effective BI solutions. Better specifications lead to
from users, an intermediate product is quickly delivered less redesign and rework in the next increment. When
based on these global specifications. This first increment using better specifications, blended delivery of BI might be
is often incomplete and leads to many questions by the considered to drive costs down even further.
user organisation. Thus, a common survival strategy is
developed in which a lengthy series of increments are
realised. Each increment creates just enough commitment
for the next one. With every subsequent assignment to
realise new functionality in a new increment, beneath
the surface the loose ends from the previous increment
are also repaired according to the principle of one step
4.3.3 Information security
The combination of information in a data warehouse is
used to base tactical and strategic decisions on. This
information is often highly confidential and should not get
into the wrong hands. Having the solution built outside the
boundaries of the organisation is often associated with
making this information available outside the organisation.
The risk of this is deemed too high and unacceptable. In
practice, however, an increasing amount of BI solutions
is developed outside the organisation. Here test data are
used that often closely resemble data from the customer’s
operational environment. There are two measures that can
bring this risk to an acceptable level:
zz By establishing clear rules of conduct and linking
contractual agreements to these rules, the risks can
be reduced to a level comparable to or even safer
than internal development and maintenance. With the
current international regulations, such as SAS-70, in
the field of process control of service organisations,
it is now also possible to make such contractual
agreements at an international level.
zz In the past, the testing of data warehouse solutions
was often performed using sample production data.
When the results sounded appealing to the users it
was quickly concluded that this was good enough.
With the increasing use of data warehouse solutions
for financial reporting and risk analysis this approach
to testing is not sufficient any longer. It is increasingly
common to see controlled test sets and formal test
projects used. Tools and methods also offer remedies
to mask production data in an efficient manner so that
confidentiality is guaranteed and an effective test set
Managing BI
is created. Many IT service providers run data centres
that are very secure. In most cases more secure than
company owned data centres because of regulations.
SAS-70

SAS 70 (Statement on Auditing Standards
No 70) is an internationally recognised
research standard and was developed
by the American Institute of Certified
Public Accountants (AICPA). It is process
focused and examines whether enough
management measures are taken by the
service organisation and also whether they
are effective and respected. As is the case
with the annual financial statement, an
independent auditor or auditors can supply
annual reports on this matter. To be able to
service clients listed on a stock exchange in
the United States it is even a requirement.
An SAS 70 report turns out to be the only
reporting standard that meets the strict
Sarbanes Oxley regulations.
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4.3.4 Technology
With modern technology, most of the basic code is
generated. The products available on the market today
are used by software engineers and knowledge workers
and it is said that the products require no programming
knowledge and experience. This could lead to the
argument that blended delivery is not even necessary
because, in the future IT expertise is no longer required for
the use of these products.
This is, however, the way software manufacturers position
their products in the market. And it is certainly true that
the accessibility and user-friendliness of such products are
considerably better than in the past. Practice has shown
that operating such products is still reserved to IT experts
with a background in programming and data modelling.
Programming is more about structuring than coding.
The added value offered by recent ETL products are
standardised reusable components and the possibility
to create and maintain reusable components yourself.
Examples are standard transformations for the various
types of dimensions in a data warehouse, or standard
connectors for different types of interfaces. It is exactly
this feature that is useful when contemplating offshore
development of ETL components. Each standard building
block ensures clearer specifications in subsequent
projects.

4.3.5 Blended sourcing model

Taking into account the above considerations, blended
delivery of BI is a valuable approach to lower the Total High

Cost of Ownwrship of BI in an organisation. To manage On-site

this step it is important to envision a model and a phased

Onshore
approach on how to grow towards this model, as shown in Complexity/
Risk
figure 4.3. Blended Delivery Model
Offshore

Near Shore
In every stage of a BI initiative an analysis is required to
weigh complexity and required customer interaction. Low

Based on this result the most appropriate delivery Low Customer interaction/ High
intimacy
approach can be applied.
Figure 4.3 Blended delivery model
 4.4 Estimating investment in BI
In general there are two methods of estimating the
necessary investment in BI. The first is top-down
estimating, utilizing industry benchmarks. The second
one is bottom-up estimating, utilizing expert estimation,
supported with collected metrics of previous projects.
Both methods should be applied in the estimation of your
BI initiative. During the first stages of a BI initiative a top-
4.4.1 Top-down estimation
Benchmarking enables you to estimate based on
comparable initiatives. An organisation can do this by
learning from BI initiatives executed elsewhere within the
organisation. A more reliable way is using benchmarks that
are performed independently and use a large sample of
industry peers. Based on our experiences and references
in the Business Intelligence market, we have developed a
benchmark to support our customers. The results of this
benchmark can be used at an early stage to make a global
estimation of the costs, including future maintenance and
management costs. In addition, the results can also be
used to audit the performance of current BI initiatives.
In the development of the BI benchmark many properties
were examined. On closer examination only a few proved
to have a predictive value when tested on the available
data in our project database. The key predictive properties
for the estimation of investment in BI appeared to be:
Managing BI
down approach to estimation is most appropriate. Details
to perform an expert estimate are not available in these
early stages of a BI initiative. When one arrives in the BI
development stages an expert estimate, supported by
metrics, should be applied to verify and detail the earlier
made top-down estimates. Both methods of estimation
are explained in detail in the following sections.
zz Number of user groups;
A user group uses the BI solution for a specific
function and purpose. Each group has its own
perspective on the available data, often accompanied
by its own set of reporting and analysis tools. Within
a financial data warehouse, for example, a distinction
can be made in three user groups: management
accounting, financial accounting and customer
profitability.
zz Number of source systems;
A source system is actually a set of data usually
originating from a single technical system. For
example, when multiple systems conform to a single
interface specification we often consider this to be one
source system. Ad hoc deliveries are counted based
on the interface format and source. Multiple deliveries
using the same format and coming from the same
source are counted once.
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zz Number of subject areas; manner. We measured the following investments, based

A subject area is a defined subset of data from the
overall data warehouse environment that is being used
for a specific purpose.
zz Number of facts;
A fact table is a logical grouping of measurements.
Sometimes it is preferred to physically split the
table based on origin or time span when storing
measurements in fact tables. When making a count
such a solution is still regarded as one fact table.
zz Number of dimensions;
A dimension is a series of measurements viewed
from a certain perspective. For example, product
sales figures per time span, per product group, per
organisational unit, per customer group. As with fact
tables the logical perspectives are counted, despite
any technical solutions that divide them into several
dimension tables.
Most of these properties are normally already known or
can be assumed in the early stages of a BI initiative and
therefore support top-down estimation of a BI investment.
Next to the definition of predictive properties we also
have to measure the investments done in a comparable
on our project databases:
zz Initial project cost;
Investments made in the development stage of the
BI initiative. The initial costs are measured up to the
moment when the data warehouse has been accepted
as a working system by both the users and the
management of the organisation.
zz Annual change cost;
Investments made in the realisation of new functionality
or changing existing functionality within the existing BI
solution.
zz Annual service cost.
Investments made to maintain and manage the
existing BI solution. This covers all activities related
to guaranteeing continuity, stability and availability of
existing functionality.
Based on this research and the continuous population of
our project database with project data we are now able to
support our customers with reliable predictions on their BI
investments at an early stage. The table below shows the
predictive value of the properties against the mentioned
cost categories.

Number of Number of Number of Number of Number of All properties

user groups source systems subject areas facts dimensions known

Initial project cost 70% 80% 73% 65% 79% 91%

Annual change cost 67% 60% 55% 63% 52% 89%

Annual service cost 80% 81% 83% 82% 80% 87%

Table 4.6 Predictive value of benchmark parameters

 If we look at the predictive value for ‘Number of source
systems’ against the ‘Annual service cost’, a maximum
deviation of 19% was found in our project database from
the prediction. Combining multiple predictive values
improves the overall predictive value of this model, as the
last column shows. If all predictive properties are known,
‘Initial project cost’ is predicted with a 91% certainty.
This research also provides predictions on cost ratios in a
BI initiative, like:
zz Required investment in building, testing and
implementing a BI initiative based on known design
investment.
zz Required annual change budget based on known
investment in development.
4.4.2 Bottom-up estimation
Performing an expert estimation is still the most common
practice to determine investments in the development of a
BI solution. An estimate is made with a team composed of
experts that together hold all relevant disciplines and skills
needed in the project. Gathering the right experts is very
important, most faulty estimates are due to missing certain
expertise during the estimation.
When enough details are available, the experts can be
supported by using collected metrics on earlier projects
and by function point analysis.
Managing BI
zz Required annual maintenance budget based on known
investment in development.
These ratios provide a view of the costs in terms of initial
project costs and annual costs and the relationship
between change and service costs. With limited
information these ratios make it possible to define the cost
component of a ROI (Return on Investment) calculation
for a new data warehouse project. Given the aspects
discussed in this section the results from this benchmark
can be used:
zz Audit a running BI project or service organisation.
zz To estimate the costs for a BI initiative in the early
stages based on the defining properties.
Function Point Analysis (FPA) is a well known method, long
used within regular system development projects. Until
recently FPA focused on estimating transaction-oriented
systems development only. The Netherlands Software
Metrics Association (NESMA) recently introduced a
function point analysis methodology specifically equipped
for estimating Business Intelligence projects. However, a
lot of detailed information is still required to conduct a FPA.
Information at the level of a definition study or preferably
a functional design is needed to establish a truly reliable
estimation.
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Collected metrics of performed projects in the past, also

provide very valuable information to perform a bottom-up
estimation. Some important aspects when collecting this
valuable information are:

zz Make sure to collect data based on very clear and

consistent definitions of activities performed and
products delivered. Otherwise you might end up
with incomparable and unreliable metrics for future
estimations.
zz Make sure external influences are accounted for
in the metrics system you use. Organisational or
environmental aspects might have a big impact on the
metrics you have collected. Identifying those influences
and eliminating them in the metrics makes the metrics
better re-usable for future estimation.
zz Identify outliers in your collected metrics and exclude
them from your metrics database. Outliers would
otherwise mess up your metrics and the predictive
value of them.

 The NESMA (Netherlands Software

Metrics Association) is the second
largest Functional Sizing Measurement
Organisation in the world, ISO/EIC
certified. (www.nesma.com)
184

References
Abonyi, J., Feil, B., and Abraham, A. ‘Computational Intelligence in Data Mining’, Informatica, 29, 3-12.

Cios, K. J., Pedrycz, W., Swiniarski, ‘Data Mining, A Knowledge Discovery Approach’, Springer, New York.
R. W., and Kurgan, L. A.

CRISP-DM Cross Industry Standard Process for Data Mining. (www.crisp-dm.org)

Dan Linstedt ‘The Business of Data Vault Modelling’, This book presents the business of next generation data warehousing,
including the Data Vault model and approach or methodology. (www.danlinstedt.com)

Dy, J. G., and Brodley, C. E. ‘Feature Selection for Unsupervised Learning.’, Journal of Machine Learning Research, 5, 845-889

Fayyad, U., Piatetsky-Shapiro, G., ‘From Data Mining to Knowledge Discovery in Databases.’, American Association for Artificial Intelligence.
and Smyth, P.

Gartner Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. (www.gartner.com)

Inmon Bill Inmon, world-renowned expert, speaker and author on data warehousing, is widely recognized as the ‘father of data
warehousing.’ He is creator of the Corporate Information Factory and more recently, creator of the Government Information
Factory. (www.cif.com)

Imhoff Claudia Imhoff, Ph.D., is the President and Founder of Intelligent Solutions, a leading consultancy on data warehousing
and business intelligence technologies and strategies. (www.intelsols.com)

Kaplan and Norton Founders of the balanced score card approach (www.valuebasedmanagement.net)

Kimball Worldwide known innovator, writer, educator, speaker and consultant in the field of data warehousing. He has remained
steadfast in his long-term conviction that data warehouses must be designed to be understandable and fast. His books
on dimensional design techniques have become the all time best sellers in data warehousing. (www.kimballgroup.com)

Mimno Mr. Mimno has accumulated extensive practical experience in identifying mistakes that are commonly made in the
development of data warehousing applications, and assists MMH clients in building successful data warehouses
incrementally.(www.mimno.com)

Miradi, M. ‘Knowledge discovery and pavement performance, data mining’, Wohrmann Print Service, The Netherlands.

Moss Ms. Moss has written a number of books, white papers, and articles on business intelligence, project management,
information asset management, development methodologies, data quality, and organizational realignments. In 1991 she
self-published her first methodology RSDM 2000, Relational System Development Methodology, Volumes I & II. Since
then, she has co-authored the books Data Warehouse Project Management, Impossible Data Warehouse Situations, and
Business Intelligence Roadmap, and Data Strategy

NESMA NESMA (Netherlands Software Metrics Association), the second largest Functional Sizing Measurement Organisation in
the world.(www.nesma.nl)

OVUM At Ovum we fully understand convergence across telecoms, IT services and software. We invest heavily in researching
what is happening in a market that is dynamic and full of risk and reward. We analyse the changes and identify the threats
and opportunities ahead for our clients. (www.ovum.com)

TDWI TDWI (The Data Warehousing Institute™) provides education, training, certification, news, and research for executives
and information technology (IT) professionals worldwide. Founded in 1995, TDWI is the premier educational institute for
business intelligence and data warehousing. (www.tdwi.org)
Treacy and Wiersema Founders of the value discipline model (www.valuebasedmanagement.net)

Zachman John A. Zachman is the originator of the ‘Framework for Enterprise Architecture’ which has received broad acceptance
around the world as an integrative framework, or ‘periodic table’ of descriptive representations for Enterprises.
(www.zachmaninternational.com)

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Index of Terms
accountable ........................................................................................................................................................................................................ 22, 36, 72

Analytics Culture .................................................................................................................................................................................................................... 43

appliances ..................................................................................................................................................................................................................... 83

architecture design ........................................................................................................................................................................................................ 73, 79, 83

Audit Services ............................................................................................................................................................................................................ 68, 101

balanced scorecard .................................................................................................................................................................................................. 28, 29, 38, 44

Basel II .............................................................................................................................................................................................................. 23, 25

benchmark ................................................................................................................................................................................................... 10, 49, 59, 61

BI CC ................................................................................................................................................................................................... 10, 52, 53, 54

BI Development ..........................................................................................................................................................................11, 53, 59, 67, 85, 98, 99, 100

BI Exploitation ........................................................................................................................................................................................................67, 94, 100

BI foundation ................................................................................................................................................................................................... 36, 37, 38, 72

BI lifecycle ........................................................................................................................................................................................... 14, 66, 68, 98, 100

BI projects ..................................................................................................................................................................................... 51, 52, 53, 54, 99, 127

BI strategy ........................................................................ 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, 85, 86, 94, 98, 100, 102, 103, 109, 110, 122, 171, 172

BI value creation .................................................................................................................................................................................................................... 40

Blended delivery ................................................................................................................................................................................................... 11, 55, 56, 58

Business Analysis ........................................................................................................................................................................................................ 52, 66, 69

Business Analytics ............................................................................................................................................................................................................... 38, 40

Business Context .................................................................................................................................................................................... 100, 102, 106, 107, 108

Business modelling .................................................................................................................................................................................................................... 90

Business Modelling ..................................................................................................................................................................................................................... 38

business performance .............................................................................................................................................................................................................. 25, 38

Business reporting ............................................................................................................................................................................................................... 37, 90

business value discipline ..................................................................................................................................................................................................................... 18

Cause Effect .................................................................................................................................................................................................................... 44

change cost .................................................................................................................................................................................................................... 60

Client Relationship Management .................................................................................................................................................................................................................... 82

CMMI ............................................................................................................................................................................................................... 55, 56

Configuration ......................................................................................................................................................................................................79, 103, 174

construction cycle ............................................................................................................................................................................................................... 40, 41

consumption cycle .................................................................................................................................................................................................................... 41

content rationalisation .................................................................................................................................................................................................................... 50

Corporate Performance Management .......................................................................................................................................................................................... 28, 29, 34, 38, 186

cost effective BI .............................................................................................................................................................................................................. 48, 56

cost reduction ............................................................................................................................................................................................................ 49, 127

Critical Success Factors ........................................................................................................................................................................................... 28, 30, 36, 40, 105

Customer Intimacy ..................................................................................................................................................................................................................... 19

customer profitability ......................................................................................................................................................................................................... 26, 27, 59

Customer Relationship Management .......................................................................................................................................................................................... 25, 34, 38, 70, 154

data governance ................................................................................................................................................................................................. 36, 37, 72, 133

Data Integration ..................................................................................................................................................... 37, 39, 85, 87, 118, 121, 130, 131, 159, 186

data management ..................................................................................................................................................................................... 36, 37, 38, 72, 87, 131

Data Migration ....................................................................................................................................................................................................... 37, 39, 127

Data mining ................................................................................................................. 26, 44, 90, 153, 154, 155, 156, 158, 159, 160, 161, 163, 164, 165

data modelling ............................................................................................................................................................ 37, 55, 58, 88, 116, 134, 135, 137, 146

data models ................................................................................................................................................................... 74, 83, 88, 90, 105, 129, 134, 147

data ownership .............................................................................................................................................................................................................. 36, 72

Data Quality .............................................................................................................................................................................. 39, 116, 126, 127, 170, 178

Data Resource Management ....................................................................................................................................................................................................... 67, 95, 100

Data Vault ................................................................................................................ 88, 105, 111, 116, 124, 134, 135, 136, 138, 140, 141, 142, 146, 176

DBMS .................................................................................................................................................................................................................... 88

definition of BI .................................................................................................................................................................................................................... 34

dimension ..................................................................................................................................... 60, 74, 76, 77, 124, 147, 149, 150, 151, 152, 153, 182

Dimensional modelling .............................................................................................................................................................. 88, 105, 116, 146, 147, 153, 176, 182

document warehouse ........................................................................................................................................................................................................... 161, 162

DW2.0 ................................................................................................................................................................................................................... 162

engineering framework ............................................................................................................................................................................... 98, 99, 100, 101, 104, 106

Enterprise Application Integration .............................................................................................................................................................................................................. 39, 80

Enterprise Content Management .......................................................................................................................................................................................... 34, 35, 39, 91, 160

Enterprise Resource Management .............................................................................................................................................................................................................. 70, 82

Enterprise Value Management ................................................................................................................................................................................................... 18, 19, 20, 38

estimating ....................................................................................................................................................................................................... 59, 61, 124

ETL ............................................................................................................................................................ 56, 58, 83, 87, 116, 123, 124, 125, 126

expert estimation .............................................................................................................................................................................................................. 59, 61

187
188

Extract more value from customer

interactions .............................................................................................................................................................................................................. 22, 25

facts ...................................................................................................................................................... 44, 60, 74, 76, 81, 146, 147, 149, 150, 182

Feasibility study ........................................................................................................................................................................................... 52, 66, 69, 71, 171

FPA .................................................................................................................................................................................................................... 61

funding .................................................................................................................................................................................................................... 53

granularity ............................................................................................................................................................ 76, 77, 88, 90, 140, 147, 148, 159, 182

increments ..................................................................................................................................................... 38, 56, 67, 73, 76, 79, 83, 85, 86, 176, 183

Information Culture .................................................................................................................................................................................................................... 43

Information Delivery Management ............................................................................................................................................................................................................... 67, 94

Information Lifecycle Management .................................................................................................................................................................................................................... 38

Information Management Culture .................................................................................................................................................................................................................... 70

Information Security ............................................................................................................................................................................................................... 57, 77

Infrastructure rationalisation .............................................................................................................................................................................................................. 50, 51

investment ................................................................................................................................................................ 11, 20, 21 42, 43, 57, 59, 60, 61, 85

Key Performance Indicators ................................................................................................................................................................................................. 27, 28, 30, 105

lifecycle management .............................................................................................................................................................................................................. 38, 41

Maintenance and Support ...................................................................................................................................................................................................... 95, 98, 183

Master Data Management .............................................................................................................................................................................................................. 39, 50

maturity .............................................................................................................................................................. 10, 41, 42, 43, 44, 45, 56, 66, 68, 85

measures ................................................................................................................................................ 28, 30, 36, 38, 57, 77, 146, 147, 148, 149, 182

Meta data .................................................................................................................................................................................................................... 83

MIFID .................................................................................................................................................................................................................... 23

offshore ................................................................................................................................................................................................... 11, 51, 55, 58

OLAP ................................................................................................................................................. 44, 88, 90, 153, 154, 158, 159, 160, 163, 177

Operational Excellence ............................................................................................................................................................................................................... 19, 20

opportunity matrix .................................................................................................................................................................................................................... 49

predictive model .............................................................................................................................................................................................................. 26, 27

Processes and organisation

optimisation .............................................................................................................................................................................................................. 50, 51

Product Leadership ..................................................................................................................................................................................................................... 19

project cost .............................................................................................................................................................................................................. 60, 61

Query & Reporting Services .................................................................................................................................................................................................................... 90

reduce churn .............................................................................................................................................................................................................. 25, 26

Repository ........................................................................................................................................................................... 100, 102, 103, 106, 160, 164

risk & compliance framework .................................................................................................................................................................................................................... 25

ROI ....................................................................................................................................................................................................... 21, 61, 134

SAS-70 .................................................................................................................................................................................................................... 57

service cost .............................................................................................................................................................................................................. 60, 61

snowflake ........................................................................................................................................................................................................... 149, 153

Solvency II .................................................................................................................................................................................................................... 23

SOX .................................................................................................................................................................................................................... 23

stakeholders ............................................................................................................................................................... 18, 22, 23, 69, 78, 85, 101, 104, 105

star ...................................................................................................................................................................... 88, 117, 134, 149, 152, 153, 182

strategy cycle .................................................................................................................................................................................................................... 40

Strategy study ................................................................................................................................................................................... 66, 68, 69, 70, 170, 175

System Concept ............................................................................................................................................................................................ 103, 110, 111, 112

System Context .................................................................................................................................................................................... 100, 102, 103, 107, 111

System Specification ................................................................................................................................................................................... 100, 102, 103, 106, 112

TCO ............................................................................................................................................................................................ 41, 43, 49, 55, 99

Testframe .................................................................................................................................................................................................................... 93

text mining ................................................................................................................................. 26, 38, 90, 116, 153, 154, 160, 161, 162, 163, 164, 165

traceable ..................................................................................................................................................................................... 22, 24, 36, 72, 99, 175

Track performance and align metrics

across the organisation .............................................................................................................................................................................................................. 22, 28

Track risk and compliance .............................................................................................................................................................................................................. 22, 23

V-model .................................................................................................................................................................................................................... 93

189
190

Index of Figures
Figure 2.1 Value disciplines ..................................................................................................................................................................................................................... 19

Figure 2.2 Enterprise Value Management.................................................................................................................................................................................................................. 20

Figure 2.3 BI Spend Prediction (Source Gartner, Feb 2008)..................................................................................................................................................................................... 21

Figure 2.4 Regulations introduced (Source: Gartner)................................................................................................................................................................................................ 23

Figure 2.5 Logica GRC Framework ..................................................................................................................................................................................................................... 24

Figure 2.6 Predictive model generation (The CRISP DM Model)............................................................................................................................................................................... 26

Figure 2.7 Predicting bad debt customers................................................................................................................................................................................................................ 27

Figure 2.8 Lack of alignment on vision, mission and strategy................................................................................................................................................................................... 29

Figure 2.9 BI and CPM alignment ..................................................................................................................................................................................................................... 30

Figure 3.1 Challenges for BI ..................................................................................................................................................................................................................... 36

Figure 3.2 Business Intelligence foundation.............................................................................................................................................................................................................. 37

Figure 3.3 Value creation with BI ..................................................................................................................................................................................................................... 40

Figure 3.4 Maturity model (source: TDWI)................................................................................................................................................................................................................. 42

Figure 3.5 BI Maturity by Logica ..................................................................................................................................................................................................................... 44

Figure 4.1 Cost reduction roadmap (illustration)........................................................................................................................................................................................................ 50

Figure 4.2 BI Competence Center ..................................................................................................................................................................................................................... 52

Figure 4.3 Blended delivery model ..................................................................................................................................................................................................................... 58

Figure 5.1 BI Framework ..................................................................................................................................................................................................................... 66

Figure 5.2 Granularity diagram ..................................................................................................................................................................................................................... 76

Figure 5.3 Architecture components ..................................................................................................................................................................................................................... 81

Figure 5.4 Sequential and Iterative Development...................................................................................................................................................................................................... 86

Figure 5.5 Star scheme ..................................................................................................................................................................................................................... 88

Figure 5.6 Universal testing model ..................................................................................................................................................................................................................... 93

Figure 6.1 BI Engineering Framework ................................................................................................................................................................................................................... 101

Figure 7.1 Dimensional Data Warehouse ETL Framework....................................................................................................................................................................................... 123

Figure 7.2 Data Quality skills ....................................................................................................................................................................................................................131

Figure 7.3 Data Quality Score card ................................................................................................................................................................................................................... 132

Figure 7.4 Continuous data quality improvement.................................................................................................................................................................................................... 133

Figure 7.5 Loading hubs ................................................................................................................................................................................................................... 143

Figure 7.6 Loading links ................................................................................................................................................................................................................... 144

Figure 7.7 Loading Satellites ................................................................................................................................................................................................................... 145

Figure 7.8 End dating Satellites ................................................................................................................................................................................................................... 146

Figure 7.9 Granularity Diagram ................................................................................................................................................................................................................... 148

Figure 7.10 The Crisp-DM Model ................................................................................................................................................................................................................... 156

Figure 7.11 Data Mining Techniques ................................................................................................................................................................................................................... 157

191
192

Index of Tables
Table 1.1 Target audience ..................................................................................................................................................................................................................... 14

Table 2.1 Decision making levels ..................................................................................................................................................................................................................... 28

Table 3.1 Levels of BI usage ..................................................................................................................................................................................................................... 35

Table 4.1 Content rationalisation oppertunities......................................................................................................................................................................................................... 50

Table 4.2 Infrastructure rationalisation oppertunities................................................................................................................................................................................................ 51

Table 4.3 Process and organisation rationalisation oppertunities............................................................................................................................................................................. 51

Table 4.4 Organisational structure of a BI CC........................................................................................................................................................................................................... 54

Table 4.5 Management of a BI CC ..................................................................................................................................................................................................................... 54

Table 4.6 Predictive value of benchmark parameters................................................................................................................................................................................................ 60

Table 5.1 BI Architecture components ..................................................................................................................................................................................................................... 82

Table 6.1 BI Engineering Framework activities........................................................................................................................................................................................................ 100

Table 6.2 BI Engineering framework stakeholder perspectives............................................................................................................................................................................... 102

Table 6.3 BI Engineering Framework disciplines..................................................................................................................................................................................................... 104

Table 6.4 BI Engineering Framework overview........................................................................................................................................................................................................ 106

Table 6.5 BI Engineering Framework business context............................................................................................................................................................................................107

Table 6.6 BI Engineering Framework Business Context.......................................................................................................................................................................................... 108

Table 6.7 BI Engineering Framework System Context............................................................................................................................................................................................. 109

Table 6.8 BI Engineering Framework Architecture...................................................................................................................................................................................................110

Table 6.9 BI Engineering Framework System Concept............................................................................................................................................................................................111

Table 6.10 BI Engineering Framework System Specification....................................................................................................................................................................................112

Table 7.1 Architecture evaluation criteria..................................................................................................................................................................................................................119

Table 7.2 Evaluating architecture topologies........................................................................................................................................................................................................... 122

Table 7.3 ETL Framework Stages ................................................................................................................................................................................................................... 125

Table 7.4 ETL Framework Management Processes................................................................................................................................................................................................ 126

Table 7.5 History strategies ....................................................................................................................................................................................................................151

Table 7.6 Dimension types ................................................................................................................................................................................................................... 152

Table 7.7 Data versus text mining ................................................................................................................................................................................................................... 164

Table 8.1 Ferrari case - BI Framework stages..........................................................................................................................................................................................................170

Index of References

Abonyi, J., Feil, B., and Abraham, A. ........................................................................................................................................................................................................... 166, 184

Cios, K. J., Pedrycz, W., Swiniarski,

R. W., and Kurgan, L. A. ................................................................................................................................................................................................................... 166

CRISP-DM ............................................................................................................................................................................................. 26, 155, 156, 157

Dan Linstedt ............................................................................................................................................................................................................. 88, 134

Dy, J. G., and Brodley, C. E. ................................................................................................................................................................................................................... 166

Fayyad, U., Piatetsky-Shapiro, G.,

and Smyth, P. ................................................................................................................................................................................................................... 166

Gartner ............................................................................................................................................................................................................... 21, 83

Inmon and Imhoff ................................................................................................................................................................................................................... 120

Kaplan and Norton .................................................................................................................................................................................................................... 28

Kimball ........................................................................................................................................................................................................... 120, 146

Mimno ................................................................................................................................................................................................................... 120

Miradi, M. ................................................................................................................................................................................................................... 166

Moss ................................................................................................................................................................................................................... 120

NESMA ............................................................................................................................................................................................................... 61, 62

OVUM .................................................................................................................................................................................................................... 83

TDWI ............................................................................................................................................................................................... 42, 83, 120, 122

Treacy and Wiersema ..................................................................................................................................................................................................................... 19

Zachman ............................................................................................................................................................................................................. 98, 101

193
Logica
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Green Park
Reading, RG2 6UA
United Kingdom
T: +44 20 7637 9111
F: +44 20 7468 7006
E: hga.bi.ww@logica.com
I: www.logica.com/BI
About Logica
Logica is a leading IT and business services company, employing 40,000 people. It provides business consulting, systems
integration, and IT and business process outsourcing services. Logica works closely with its customers to release their
potential - enabling change that increases their efficiency, accelerates growth and manages risk. It applies its deep
industry knowledge, technical excellence and global delivery expertise to help its customers build leadership positions in
their markets. Logica is listed on both the London Stock Exchange and Euronext (Amsterdam) (LSE: LOG; Euronext: LOG).
More information is available at www.logica.com.
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