Business Intelligence: The Next Generation of Innovation

Kurt Schlegel

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BI is the Most Important CIO Priority for 3 Years Running

2008 CIO Technology Priorities
To what extent will each of the following technologies be a Top 5 priority for you in 2008?
Rank 2008 Rank Rank 2008 2007 2006 Increase*

Business Intelligence Applications

Enterprise Applications (ERP, SCM and CRM) Server and Storage Technologies (Virtualization) Legacy Application Modernization

1 2 3 4 5 6 7 8 9 10

1
2 5 3

1
** 9 10

11.20% 8.02% 8.45% 5.79% 8.53%

Security Technologies
Technical Infrastructure Networking, Voice and Data Communications (VoIP) Collaboration Technologies Document Management Service-Oriented Technologies (SOA and SOBA)

6
8 4 10

2
12 8 4

4.67%
6.83% 7.75% 7.91% 6.71%

9
7

**
6

* Unweighted average budget change ** New question for 2007

Source: 2008 Gartner Executive Programs CIO Survey, January 10, 2008

Key Issues
1. How can BI evolve beyond reporting measures to making great decisions? 2. How can IT leaders drive broader BI adoption? 3. How can the scope of BI initiatives move from enterprise to industry wide?

How to Build a Skyscraper and Why Does It Matter to BI?

Monadnock (1891) Chicago 17 Stories

Flatiron (1901) New York 22 Stories

Burj Dubai (YE08) Dubai 164 stories

Todays BI Strategy: Urban Sprawl

BI focuses too much on Bottom Up reporting of performance measures. And the measures are not what your CEO or senior managers care about. Projects are built with little governance or alignment with corporate strategy.

Portfolio of BI and Performance Management Applications Expand

The BI and Performance Management Continuum: Decision Making Becomes a Core Competency
Strategy Driven
Enterprise Goals

Start with Corporate Strategy Align Key Performance Indicators (KPI) at Each Level Focus on Root Cause Analysis down to the process level

Analyst/ Management Driven

Business Functions

Process Driven
Business Process

Result: Smarter Decisions

Key Steps to Evolve BI Beyond Reporting Measures to Managing Decisions

Experimental Design Linking Planning, Reporting & Analysis Cultural Change
Quality Cost

Decision Making as a core competency

Tradeoff Analysis

Skills Development New Capabilities

Business Vision & Sponsorship

Data Lineage, Governance and Quality

Modeling Forecasting, Simulation, Optimization

IT Delivers Reports & Dashboards

A Text Book Example: The Oakland As

"Moneyball: The Art of Winning an Unfair Game" written by Michael Lewis - Account of Billy Bean, manager of the Oakland Athletics baseball team Used BI to manage processes (e.g., scoring runs) and predict performance (e.g., games won) - Used "on base %" instead of "batting average" to draft players - History showed, in the data, that the old "gut feelings" and adages were wrong - Focused on avoiding outs instead of advancing the runner a major change to the business process of baseball. Result: Able to win 90+ games per year with one-third the payroll of the New York Yankees

Key Issues
1. How can BI evolve beyond reporting measures to making great decisions? 2. How can IT leaders drive broader BI adoption? 3. How can the scope of BI initiatives move from enterprise to industry wide?

Driving BI Adoption
Future Scenarios: Wide Ranging From Human- to Machine-Driven
Empowering Users With BI Organizational Efficacy Requires the Proper Balance Optimizing Business Process With BI

Search Visualization Empowerment

Measure Decide

Alignment Transparency Collaboration

Manage Optimize

Orchestration Business rules

Predictive modeling
Discover Innovate

BI Continuum

Interactive Visualization

Source: Advizor Solutions

BI Integrated with Search

Structure, Qualification, Control of Information
Ad hoc query BI Content Search High Auto- Queries Explore Data Dimensions

Analysis Centric
Reporting/Dashboards

Content Analytics Enterprise Search Low

Search Centric
General to Specific Specific to General

User Interaction Style with Information

Unicredit (HypoVerinsbank AG): Accelerating Decision Processes

Interface Layer

Staging Area

Operational Data Store

validated, integrated historical data

Service-Layer Risk Models

model parameter

Data Marts
multidimensional data structure & reporting views

Reporting & Analysis

HTML PDF CSV XML XLS

operational systems

Extracts
risk & pricing models

transformation external data sources

Load

E/R model

business rule engine

business rules

star model

100 80 60 40 20 0 1st 2nd 3rd 4th

Browser Mail FTP

Scheduling Alerting

75 sources

370 jobs

127 labels ~ 2,000 columns

55 labels 1,660 columns

10 facts 48 dimensions

120 reports 150 users

Metadata Management Data Modeler ETL Visual Rules BI Platform

Information Buffet: EuroDisney

Challenge: Optimize customer satisfaction and reduce expenses Solution: Define KPIs, predict, publish and alert Results: +15% customer satisfaction; Higher staff efficiency Success factors: Distributed decisions aligned with business goals Lessons learned: Cultural change takes years, but it's worth it

Key Issues
1. How can BI evolve beyond reporting measures to making great decisions? 2. How can IT leaders drive broader BI adoption? 3. How can the scope of BI initiatives move from enterprise to industry wide?

Five Major Mutually Reinforcing Discontinuities

Software as a Service

Discontinuities Affect
Business Unit Independence
Global Class

Open Source

Vendor Balance of Power, Distribution, Marketing and Business Models Implementation Alternatives

Rogue End-User Investments

Governance, Authority and Control
Web 2.0 Consumerization

Budgets

Architectural Models

Understand the Trade-Offs That SaaS Presents

Upsides
- Pay for what you use - From an operational budget - Basic functionality that you really need, not bells and whistles that you might need - No operational management worries - No infrastructure overhead/management - Medium-term lower TCO - Faster implementations - Easier integration*
* Theoretically; particularly of SaaS to SaaS
applications written with open APIs

Downsides
- No asset value - Less central management of the application portfolio - More basic functionality* - Vendor management (incl. oversight of their operational management) - Security concerns - Longer-term TCO uncertainties - "OP2OD" (On Premise to On Demand) integration
* Sometimes real, sometimes perceived

BI as a Service (BIaaS Not a Great name)

Input: Detailed data is provided to a trusted info aggregator BI Capabilities Combined with Vertically Specific Information Servies
Neilsen IMS D&B Thomson Reuters

Dimensional slicing & dicing

Google Catalina Marketing NPD IRI Comscore LoanPerformance LexisNexis Skytide

Output: Enriched data fed back to DW

Thomson Healthcare

3 Recommendations for 3 Innovations

BI initiatives are overly focused on reporting
measures.
Craft a BI strategy that makes decision making a core
competency across your company.

BI is too hard for 80% of users.

- Craft a BI strategy that embraces emerging technologies and embeds BI into business processes

BI initiatives lack an external perspective

- Embrace the combination of BI capabilities and industry specific information providers