It has been a busy year in the business intelligence
market.Hyperion has been acquired by
Oracle,SAP is buying Business Objects,
andIBM announced plans to buy Cognos. The
strategies of these major software companies reflect a growing
focus among IT managers.
The need to rationalise and standardise multitudinous business
intelligence tools is rising up the IT agenda as organisations
struggle to obtain a single version of the truth from their
information and
contain costs.
In many firms, data has become fragmented and dispersed because
of the ad hoc way in which they have historically purchased
business intelligence tools. For the past decade, individual
departments have chosen products from either independent suppliers
or database firms to analyse data from specific local
applications.
IT teams, meanwhile, have often opted for another range of
analytical products to work against large horizontal systems, such
as finance or logistics. The waters have been further muddied by
large application providers such as SAP starting to provide their
own, often embedded, business intelligence systems.
Dale Vile, research director at analyst company Freeform
Dynamics, says, "The issue is that, traditionally, organisations
have not budgeted for business intelligence as a discrete entity,
and so expenditure tended to be tacked onto other projects. The
majority of current problems are arising from the subsequent
fragmentation. These issues are greatest in large companies, but
they are still there in smaller ones too."
This means that many users are simply unable to access all of
the relevant information they require, or they are forced to cobble
together bits of data from different sources and applications to
come up with a sound answer to a query. They also find that
information is frequently inaccurate, not least because of
duplication and because there are often no standard definitions of
basic terms, such as "revenues".
Andreas Bitterer, vice-president of research at analyst firm
Gartner, says, "What I would call revenues is different to what you
would call revenues, and we end up with two different figures to
answer the same question because inconsistency is built into the
system. The issue then, of course, is which one do you trust if you
are trying to make decisions?"
Cost implications
This situation has huge ramifications in terms of cost. Not only
do staff waste time searching for relevant information, which
adversely affects their productivity, the IT department wastes
money by not exploiting possible economies of scale in relation to
software licensing deals. It also ends up with a management,
support and training headache.
According to a survey of 1,114 companies in the UK, US and
mainland Europe by Freeform Dynamics in July, this scenario is
unlikely to change significantly any time soon.
The report, entitled
"The
Business Intelligence Inflexion Point: Information is a Right, not
a Privilege", indicated that 33% of companies with more than
5,000 staff have a formal business intelligence strategy, and the
smaller the organisation, the less likely they are to have a
business intelligence plan.
Although 50% of companies questioned expected their investment
in such technology to increase over the next few years, only 13%
anticipated ring-fencing money in the budget to this end. The rest
were incorporating it into other budget lines, or justifying
expenditure on a case-by-case basis, rather than adopting a
strategic approach.
"The course that they are on, largely speaking, is at best not
going to solve the problem and, at worst, is going to aggravate it.
The more you spend on fragmented systems, the more serious the
situation gets, but it can be quite difficult to get business
people to take business intelligence seriously. They scream for
information but often are not willing to put their money where
their mouth is," Vile says.
This is because such projects are notoriously difficult to make
a business case for as they do not necessarily result in direct
savings. The real benefit comes from providing managers with better
information and enabling them to make more effective decisions, but
it is tricky to put a figure on that, and cost justification can be
based largely on faith.
Case study: North Wales Police
One organisation that has benefited from introducing a
well-planned, properly funded business intelligence strategy is
South Wales Police. It found that, because it had multiple
operational policing systems, information was siloed in different
places, with each underlying database having its own set of
business intelligence tools. This situation made it difficult to
extract and analyse data in a consistent way.
The police force considered it crucial to address the issue as
not only is intelligence information becoming more sophisticated,
the organisation will need to comply with the Home Office's
forthcoming Impact Nominal Index initiative. Due to go live in
2010, the initiative is intended to help police forces share
information more effectively.
As a result, in early 2005, South Wales Police started a project
with the help of IT services provider Atos Origin to consolidate
its various applications down to two systems. "At the same time, we
looked at the impact on business intelligence, which we knew would
be significant," says Chief Superintendent Richard Lewis, head of
performance management at South Wales Police.
A year later, this led the force to scrap its fragmented toolset
and start implementing a datawarehouse and reporting tools from
SAS. "Now we have all of our data in one place, in one format, and
with one data model, which enables us to extract new and historical
information more effectively," says Lewis. "It has given us far
better intelligence and awareness of our interactions with
customers, whether they are suspects, victims of crime, witnesses,
or family members that may have contacted us."
The trickiest part of the project was cleaning up existing data
and improving data quality processes, which was "a massive job",
particularly given the sensitivity of the information involved. "We
introduced business rules to bring information together, but some
of it had to be judged manually. If you merge data on two people
with the same name, you could end up arresting the wrong person, so
we could not take any risks," says Lewis.
Another challenge was to win the support of officers who would
be using the system, not all of whom were technically proficient.
This was undertaken with the help of a business change manager who
facilitated seminars for senior and middle managers. They, in turn,
provided input on the optimum ways to undertake process change.
Police "communications champions" were also trained to cascade
information down to colleagues and help them with any
difficulties.
After an optimisation phase, the next step for South Wales
Police will be to introduce data and text mining tools to enable
the organisation to spot trends more effectively. A further aim is
to introduce business data, such as human resources information, to
the datawarehouse.
"Our strategic aim is to put all of our organisational data into
the system, but this is a big project, so we will take a breather
and ensure that what we have done so far, we have got right," says
Lewis.
Bitterer says initiatives of this type are usually very complex
and typically take a few years. Prior to organisations starting a
business intelligence project, they need to undertake an audit of
their assets so that they know what is in place, before tackling
the thorny issue of standardising terminology and metrics and
introducing a clear governance model. Migrating to a new platform
is also often a long-term, gradual process to minimise business
disruption.
Case study: Virgin Media
One organisation that is at the start of its journey here is
Virgin Media. Because its former NTL and Telewest acquisitions have
themselves made numerous cable franchise purchases over the years,
the combined business has disparate datawarehouses, data marts and
related tools that were often put in place to address specific
project requirements.
The challenge now is that, although these silos of information
are able to share common reference data because of the many points
of integration between them, it is not always easy to obtain a
single view of customers.
As a result, Virgin Media is about to issue a request for
proposal for assistance from organisations such as consultants,
systems integrators and software suppliers to help it tackle what
it envisages will be a three-year business intelligence project.
This will include creating a datawarehouse based on Netezza's
appliance and rationalising its query and reporting tools.
Paul Froggatt, information management manager at Virgin Media,
says, "Our vision and strategy is to bring our information assets
into a single consolidated environment that will deliver
intelligence to the enterprise as a whole. The goal is to produce
an holistic view of individuals as customers and identify all the
relationships they have with us and our product sets."
This includes understanding what products customers use, how
they use them, and being able to see any inbound or outbound
contact that has been made with them in order to improve customer
service, reduce churn and enhance cross-selling and up-selling
opportunities.
One of the first steps will be to establish a governance team.
This will be created in the next few months and be tasked with
agreeing on a single version of data definitions and metrics.
The governance team will also prioritise what should be done
when and govern the quality of what is finally delivered. When the
project is complete, the team will continue to own and manage the
data definitions, control who can use the data, and be in charge of
any future enhancements to the system.
Another important task is to engage with key stakeholders across
the business to identify use cases and establish which information
they need access to. This activity will also help the IT department
gain more insight into the scope and size of the programme as it
gains a clearer understanding of what needs to be delivered.
"A business like ours changes very fast, so you cannot afford to
go away, build something in isolation and then throw it over the
fence into a live support environment. You have to be realistic
about what you can achieve in what timescales, and that means
ensuring you fully understand the business requirements and
prioritise accordingly," Froggatt says.