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BI and Beyond
By Gal Rimon, Ness-Gilon Business Insight
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Most organizations in Israel and abroad have already established Business Intelligence systems. According to a recent survey conducted by Cutter (sponsored by the STKI Company), approximately 39% of organizations are in the process of applying Corporate Performance Management (CPM) systems. The question that is now being asked is: What comes next? How can we prepare for the business and organizational tasks of 2006 that obligate organization managers to make quicker, more precise decisions?
Most organizations in Israel have already established BI systems, and organizations with experience in the area who established systems during the 1990s have already upgraded their system to a second version within today's modern technologies.
I recall that during my meetings in the 1990s with general managers, vice-presidents and information systems managers, there was little awareness of BI systems. During these meetings, emphasis was placed upon presenting abilities to receive processed and visual information for the purpose of supporting decision-making. Organizations that succeeded in applying BI technology created a competitive advantage in that they could better understand the behavior of their clientele, better analyze their current activities, and could anticipate trends and deal with them.
During recent years there has been increased awareness among managers regarding the field of BI. Data Warehouse systems, OLAP applications, trend reports, distribution, and forecasting are services that are now taken for granted together with computerized groundwork and operation systems. In other words, organization cannot get along without them, but the competitive advantage that they provided in the past is no longer significant - since the competitors have similar systems as well.
This review will present the new trends that enable the re-creation of a competitive business advantage with the help of modern BI technologies (See graph 1).
Dashboards/BI Portals
According to Gartner's analysis there is a "BI Gap" in most organizations, which expresses the gap between the quantity of available information in the organization and the quantity of information that is used in decision making. Decreasing this gap can offer the organization a powerful increase in strength and enable significant improvement in the quality of decisions. This is similar to a fighter pilot flying a sophisticated plane. In order to fly it and to carry out attack missions he must assess numerous systems and consult various factors. In reality the pilot is aided in carrying out his missions by all the essential information concentrated in the cockpit. Despite the fact that they have available existing information, managers make numerous decisions based upon hunches and scraps of information. The task at hand is to create a site in which information will be concentrated, summarized, and made available to everyone. This site is the Dashboard or BI Portal.
Its components include an opening screen for presenting the indexes for making reports and condensed information, a navigation mechanism, information about the information, a mechanism for warning users, integration of guidance materials, and a mechanism for authorization and personalization.
Researches show that the return on investment (ROI) for this component is extremely high.
Scorecards/Corporate Performance Management (CPM)
Corporate performance Management applications (CPM) are based on the close connection between the organization's strategies and its actual performance. Many organizations are capable of defining correct strategies suitable for the market, the competition, and the organization's objectives, but have great difficulty assimilating the strategy into the middle level – mainly in decentralized organizations (departments, branches, etc.). CRM applications enable organizational strategies and their derivatives to be clearly presented to managers at all levels. In actuality, all managers see the Key Performance Indicators, or the KPS, by which they are measured, and see their contribution to the organization (weight); quantitative objective and actual performance level via the KPS. In this manner, managers can assess how compatible their department's performance is to the organization's objectives. Consequently, organization performance discipline increases, we save a great deal of time, a two-directional transparency is created and organization dynamics improve. For example; when the management increases the value of the market segment index at the expense of the value of the profit index, the manager of the service department will take actions to update guidelines independently and immediately, since he or she knows that the manner by which his or her success will be measured has changed. According to Cutter's latest research, 39% of organizations are undergoing a process of applying Corporate Performance Management systems.
The next stage in CPM systems will be to create a strategic map in which there is a reason-result connection between the various KPIs (For example; the time it takes to deal with a breakdown א 0% abandonment א profit). In this way it will be possible to anticipate root problems that influence performance in organizations and to deal with them.
During recent years there has been discussion in Israel and abroad regarding the fast organization – an organization that adapts itself to changing reality. In order to create a fast organization, the entire organization must be directed towards a clear objective. In 1954 Walt Disney said: "Among all the things that I did, the most essential was to adapt the workers' talents to us and to direct them towards a clear objective." |
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Campaign Management /Analytical CRM
Customer Relationship Management (CRM) applications have become essential in modern organizations, and provide service for their customers, but few organizations have succeeded in transforming the accumulated information about their customers and the interaction with them into marketing activities, sales, and preservation.
With the help of analytical CRM systems we can perform information analysis from the CRM systems and BI systems, create models of customer behavior, create proposals/campaigns suitable, construct optimal campaigns and referral channels that are personally adapted to each client, approach the client (usually with the help of the CRM systems), follow up after the results of the approach, and keep the CRM/BI systems up to date in order to close the loop for the purpose of organizational learning. This process enables us to increase the quantity of campaigns and decrease the number of approaches while raising the focus and success rate for each approach (the hit rate). Recently there has been an increase in the use of marketing methods as a result of inbound marketing. For example; when clients approaches the bank service center to clarify something or to lodge a complaint, the system offers them a service/product that is suitable to their profile and personal needs. This is known as the Next Best Product/Offer. Since there is a high level of attention on the part of the client during this event and the approach is personal and focused, the chances for success are high. During the part two years most communication companies, banks, and credit card companies in Israel have begun to apply these systems. Event Base Systems
BI systems enable analysis of phenomenon and trends. The problem is that analysis using BI tools provides an answer to a defined business questions that the user asks. However, in many cases – exceptional events that cost the organization a great deal of money are hidden behind trends and main distributions of information.
For example; a shortage of a particular product at a certain branch will result in a significant decrease in sales of the product. The business question that analyzes the distribution of sales according to product may fail to locate the phenomenon, since the summary of products into groups and the summary of branches on a national level will not reveal the problem. Rapid location will enable clients to be referred to a different branch, or for the missing stock to be delivered from a nearby branch.
Event Base Tools locate anomalous behaviors of information and saturate them to users according to areas of interest and level of severity by use of reports, emails, or SMS messages.
There are two main product families: the first are Rule-Based and define business rules; the second are statistic products which run analytical models based on findings after slight direction, such as Business Events.
In these cases, statistical tools enable immediate location of sales problems while categorizing them by branch/product and recommend solutions.
Enterprise Information Integration (EII)
The field of integration has become accelerated in recent years, and the main objective is the end of the "spaghetti" era – the creation of centralizing mechanisms for conveying or investigating data and transactions between systems and databases.
During the last decade Extraction Transform Load (ETL) tools have been used for concluding data, conducting transformations and loading BI systems, while Enterprise Application Integration tools (EAI) have been used for interfaces between applications.
The new family of products in this field is called EII, and its objective is to create Virtual Data Federation – in other words, to make all the organization's data available at a single glance (various data sources - technologies, websites, etc.) in real time using virtual unification. This issue is also connected with the need for Real Time BI – which stems from the ambition to decrease the reaction time to events. For example: if a service center finds that a VIP client has had several cut-offs during the last hour if can respond accordingly.
There is a strong trend among producers of these tools to combine ETL and EII. For example, IBM purchased DataSTage/Ascential and connected it to Websphere Information Integration (WII) to form its Websphere package. Data Quality and Improvement
Improvement of BI abilities, increased availability and assimilation into the organization have resulted in increased dependence upon information. Because of the problems of integration of systems and various processes in the organization, feeding problems and bugs, we are liable to create a threat to decision-makers who work with their eyes closed and who depend upon information.
Every organization with an operating BI system must have a Data Quality Assurance backup (DQU). This mechanism must contain the business rules for completion, integration, serial order, compatibility, and probability of data. These mechanisms are automatic and enable a statement to be received regarding the quality of data in the system (reports, SMS, or mail). According to Gartner, regulation processes such as Sarbanes Oxley which obligate report reliability and transparency. More and more companies perform Mergers &Acquisitions on a regular basis and therefore need to merge various systems into one single and reliable system. This has created an increasing need for ensuring data quality in BI systems.
Conclusion
During recent years there has been increasing awareness of the business need for the field of BI following the Hype period. The field has proven successful and the tools are now consolidated and ready for use. Despite this, this field is far from being utilized. The trends that were described in this review have been divided into two groups: The first group utilizes the assets of BI for the purpose of broader business processes, while the second group improves the BI groundwork and helps in reliability and availability.
Leading members of the organization must constantly assess the gap between business demands and BI assets. Decreasing this gap can constitute a tremendous increase in power for decision makers.
The Author is CEO Ness-Gilon Global, CEO Synergy. |
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