The Best-Run Businesses Run SAP

Shawn Lester, Director, Center of Excellence for BI, SAP

What is the purpose of business intelligence (BI)? Different people in different parts of the organization may give you slightly different answers, but at its core, the objective is to help the business make better and more informed decisions such as:

• Making a tactical decision around a specific problem like late payments
• Making an operational decision on how to manage logistics or inventory
• Making a strategic decision around opening new stores or plants to drive new revenue, optimize the distribution network, or capitalize on a new customer segment.

To accomplish this, each part of the business needs access to information, a way to analyze the information, and a way to communicate information to guide the decision making process. To be effective, this information needs to be relevant, timely, trusted, within scope, and consumable by the people doing the analysis and making the decisions, whether they be the CEO, the line operations manager, the financial analyst, the campaign manager, the purchasing agent, or the product support specialist, etc. Enabling people to make effective decisions is the purpose of business intelligence, and while the purpose of BI may seem fairly straight forward, the actual approach and execution to make it happen often becomes a bit more convoluted.

Delivering business intelligence
Historically, business intelligence has started as a departmental effort focusing on operational systems specific to functional areas of the business. However, this approach placed overemphasis on addressing the immediate needs of the particular department for a quick win with little focus or consideration for the benefits of utilizing cross-functional data with a single structure across the organization. As organizations begin to mature they start to utilize analytics on a broader scale, growing into functional data marts and eventually into a data warehouse approach where information is shared across functional areas, with the relationship between business and IT evolving in a similar fashion. Overcoming challenges one department at a time The challenge is this natural progression or evolution of business intelligence starting from the departmental focus has resulted in disjointed, overlapping, and siloed structures with duplicate data sets. This has created a various scenarios within the business:

• Some areas of the business are strong and build a safe haven of isolation with their business intelligence. The problem is, it is isolated and creates a challenge in accessing and sharing information and data across the organization.
• Other groups are less active and may have point BI solutions, but continue to swim in the ocean of manual manipulation and Excel–making progress, getting the job done, but at what cost and how effective is it?
• The disjointed systems and siloed structure create mayhem for the enterprise IT group engendering high support costs with limited success and strained relationships with the business. They often become a report generation group with overwhelming demands and little satisfaction.

Depending on the level of BI maturity within the organization, the challenge of bridging these apparent chasms may seem insurmountable, but it is achievable. Like any journey, you start with one step at a time, or in this case, one department at a time.

Getting executive sponsorship and defining a plan
Now, there are some fundamentals that can’t be avoided: one, executive sponsorship (preferably from the business), and two, a plan. The basis for both of these is to understand the business needs. When we talk to needs as they relate to BI, they might be categorized into foundational, tactical, and strategic. Your plan may cover any one of these or all of these in some kind of phased approach, but when we talk about, getting traction for a BI win to garner support, gain momentum, and show success, we need to select a project that addresses an immediate business challenge, can be tied directly to company goals and objectives, can be completed in a relatively short time, and finally, as mentioned before, has executive sponsorship. Ideally, some kind of needs analysis should be done to understand where the business pains are, but some ideas on where to start may include the following:

• Executive KPIs: What is top of mind for the executives? Often this may fall into some type of dashboarding and process like six sigma or balanced scorecard
• Extranet Initiative: Is there a need to share information with customers or collaborate with partners or suppliers?
• Operational BI: Is there a department that has a need for operational dashboards or embedded analytics?
• Office of Finance: Is there an opportunity to improve budgeting, planning, or financial reporting?
• Departmental BI Project: Is there a motivated department with an identified need and desire for a BI project?

As part of this process, the business frustration and challenges should be well communicated and the success of the project heavily promoted. From an initial win, interest and desire to take advantage of the BI benefits will spread to other departments and lead to new projects. It is then a natural step to build a working group of BI IT and users across the organization where successes create best practices that can be reused, and standards can evolve, and a plan for BI standardization can be formulated. Of course, there should not be an ad hoc approach to these projects, but rather, they should be smaller steps within a larger picture around an overall BI strategy addressing foundational, tactical, and strategic needs across the enterprise.

Achieving BI success across your organization
If we revisit the challenges presented by the organic development of BI from operational systems with a department focus, we can see how a project for the first group with a strong analytics focus might enable broader data standards and governance across groups to share information and speak a common language. The second immature group may be able to learn from some of the best practices from the first group and improve their basic reporting and analysis capabilities for faster response time and less effort, while also taking advantage of the ability to share some of the information across groups established from the first project. And finally, IT is able to take an enterprise approach with BI, better focus their efforts and optimize costs with funding from several groups, establish a better relationship with the business, and if self-service was part of the strategy, they can get out of the report creation business. Of course, there is more that goes into this such as the right tool for the right person for the right job with the right data at the right time. To address this, a best practice is to have a BI Competency Center that can foster best practices and determine what the organization needs for successful BI. But the details of that conversation are outside the scope of this discussion.

In summary, a focused BI effort to address specific departmental business imperatives within the context of a larger BI vision and strategy, will create BI adoption and momentum that will grow an organization to the next level of BI and analytical maturity, enable them to become more efficient and effective with their BI, and thus, better arm them with the information and decision power needed to increase their competitive advantage.