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The Road to BI Success: BI Strategy

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1 The Road to BI Success: BI Strategy
Mohammad Rafi Khan SAP Pakistan

2 What is Business Intelligence (BI)?
“Concepts and methods to improve business decision making by using fact-based support systems.” In Simpler terms BI is “Analysis of Data”

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4 Competitive Edge Is Gained With Analytics
High performing companies are 50% more likely to use analytic information strategically High Performers Low Performers Have significant decision-support/analytical capabilities Value Analytical insights to a very large extent Have above average analytical capability within industry Use analytics across their entire organization Source: Competing on Analytics, Thomas Davenport

5 Adoption Rate of Business Intelligence End Users Need a Leap in Performance
12% Number & Scope of KPI’s Required is Expanding “The percentage of employees using BI in 2007 was 25 percent and was 24 percent in When BI is made relevant and accessible to front-line and field workers as well as externally to customers and suppliers, then BI usage will reach beyond 100 percent of employees.“ Source: Pervasive BI: Still a Vision, Not Reality By Stephen Swoyer 01/20/10 The reality is quite different. It is 12%. What is 12%? It is the adoption of BI among corporate works. What this means is that 78% of business users have no access to self-service BI tools and rely on IT or BI experts for their information. BTW., the average time for IT to create a new analysis or report is 20 days. Further compounding this challenge is the amount of information we have. We need to analyze every increasing amounts of information to gain actionable insights. Current database or BI tools can’t keep up with the amount of information we have.

6 Five Signs that a Company Does Not Have a BI Strategy
The BI Strategy consists of a BI architecture slide IT is asking the business what reports they need Step one is building a data warehouse None of the BI team members can articulate the company business strategy There are no metrics defined to measure progress & success

7 What is a BI strategy? BI Needs BI Adoption Execution +

8 What is a BI strategy? 2. BI Needs 3. Benefits
4. Information Structure & Technology 5. Organization & Implementation 1. Objectives

9 BI strategy is critical for success
"The lack of a clear, well developed and articulated BI Strategy along with appropriate executive sponsorship are among the top reasons why BI initiatives do not achieve their potential or fail outright.“ Bill Hostmann, VP Distinguished Analyst, Gartner

10 Organizations Need a BI Strategy
How does a BI strategy benefit IT? Help align with business partners, formalize business needs Create prioritized roadmap for the enterprise of short, medium and long term projects aligned with strategic business goals delivering measurable results Creating business justification for an enterprise scope and end-to-end BI including data management A departmental BI need often involves needing data from other groups. Solve the departmental pain points by removing limits of a departmental focus through an enterprise-wide strategy Have departmental spend go further and contribute to enterprise investments required. An enterprise BI approach provides a unified approach by all departments allowing everyone to “speak the same language” How does a BI strategy benefit a LOB? How can SAP Help? As the market leader in BI SAP has seen more implementations of BI than any other vendor. We make this experience work for our customers. Partnering with Gartner (the leading industry analyst firm with the largest BI practice) we created this BI strategy development methodology based on best practices independent from specific products.

11 Examples of questions typically answered by a BI Strategy include:
In what scenarios BI can help my finance department? What is my value proposition for BI (Results, Value)? Do I have a BI strategy? What architecture and standards in need to follow? What organization structure I need?

12 The Road to BI Success with SAP: BI Strategy
Current BI Needs Baseline Analysis BI Strategy & Execution Baseline BI Strategy Foundation Gap Analysis Playbook 1 Playbook 2 Playbook 3 Playbook 4 Four step approach to developing a solid BI strategy foundation

13 You Can Add Pain/Impact Pairs and Additional Information for Context

14 The Road to BI Success with SAP: BI Strategy
Current BI Needs Baseline Analysis BI Strategy & Execution Baseline BI Strategy Foundation Gap Analysis Playbook 1 Playbook 2 Playbook 3 Playbook 4

15 Measuring the Business Pains
10 = Highest Pressing problem. It currently causes significant problems, and often delays identification of or action on critical business issues, or it definitely decreases our competitive advantage. 7 to 9 = Medium/High The issue often causes problems and sometimes prevents us from catching significant problems early enough to fix them before they have a major effect on our business – or prevents us from seeing opportunities early enough to capitalize on them. 4 to 6 = Medium This issue has been causing problems – or delays in understanding what is happening in the business – but there is a temporary workaround. In the longer term the workaround is probably not a viable solution. 2 to 3 = Low/Medium The issue has caused some inconvenience from time to time, but is not a significant problem – or it will be solved by initiatives currently in process. 1 = Lowest There is little or no ‘pain’ experienced currently. It might be a latent issue that is currently not causing meaningful issues.

16 Sales Pain and Impact Examples
Common Business Pains of Sales Executives (EVP, SVP, VP of Sales, Director of Sales, etc.) When I meet with sales executives at other companies, I consistently hear the following business problems: Business Pain Level of Pain (1-10 where 1=Low, 10=High) Business Impact Impact of Addressing S6 Lack of integrated customer information – We have multiple systems which each contain partial and/or overlapping customer data. It is impossible to get a complete picture of a customer sales, service and profitability relationship – or identify problems / issues early on. We will know which customers are most profitable, so we can focus on those relationships. We can also strategically target less profitable relationships for improvement. Ability to identify and solve customer relationship issues before they become major. S8 Inability to understand pipeline drivers - The quality of our pipeline is decreasing, but we lack methods to assess and identify improvement approaches. Reps are chasing deals with a low chance of closure. Identifying closure potential will decrease the cost of sales, increase our sales close rates, revenue, and increase the effectiveness of our incentive compensation. S10 Leads delivered to sales don’t translate into valuable opportunities - Marketing metrics on lead generation and the perceived value of leads to Sales are not in alignment. We can have shared opinions and definitions of the value of leads generated. That way we’ll increase the value of investments in lead generation for both sales and marketing.

17 Current BI Needs Baseline Analysis
BI Strategy & Execution Baseline Analysis BI Business Needs Identification and Gap Summary by LOB Objective: Create high level summary of BI needs by LOB, and their expected impact if addressed Measures whether or not an enterprise-wide BI strategy exists If one does exist, what is the level of execution on that strategy? Examples of questions typically answered by a BI Strategy include: What business decisions do we not have sufficient information to make? What is our vision for information accessibility and usage? What should the high-level BI roadmap of initiatives look like? What capabilities are required to make information available and useful? What are the dependencies? What metrics should we use to manage the BI implementation and fulfillment of BI business goals? How should we design the processes, applications, and organization to fulfill our BI vision? What toolsets should I use to fulfill our BI vision? Outcomes Deepen account relationship Increase account team credibility Follow-on interactive sessions with subsequent playbooks BI Rapid Assessment

18 The Road to BI Success with SAP: BI Strategy
Current BI Needs Baseline Analysis BI Strategy & Execution Baseline BI Strategy Foundation Gap Analysis Playbook 1 Playbook 2 Playbook 3 Playbook 4

19 Components of a Business Intelligence Strategy
Current BI Needs Baseline Analysis BI Strategy & Execution Baseline BI Strategy Foundation Gap Analysis Playbook 1 Playbook 2 Playbook 3 Playbook 4 Objectives BI Needs Business Case Information Structure and Technology Organization and Implementation

20 BI Strategy Components
To what degree does it exist? Rate the degree to which the BI Strategy Components exist in your organization Definitions of Level of Existence ratings 10 = High This Strategy component has been fully defined. It has been well defined, with plans to address deficiencies. Decisions have been made and appropriately communicated. No major gaps exist. 7 to 9 = Medium/High This Strategy component has been mostly defined. One or two major gaps may exist. 4 to 6 = Medium This Strategy component has been partially defined. There are still a number of issues that have not been dealt with, and some decisions have yet to be made and communicated. 2 to 3 = Low/Medium This Strategy component has been minimally defined. Some planning has been done to define the issue, but most decisions have yet to be made and communicated. 1 = Low This Strategy component has been not at all defined. Very little planning has been done to define the issue, and no decisions have been made.

21 Background and Objectives
Purpose and Goals Current State and History BI Objectives and Scope The extent to which the history, key reasons and objectives for the BI Strategy have been documented and to what extent the objectives have been executed What led to this point, and why the BI Strategy was (or is being) built Level of Existence measures the extent to which the BI Strategy has been agreed upon and clearly documented Completeness of Execution – Not Applicable reason for BI strategy? Eg: The organization is currently unable to effectively execute on its business strategy due to a lack of visibility into key performance metrics supporting corporate objectives. Have you defined goals? Have you defines mission statements?

22 Business Intelligence Needs
BI Needs Summary of BI Needs Envisioned To-Be State Priorities and Alignment To what extent the business needs and future state have been defined and executed in terms of business requirements and corresponding KPIs Key information needs by stakeholder group or role group (e.g. Finance, Sales) and role (e.g. C-level, VP, Director, Manager) Level of Existence measures whether the needs by stakeholder group or role have been identified, validated and documented Completeness of Execution measures the fulfillment of these information needs, including whether the fulfillment targets are being tracked and met What are the information needs of your business units? Examples: Sales Ability to analyze sales performance and quickly identify issues or problems across teams, geographies, or by individual sales reps Improved ability to do sales forecasting Improved insight into sales close rates & root causes for declining close rates Finance Increased ability to consolidate reporting from a variety of information sources Ability to use flexible management reporting Improved ability to assess performance at a product, business, store, geographic level Marketing Ability to measure and manage marketing campaign performance Increased visibility into account defections, including root cause analysis, key indicators that can help predict customer defections Ability to determine product level demand trends, including product profitability, SKU profitability and geographic profitability

23 Organization and Implementation
Governance Structure Program Management Roadmap and Milestones Measurement Education / Training Support To what extent the organization is ready to implement the BI Strategy and is on track to execute The metrics developed as well as the methodologies used to measure the implementation and ongoing success of the BI strategy Level of Existence describes whether metrics have been defined to assess the implementation and ongoing success of the BI strategy Completeness of Execution describes to what extent the implementation and ongoing success of the BI strategy is being tracked and if the targets are being met

24 Best Practice Example: BI Competency Center Models
Every organization is different, and one or more of these BI Competency Center organizational models may work for you. BICC as an IT Department Virtual BICC BICC as Part of Operations Distributed BICC COO CIO ICC Department BICC Division 1 Division 2 Division 3 Corporate Finance .… Sales How do you organize cross-functionally around BI Strategy? Create a BICC Source: How to Define and Run a Successful Business Intelligence Competency Center, Gartner, August 2007

25 Best Practice Example: BICC Business, Analytics and IT Skills
Business Needs Business Skills Organization and Processes Statistical and Process Skills Governance, Administration Tools, Infrastructure, Applications, Data Establish Standards Control Funding Define BI Vision Manage Programs Build Technology Blueprint Develop User Skills Organize Methodology Leadership Analytic Skills IT Skills BICC Source: How to Define and Run a Successful Business Intelligence Competency Center, Gartner, August 2007

26 BI Focused Best Practice KPIs
Example of BI focused best practice KPIs include: % of Strategic KPIs Tracked Using BI Software % of Employees With Visibility into Strategic KPIs Usage of BI/ Analytics to Manage Business Processes Availability of Real-time/Predictive Insights into Business Processes % of Employees Receiving Analytical Information % of External Stakeholders Receiving Analytical Information Drilldown Levels % Active Reports Created by Business (as Opposed to by IT) Cost per Report (‘000s) Report Development Cycle Time % ETL Failed IT Spend as % of Revenue BI Spend as % of IT Spend BI Spend per Employee BI Support FTEs per 1000 Users

27 BI Strategy & Execution Baseline Analysis
Objective: Assess existence of BI Strategy, completeness of execution, and impact if completed Measures whether or not an enterprise-wide BI strategy exists If one does exist, what is the level of execution on that strategy? Examples of questions typically answered by a BI Strategy include: What business decisions do we not have sufficient information to make? What is our vision for information accessibility and usage? What should the high-level BI roadmap of initiatives look like? What capabilities are required to make information available and useful? What are the dependencies? What metrics should we use to manage the BI implementation and fulfillment of BI business goals? How should we design the processes, applications, and organization to fulfill our BI vision? What toolsets should I use to fulfill our BI vision? Outcome Feeds into the Gap Analysis, Playbook 3

28 The Road to BI Success with SAP: BI Strategy
Current BI Needs Baseline Analysis BI Strategy & Execution Baseline BI Strategy Foundation Gap Analysis Playbook 1 Playbook 2 Playbook 3 Playbook 4

29 BI Strategy & Execution Gaps
Gap Analysis Business Pains Objective: Prioritize Gaps of existing BI needs, and non-existent or not well-executed strategy components PRIORITIZED GAPS BI Strategy & Execution Gaps Summarizes gaps identified by Playbook 1 and 2 Helps Account Executives review and prioritize - with their customers - the most important gaps between the customer’s current and desired BI state Not meant for detailed technical discussions with customers – those are handled by detailed (customer-funded) BI Strategy Workshops delivered by the field services team, and/or BI Consulting Engagements Outcome Discussion of the value of closing the gaps, found in Playbook 4

30 Gap Analysis Summarizes gaps identified by Playbook 1 and 2
Helps Account Executives review and prioritize - with their customers - the most important gaps between the customer’s current and desired BI state Not meant for detailed technical discussions with customers – those are handled by detailed (customer-funded) BI Strategy Workshops delivered by the field services team, and/or BI Consulting Engagements Outcome Discussion of the value of closing the gaps, found in Playbook 4

31 BI Strategy Best Practice defined as 18 elements in 5 categories
Background and Objectives BI Needs Benefits Information Structure and Technology Organization and Implementation Purpose and Goals Strategic Vision Workshop for Enterprise BI Summary of BI Needs Value Proposition of BI Development of SAP implementation business case (ID: ) Information Categories Development of Strategy and Design for IT Architecture (ID: ) Governance Structure Development of Strategy and Design for CoE (ID: ) Current State and History Technical assessment of SAP landscapes (ID: ) Envisioned To-Be State Expected Benefits – Future State KPI Levels Architecture and Standards Program Management BI Objectives and Scope Strategy development service for Business Intelligence (ID: ) Priorities and Alignment Payback BI Applications Roadmap and Milestones Measurement Education / Training Support BI Strategy Best Practice defined as 18 elements in 5 categories. Playbook 2 evaluates level of definition, level of execution and level of impact for each. To elaborate or flush out these areas, we have field services capabilities as well as SAP Value Engineering that can assist you to further define areas which are high-priority to address.

32 The Road to BI Success with SAP: BI Strategy
Current BI Needs Baseline Analysis BI Strategy & Execution Baseline BI Strategy Foundation Gap Analysis Playbook 1 Playbook 2 Playbook 3 Playbook 4

33 BI Strategy Foundation Recommendation
BI Strategy Recommendation Provides ability to track real - time performance through dynamic scorecards, or other solutions, allowing users to post comments and ask questions, so that business unit leaders can take action to improve organizational performance. Determine the appropriate information/ KPIs to track Integrate multiple data sources (if necessary). Determine who needs what information and in what form Automate the delivery of the information Insight Availability We struggle with being able to quickly and easily look at performance, revenue, or costs of marketing programs at a product line, plant level, store level, geography, etc. 16 Combines different sources of sales information such as quota, quota achieved, pipeline, tenure, projected close for next quarter to identify trends and potential issues. information that is needed, and where it resides, if it is available in house If needed, integrate systems to create a more holistic view of customer/prospect data Incomplete Customer Data We have incomplete customer and prospect data (e.g. addresses, phone numbers, addresses, etc.) 15 Determine the causes of sales reductions (bottlenecks in sales process), and the Integrate multiple Sales Variance We need to more quickly be able to identify what is causing sales variances across product, region, LOB, etc 14 Sales Performance Management need deeper insight into sales performance, to be able to understand where we're getting traction, where we're not, and why so adjustments can be made 13 Integrates different types of information into a single view to perform trend analysis and provide a better understanding of revenue relationships. Determine what metrics are needed to demonstrate media the information, and in what form. the information required to all who need it. Integrate data sources if needed. Media Tracking insight into how our media investments across various channels are performing so we can better allocate funds. 12 EXPECTED BENEFIT / VALUE BUSINESS SOLUTION / BENEFIT GAP Objective: Based on prioritized gaps across the organization, understand the business value and benefit of addressing the gaps, and understand the general BI solutions that can solve these business pains. Adds metric and qualitative value information to the identified gaps Maps recommendations that close the gaps Provides understanding the value of addressing unmet business needs which is crucial input to investment decisions This Playbook answers questions such as: Which gaps will drive the biggest benefit for the customer? What BI needs are causing the most disruption – and the highest business pain for decision makers? How can / should identified gaps be prioritized for the maximum enterprise impact? Outcome Feeds into action plan for implementation through one or more BI engagements

34 The Road to BI Success with SAP: BI Strategy
Playbook 1 Playbook 2 Playbook 3 Playbook 4 Current BI Needs Baseline Analysis BI Strategy & Execution Baseline Gap Analysis BI Strategy Foundation Gartner Playbooks [describe each one] Benefits: Easy way to collect inputs Easy way to “crank the content” and output usable strategies Easy way to consume the output Easy ways to put the output to use in high-value creating projects

35 How To Get Started? Summary
Identify High Level Executive Sponsor Assess Current Situation (BI Strategy Assessment) BI Scenarios BI Strategy Gap Priorities & Decide What BI Scenarios To Deploy Reinforce Gaps in BI Strategy Execute! What can you get out of this process? Learn best practices approach to formulating a BI Strategy – key recommendations to find a high level executive sponsor that can help mandate change and organize cross-functionally for an enterprise-wide approach and outcome.

36 The Power of BI

37 Thank you!


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