1. © 2006 Wellesley Information Services. All rights reserved. Dr. Bjarne Berg Lenoir-Rhyne College Implementing a global Data Warehouse: Approach, architecture and what you need to know before you start

2. 2 What We’ll Cover….. Why build a global BW system? Designing a global BW architecture The six dimensions of global BW project management Global BW project examples  An in-depth look at a global Telecom  A global industrial company  A glance at four other global BW implementations Getting the team together Lessons learned: global BW project management  Project Management, the team composition, the BW Product and other lessons learned Wrap-up

3. 3 What We’ll Cover… Why build a global BW system?  Business case  Scope  Approach  Performance measures  Tool selection Designing a global BW architecture The six dimensions of global BW project management Global BW project examples Getting the team together Lessons learned: global BW project management Wrap-up

4. 4 Where Does Senior Management Think It Is? 82% of senior executives believe that the information they need to make decisions is available in the company, but very hard to get a hold of. Source: Forbes Magazine Why??

5. 5 Why is Management Not Getting What It Wants? 1. Reporting is still organized around departmental functions 2. Reporting is organized around geographical boundaries 3. Tools are not standardized 4. The focus has been on standardizing processes Most importantly: A global enterprise reporting architecture has not been implemented 82% of senior executives believe that the information they need to make decisions is available in the company, but very hard to get a hold of. Source: Forbes Magazine, 2003

6. 6 Why Consider a Global Data Warehousing Solution? “The advantages that data warehousing offers — faster market response, reduced operating costs, knowledge-based strategic decision support, and more — have made it a required tool of the global economy.” Paul Foote in “State of the Marketplace”. Faulkner Information Services The more access a company has to global information, the faster it can respond to opportunities, threats and risks. Monthly performance reporting is simply not adequate to run a modern multi-national organization… Transactions (i.e. R/3) BI DW (BW) Operational Data Store (BW)

7. 7 BI Analytics vs. Reporting Decide early on how much analytics vs. basic reporting the team is going to deliver. Balanced scorecards based on key performance indicators require more substantial more work than creating simple financial reports. How will users access data in multiple areas? BI Analytics contains pre-developed rules to view or examine data

8. 8 What Facts and Activities Drives the Company? Develop Products/ Services Perform Procurement Produce Products/ Service Manage Logistics/ Distribution Perform Marketing/ Sales Manage Customer Service Research Customer/ Market Needs Conduct Basic Research Design & Develop Products / Services Test-market Product Develop Resource Requirements Plan Develop & Implement Manufacturing Processes Develop & Implement Service Processes Manage Vendor/Contractor Relationships Order Materials/Supplies Manage Inbound Logistics Receive Materials/Supplies Manage Material/Supply Quality Manage Raw Material/Feedstock Inventory Return Materials to Vendors Qualify & Select Vendors/Contractors Manage Engineering Changes Manage Product/Service Quality Obtain, Install, & Maintain Production Equipment Develop & Maintain Production Procedures Plan Capacity Plan Production Requirements Schedule Production Produce & Package Products/Services Perform Production Control Manage Work-In-Process Inventory Develop & Maintain Bills of Material/Formulae Plan Inventory Levels Manage Finished Goods Inventory Manage Outbound Product Flow Manage Transportation Perform Shipping Manage Warehouses/Distribution Centers Develop Market Strategies Develop Marketing Plan Develop Assortment/Brand Plan Develop Product Packaging Create Demand Forecast Establish & Manage Distribution Channels Manage Finished Goods Inventory Manage In-Store Merchandising Manage Sales Force/Brokers Plan & Execute Promotional Events Process Customer Orders Manage Product Packaging/Configuration Manage Product/Service Pricing Manage Scheduling Manage Customer Credit Ratings Handle Inquiries/Complaints Collect Customer Data Provide Customer Service Handle Warranties/Claims/Returns Do not build a global system around what data is easily "available". STEP 1: Determine what activities in the supply chain drives the profit of your company. Regardless of organizational, geographical or system boundaries.

9. 9 Determine Your Global Performance Measures Equipment/Labor (Utilization) Headcount Process Steps (Number Product Development (Cost) Product Development (Cycle Time) Product Introduction (Number) Schedule/Cost Estimates (Accuracy) Equipment/Labor (Utilization) Headcount Process Steps (Number) Purchase Discounts (Value) Purchase Order (Volume/Frequency) Purchase Price Variance (Value) Purchasing (Cost) Purchasing (Cycle Time) Supplier Defects (Number) Supplier Lead Time Supplier On-time Delivery Suppliers (Number) Changeover/Turnaround (Cycle Time) Defects/Off-Quality (Cost) Defects/Off-Quality (Volume/Quantity) Engineering Design Changes (Cycle Times) Engineering Design Changes (Volume/Frequency) Equipment/Labor (Utilization) Headcount Inventory Work In Process (Level/Value) Manufacturing (Cycle Time) Parts/Stock Keeping Units (Number) Process Steps (Number) Production Lot/Batch Size Production Schedule (Accuracy/Fulfillment) Productivity/Throughput Quality of Service Rework (Cost) Rework (Volume/Frequency) Scheduled Maintenance (Cost) Scheduled Maintenance (Cycle Time) Scheduled Maintenance (Frequency) Scrap/Waste (Cost) Theft/Shrinkage (Cost) Unscheduled Maintenance (Cost) Unscheduled Maintenance (Cycle Time) Unscheduled Maintenance (Frequency) Perform Produce Develop Products/ Services STEP 2: Determine what performance measures you need to track in BW. Consider what successful companies in your industry are doing..

10. 10 Distribute Products Market / Sell Products / Services Manage Customer Service Look to the Industry for Best Performance Measure Practices Carriers (Number) Dock-to-Stock (Cycle Time) Equipment/Labor (Utilization) Headcount Inventory (Accuracy) Inventory Finished Goods (Level/Value) Inventory Finished Goods (Turnover) Inventory Intransit (Level/Value) Inventory Raw Materials (Level/Value) Inventory Raw Materials (Turnover) Picking (Accuracy) Picking/Packing (Cycle Time) Process Steps (Number) Advertising Effectiveness (Awareness) Advertising Effectiveness (Perception) Annual Purchase Volume Closure/Conversion Rate Customer Complaints (Volume/Frequency) Customer Retention Rates Customer Returns (Number) Design/Formulation/Package Changes Distribution Channels (Number) Event ROI Forecast (Accuracy) Forecast (Cycle Time) Headcount In-Stock Ratio on Promoted items/Rainchecks Marketing (Cost) Marketing (Cycle Time) Marketing Effectiveness (Cost) Marketing Effectiveness (Cycle Time) Product/Brand Forecast (Accuracy) Product/Brand Forecast (Cycle Time) Shelf/Floor Allotment Shopping Frequency SKU’s (Number) Traffic Count & Transaction Size Variance to Plan (Market Share) Variance to Plan (Production Cost/Volume) Variance to Plan (Sales Value/Units) Adjusted Orders (Volume/Frequency) Backorders/Stockouts (Volume/Frequency) Billing (Cost) Billing (Cycle Time) Credit/Debit Memos (Volume/Frequency) Customer Satisfaction Rating Equipment/Labor (Utilization) Headcount Inquiries/Complaints (Volume/Frequency) On-time Delivery Rate Order Fill Ratio Order Fulfillment (Cycle Time) Order Processing (Cycle Time) Order Processing (volume) Process Steps (Number) Response/Wait Time Warranties/Claims/Returns (Cost) Warranties/Claims/Returns (Volume/Frequency) NOTE: The performance measures may be different than those you are reporting on today… Ignore organizational, geographical or system boundaries.

11. 11 Where Are We? Why build a global BW system? Designing a global BW architecture The six dimensions of global BW project management Global BW project examples Getting the team together Lessons learned: global BW project management Wrap-up

12. 12 Operational Reporting More Summarized More Ad Hoc Management Information Lightly Summarized Real-time Inquiry Dividing Line ERPDW What Logically Belongs in a Global BW System? Four years ago, with version 3.0B, BW became increasingly able to report on operational detailed data. But some reports still belong in R/3 or other transactions systems…

13. 13 The Global Target Architecture – An Example Meta Data Data Warehouse and Decision Support Framework R/3 Legacy Systems External systems Internet Messaging Source Data Data Extraction Transform and Load Processes Extract Summation Marketing & Sales Purchasing Corporate Product Line Location Operational Data Store Translate Attribute Calculate Summarize Synchronize Transform Summarized Data Data Subsets by Segment Data Warehouse OLAP Data Mining Batch Reporting Managed Query Env. Access Data Marts Vendor Provided Reconcile Finance Supply

14. 14 * Rapidly improving content Where do I start? All functional areas are not equally supported by strong standard SAP BW business content. Some areas have much you can leverage, others will require significant enhancement to meet your requirements The differences are often due to customization on the R/3-side by companies and/or industry solutions. Focus on an area that solves a problem instead of becoming a "replacement" project. Gradually, using a prioritized phased approach, solve other business problems. A good way to think of a BW rollout is in terms of business problems.

15. 15 Where Are We? Why build a global BW system? Designing a global BW architecture The six dimensions of global BW project management Global BW project examples Getting the team together Lessons learned: global BW project management Wrap-up

16. 16 The Six Global Dimensions There are six core global dimensions you must consider before embarking on a global DW strategy. Project management is important, but it’s only one of these dimensions. Failure to account for the others may result in project failures. Source: Peter Grottendieck, Siemens For each dimension, articulate an approach, constraints, limitations and assumptions before you start your project.

17. 17 The Six Global Dimensions (cont.) Be aware that US management styles can often come across as very aggressive and authoritative. To get local buy-in, assign meaningful leadership roles to local managers. Culture, language, attitudes and politics can get in the way of a global project… Make sure you have a blend of local resources in leadership roles and consider local consultants instead of bringing in US resources… Intercultural Know How

18. 18 The Six Global Dimensions (cont.) One of the first steps is to make sure you have reliable connectivity and bandwidth to move the data each night… What happens if the data movement fails? How can you get access to backup tapes? Can the bandwidth handle end-of month high volumes? What infrastructure do each source site use? Infrastructure Prerequisites

19. 19 Documentation The Six Global Dimensions (cont.) Do all team members and end-users communicate as effective in English? 1.Do we need multi-language training and documentation? 2.Does basic conversational English mean that users can read and understand technical training material and documentation? 3.Have you installed Unicode on your BW system? Training

20. 20 Plan for solving Global SAP BI project issues Having IT people engaged in SAP BI global development without providing the right infrastructure, approach and management is a recipe for failure Source: Leveraging resources in global software development Battin, Crocker, Kreidler, Subramanian, Software, IEEE

21. 21 How Tightly Should Multiple BW Projects be Controlled? Source: The Conference Board Survey The relationship between global control and success: 88% Successful 30% Successful Loose Cooperation (38%) Independent (38%) Tight Central Control (24%) 100% Successful Coordination of Multiple Data Warehouse Projects

22. 22 Six ways to organizing the Global BI development effort The more distributed the SAP BI development effort becomes, the more difficult it is to maintain communication and get cohesive requirements.

23. 23 Where Are We? Why build a global BW system? Designing a global BW architecture The six dimensions of global BW project management Global BW project examples  An in-depth look at a global Telecom  A global industrial company  A glance at four other global BW implementations Getting the team together Lessons learned: global BW project management Wrap-up

24. 24 Fortune 100 company with operations around the world 230 systems identified as “mission critical” 23 installations of SAP R/3 on 6 continents Other ERP systems:  JD Edwards  Custom-developed Oracle systems Let’s Look at a Global BW Project Example A case study

25. 25 Data Warehouse Initiatives These were the DW initiatives that corporate HQ knew about A case study

26. 26 Alternative Global BW Approaches C ONTINUE TOP-DOWN APPROACH Build a global data warehouse for the company, and proceed sourcing data from old legacy systems driven from a top- down approach. C HANGE BOTTOM-UP APPROACH Focus on a bottom-up approach where the BW project will prioritize supporting and delivering local BW solutions, thereby setting the actual establishment of the global Data Warehouse as secondary, BUT not forgotten.

27. 27 Bottom-Up Approach Rationale

28. 28 SAP BW Rollout Approach The project delivered local SAP BW solutions and packaged solutions for decision support as a first priority, and the Global Data Warehouse as a second priority. A “fixed departure approach” was applied with focus on delivering solutions rather than projects and software; specific BW solutions were developed according to a pre- defined schedule where local business units were invited or encouraged to participate. C HANGE “Bottom-Up Fixed Departure” Departure I - 3 months Departure II - 3 months Departure III - 3 months Departure IV - 3 months

29. 29 A Global Rollout – a Different European Example In this case, the company created both a local and global BW system for CRM data Switzerland Austria Turkey Global Development Spiridon/CRM others BW Belgium Spain Portugal others CRM (one client) Ireland UK Netherland s others Local AMC/Dev Spiridon /CRM Local AMC/Dev Spiridon /CRM SpiridonCRM South West (Madrid) BW Local AMC/Dev Spiridon /CRM SpiridonCRM North West (Den Haag) BW Local AMC/Dev e.p@ss /CRM e.p@ssCRM Mid South (Wien) BW Source: Siemens Corp information

30. 30 Some Lessons Learned From Other Global Implementations The major findings highlight the need for specialized BW skills and very strong scope control…

31. 31 Example Summary A conceptual architecture is the first step and the physical architecture is a product of this. It should be driven by the user needs and the types of interfaces needed, and not by an internal IT exercise. SAP BW can now be used as an enterprise Data Warehouse and a Global rollout can be accomplished. There are two core ways to succeed, but both require strong central control and support.

32. 32 Where Are We? Why build a global BW system? Designing a global BW architecture The six dimensions of global BW project management Global BW project examples Getting the team together Lessons learned: global BW project management Wrap-up

33. 33 Practical Tips: Getting The Global Team Together Involve relevant business departments, regardless of organizational and geographical boundaries.  Create a user acceptance team with a total of 5-7 members from the various business departments or organizations. Keep the number odd to assist with votes when decisions are made. With fewer than 5 members it can be hard to get enough members present during some meetings.  Make the team the focus of requirements-gathering in the early phase and let this team later become the user acceptance team (testing) in the realization phase.  Meet with the team at least once a month during realization to refine requirements as you are building and have something to show the team. This approach is hard to execute when also managing scope, but essential to make sure the system meets the requirements

34. 34 Basis and functional R/3 support 15-25 team members and normally 6-18 months duration depending on scope These are roles not positions. (sometimes one team member can fill more than one role) Tip: Keep back-end developers centralized, while query developers can be de-centralized…. Practical Tips: Getting The Global Team Together (cont.)

35. 35 Sleep, Travel and Time Zones….. People crossing 4 or more time zones need over 36 hours to adjust! This increases to over 72 hours when crossing 6 or more time zones. Some simple rules to address this:  Create a "project time" in the middle. I.e. for European and US projects, middle time would be Eastern US time +3 hrs, and European central times less 3 hours. No meetings would be scheduled between 8-11am in Europe, nor between 2-5pm in the US.  Fly to the destination the day before, or allow at least 4 hours downtime for sleeping and showering at the hotel.  Don’t schedule meeting times around when people are traveling.  Keep each trip over 5 days minimum to adjust for sleep, or risk running the team "into the ground"…  Plan extended weekends for family time for staff after a long trip (including consultants)… Source: Leveraging resources in global software development Battin, Crocker, Kreidler, Subramanian, Software, IEEE

36. 36 Effort, Duration and Mistakes on Global BI Projects Source: “Planning and improving global software development process” by Setamanit, Wakeland, Raffo, May 2006, international workshop on Global software development Recent research have demonstrated that global projects that spends more days (duration) on similar tasks, have less defects and less re-work. Since team members are more likely to work on multiple tasks not related to the project, longer durations on developing the SAP BI system does not mean more effort (i.e. work hours).

37. 37 Global Project Risk Mitigation Strategies L - Limitations (what are the assumed, existing and design limitations) A - Assumptions (what assumptions are made, and what happens when these assumptions are no longer true?) R - Risks (what are the risks created by this approach, what are the impacts of failure, and how can these risks be minimized) Developers, designers and business analysts should be forced to write at least one paragraph on each of these item. It forces new thinking as well as the constant questioning of assumptions (which may not be accurate). State 3 items in every design, budget and final deliverable:

38. 38 Global Project Risk Mitigation Strategies Add 15% more project time for travel and adjustments Rotate travel so that the stress is more evenly distributed on the team Plan to spend 5-10 days at the beginning of the project to level set and build trust and social networks before the real work begins. Create a formal escalation process of issues related to the project and make sure one culture does not dominate. Select a project language formally and make sure all team members are proficient in it. Spend time rewarding inter-team cooperation and create opportunities for promotion within and outside both teams (“cross pollinate”)

39. 39 The Use of Local “Ambassadors” Getting power users involved early is important to the overall success of a Data Warehousing project. To help support the businesses that have already gone live, a strong local community of “ambassadors” is needed. If you don’t have them, on-going projects may get “bogged down” with basic support of reports.

40. 40 Where Are We? Why build a global BW system? Designing a global BW architecture The six dimensions of global BW project management Global BW project examples Getting the team together Lessons learned: global BW project management  Project management  Team composition  BW Product  Other lessons Wrap-up

41. 41 Lessons Learned: Global Project Management A user acceptance team (UAT) of 5-7 people should be created from the first day, and all acceptance criteria should be established well in advance of the implementation Use of Rapid Application Development is the preferred development methodology Use a phased business content approach with standard delivered content first, then customize if absolutely needed It is hard to estimate accurately the data movement effort — 80% of delays and surprises occur in this area, and this work is often under-estimated Treat the workplan only as a tool and adjust it as needed Spend less time on the project preparation phase and as much as possible on the realization phase. Many issues cannot be planned, but time can be set aside to deal with them.

42. 42 Lessons Learned: Team Composition Developer training should start early for all project team members SAP R/3 skills are not easily transferable to BW — hands-on experience is needed (it’s hard to learn while being productive) The quality of the team members is much more important than the number of members. A skilled BW developer can accomplish in one day what 3 novice developers can do in a week. Project time and cost estimates should be based on teams’ experience levels Plan on formal knowledge transfer from external resources starting from day one. Link inexperienced members with experienced ones Have identified “go-to” resources available in all areas (make a list)

43. 43 Lessons Learned: The BW Product The time to develop BW will depend on how much customization was done when R/3 was installed The tool has a high learning curve and training cannot substitute for experience. Plan on spending 10-15% of overall effort on performance tuning of queries and data loads. Test the performance as part of the development effort. Implementation of LIS, SIS, EIS are no longer needed to use most standard extractors from BW, but most extractors are normally enhanced. Plan on using 50-60% of the project effort on data extraction, movement, validation, load, scheduling and testing.

44. 44 Use the statistics cube to monitor system performance and don’t forget to use the cost-based optimizer if you are using Oracle as your database Direct updates to InfoCubes (non-loads) are complex. If this is needed for reconciliation efforts, create a data staging area, make changes here and re-load the data. Direct cube updates for non SEM/ APO, SCEM cubes are hard to make work in practice. Do not succumb to using BW as a dumping ground - some reports belongs in R/3. Lessons Learned: The BW Product (cont.) Finally, do not attempt to “cram” all data into one cube. Keep InfoCubes logically organized and use multi-providers as needed.

45. 45 Other Lessons Learned Global user training should be custom-made and tailored to each country or region, and delivered by a local resource. A global line support organization should be established and be part of the development effort (knowledge transfer). Buy hardware early (international delivery times can delay the project) Locate the users as soon as possible and take a look at the network Finally, create “Ambassadors”, “road shows” and/or “brown-bag” sessions.

46. 46 Where Are We? Why build a global BW system? Designing a global BW architecture The six dimensions of global BW project management Global BW project examples Getting the team together Lessons learned: global BW project management Wrap-up

47. 47 Resources Global Project Management Handbook by David L. Cleland, Roland Gareis. Hardcover: 672 pages. McGraw-Hill Professional; ISBN: 0070113297 International Journal Of Project Management, Magazine Publisher: Elsevier Ltd ASIN: B00007AYDS The Distance Manager: A Hands On Guide to Managing Off-Site Employees and Virtual Teams by Kimball Fisher, Mareen Fisher. Hardcover: 252 pages Publisher: McGraw-Hill; ISBN: 0071360654

48. 48 7 Key Points to Take Home Use the 6 global dimensions framework to guide your BW development Plan for a truly Enterprise Architecture that is designed, not evolved Spend much time on getting the right resources on your team Involve the local staff in a proactive manner and make them part of your leadership team. Don’t re-invent the wheel — use experienced resources that have done it before and pay particular attention to management styles, politics and culture. Conduct post-implementation reviews with each local organization in order to learn from experience and to give the subsidiaries a voice in how the project is executed. Consider an "ambassador" concept to assist in local support and buy-in.

49. 49 Your Turn!!! How to contact me: Bberg@MyITgroup.com