Business intelligence: Putting enterprise data to workgraphics.eiu.com/upload/portal/Oracle.BizIntel.pdf · A paper from the Economist Intelligence Unit sponsored by Oracle Business

A paper from the Economist Intelligence Unit sponsored by Oracle

Business intelligence:Putting enterprise data to work

© The Economist Intelligence Unit 2007 �

Business intelligence: Putting enterprise data to work

Business Intelligence: Putting Enterprise Data to Work is an Economist Intelligence Unit white paper, sponsored by Oracle. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team wrote the report, and the findings and views expressed do not necessarily reflect the views of the sponsor. Dan Briody was the author of the report and Debra D’Agostino was the editor. Richard Zoehrer was responsible for layout and design.

Our research drew on two main initiatives. We conducted a global online survey in August 2007 of 245 executives from various industries. To supplement the results, we conducted in-depth interviews with executives from around the world about the challenges and opportunities they face with regard to collecting, analysing and sharing business intelligence data. Our thanks are due to all interviewees for their time and insights.

November 2007

Preface

� © The Economist Intelligence Unit 2007


Executive summary

n the digital age, one would be hard-pressed to find a company that does not aim

to mine and analyse business information—whether it’s data about customers, competitors, or current events that could disrupt operations—to make better judgments and decisions. From supply chain management to enterprise resource planning to customer service, business intelligence (BI) is critical to ensure that executives, managers and even front-line agents operate with a clear understanding of what’s really going on in and around their company.

Indeed, 85% of respondents to this survey say that when business data are made available throughout their firm, the impact on financial or operational performance is significant or very significant. As with most large endeavours, however, putting BI data to work is easier said than done. Most respondents admit their companies still struggle to make the right information available to the right people, create standards to allow data sharing across divisions and departments, and convince employees to adopt new tools that will make connecting information easier. This paper aims to understand better the current state of business intelligence efforts, the challenges companies face in executing strategies, and how executives expect these efforts to play out over the coming years. The major findings are as follows:

l Executives see the value of widespread access to business data, and believe it has a direct bearing on their companies’ ability to attain strategic goals. Nearly 80% say a business intelligence (BI) strategy would significantly improve their company’s ability to react quickly to market changes and improve customer service, and more than half say greater business intelligence would grow revenue.

l Yet legacy issues continue to impede most firms’ ability to disseminate business intelligence properly. Fifteen percent of survey respondents feel their organisation has applied best practices to its use of business data over the last three years. Silos continue to be the biggest challenge in sharing data, and 63% say they need enterprise-wide data classification standards to make data sharing easier—particularly in relation to historical data.

l New obstacles, such as data access and cleanliness, are also problematic. While 69% of respondents say executives have access to business intelligence data at their own discretion, only about half of front-line and middle managers do. And though 84% report that senior managers are “proactively provided with business data”, that figure drops to 54% for middle managers. Only 22% of respondents say that all employees are given business data. Meanwhile, data cleanliness is another issue: 41% of respondents cite incomplete or error-prone data as one of their biggest challenges with regard to business intelligence.

l Employees resist adopting newer technologies to analyse data. When asked from what sources

I

As with most large endeavours, business intelligence is easier said than done



Introduction: Making data pay

he last ten years have been nothing less than a data deluge. Companies

of all shapes and sizes are producing and collecting business information at a staggering rate. They struggle to organise it all, as the data points pour in from every corner of the business, both internally and externally. They know the information has value, that it can help them boost sales, increase profits, and grow market share. But all too often the data sit, uncategorised, undistributed, and unused in far-flung repositories, collecting virtual dust. Many executives express frustration with the fact that the rate of data collection far exceeds their company’s ability to make sense of the data. But

T

respondents typically receive business information, business intelligence software comes in dead last, at a mere 13%. Roughly 46% of respondents say they have BI tools in their organisation, but their employees lack the proper training to use them. Another 30% say they hesitate to give BI tools to employees for fear of those employees misinterpreting the data. Meanwhile, spreadsheets remain a popular mechanism for business intelligence, albeit an old one: 78% of respondents claim they use the 25-year-old technology to receive their business data.

l Companies too often cut the CIO from the decision-making process. Only 22% of respondents say their chief information officer (CIO) is responsible for their business intelligence strategy; most often it is the chief operating officer (COO), or other line-of-business

managers who call the strategic shots. Best-practice companies are significantly more likely to have their CIO in charge of business intelligence than those that struggle with BI. Indeed, 46% of respondents feel that information technology (IT) needs to improve the alignment of BI data with the overall business strategy.

l For BI success, companies should adopt traits of best-practice companies. Respondents who say their company’s BI efforts have been successful are also more likely to agree that their companies make business data widely available throughout the organisation than respondents whose companies struggle with BI. Successful companies have also made greater progress with data classification standards, and are more likely to report that their company’s strategy is led by a C-level executive—most often the COO.

When business data is effectively made available throughout the enterprise, how would you characterise the impact on your company’s financial or operational performance?

Very significant 24%

Significant 61%

Not significant 10%

Not applicable 1%

Don’t know 5%



while this trend may be horribly vexing to corporate executives, the fact that they continue to collect data is telling: a full 85% of respondents say that when business data are effectively made available throughout their enterprise, the impact on their company’s financial or operational performance is either significant or very significant. (See chart, pg 5) Yet less than 15% of those same respondents feel their organisation has applied best practices to its use of business data over the last three years. (See chart, below)

This suggests that proper analysis of and access to the sea of business data lying fallow in corporate data stores would go a long way towards achieving strategic business goals. Those goals can vary widely, of course, as can the methods of putting the data to use. But the impact of well-used information is clearly understood: 53% of respondents believe that better business intelligence would help grow revenue, 45% say it would increase profitability, and 40% report it would improve customer service and loyalty. (See chart, right) There are many challenges to putting business data to work. Data often reside in disparate systems throughout large enterprises. In many firms, they are not recorded in any standardised way. There

tends to be a lack of leadership when it comes to executing a business intelligence strategy. And employees are still inexplicably attached to cruder, more familiar technologies (such as spreadsheets) for working with data sets, hesitating to consider the more sophisticated technologies that exist today. These older technologies exacerbate the data silo problem by creating many different “versions of the truth” residing on desktops throughout a company. But there is much to be learned from the 15% of respondents who claim their companies apply best practices. By developing a strategy that includes executive leadership and execution, proper technology and forward-thinking data policies that ease data sharing, a handful of companies have been able to wring every last drop of value from the vast seas of data they retain.

How would you characterise your organisation’s use of business data over the past three years?

We apply best practices 15%

We aim to adopt best practices 41%

Business intelligence remains a challenge 36%

Business intelligenceis not a priority 6%

Don’t know 2%

How do you think greater business intelligence would most benefit your company? (Select up to three)

Revenue growth

Increase profitability

Improve customer service/loyalty

Reduce costs

Increase market share

Drive innovation

Strengthen relationships with key stakeholders

Strengthen corporate brands

Improve the process of mergers and acquisitions

Other

45%

36%

36%

18%

7%

5%

1%

53%

60

30

15

7.5

36%

40%

© The Economist Intelligence Unit 2007 7


o fully understand the issues that hold organisations back in their use

of business data, we asked our survey respondents specific questions about the obstacles they encoun-ter. These fall into two categories: problems resulting from legacy systems and strategies, such as data silos and a lack of standard data definitions; and a new breed of challenges, including governance, informa-tion hoarding and cleanliness of data. The former are problems that existed before the extensive collection and analysis of real-time business data was seen as strategic (this may seem prehistoric to some, but it wasn’t more than 15 years ago that the value of business information was widely misunderstood). The latter came about as a result of the increasingly important role of data in the enterprise. Each set of problems must be understood and addressed if busi-ness data are to be used effectively.

Legacy issuesThe first set of problems is a legacy of a time when the importance of properly organising data was largely underestimated. More than 63% of survey respondents say that their company lacks the proper enterprise-wide data classification standards needed to make sharing important business information easier. (See chart, right) “It’s not just that the data are separate that makes this difficult,” says Dr Lynn Vogel, vice president and CIO at MD Anderson Cancer Center, a 17,000-employee research and treatment centre run by the University of Texas. “It’s that the definitions and the terms are all different.” For example, what one doctor might call hypertension, another may call high blood pressure. “Five patient

records could all be talking about the same thing, but a search wouldn’t find all of them,” he says. Unfortunately, there is no easy fix for reconciling historical data across an organisation. Nor is there is an easy answer to the number one business intel-ligence challenge identified by respondents: data

Do you agree or disagree with the following statements?

Our company lacks proper enterprise-wide data classification standards that would make sharing information easier

We have business intelligence tools, but our employees are not properly trained to use them

We are concerned that sensitive data will fall into the hands of our competitors if we share it with third-party stakeholders

We are concerned that sensitive data will fall into the hands of our competitorsif we share it with employees

We hesitate to give our employees access to business intelligence tools because they do not know how to properly interpret data

A business intelligence strategy would significantly improve our company’s ability to react quickly to market changes and improve customer service

1 Agree

2 Disagree

3 Don’t know

63% 32%

10050

2512.5

5%

46% 41% 13%

60% 30% 10%

43% 51% 7%

30% 60% 10%

79% 13% 8%

The many pitfalls of data dissemination

T “Five patient records could all betalking about the same thing, but a search wouldn’t find all of them.”

Dr Lynn Vogel, vp and CIO, MD Anderson Cancer Center



silos. Nearly half of the executives who answered the survey say that data residing in disparate systems is the biggest challenge to making effective use of data in their company. (See chart, right) “We have very good pockets of data,” says Kevin Bott, senior vice-president and CIO at Ryder, a US$6.5bn trans-portation, logistics and supply chain company. “But we don’t have an enterprise-wide data governance system in place. We are working on that.”

New obstaclesToday, companies recognise the importance of collecting and organising business data. But this awareness comes with new challenges. For example, data governance—deciding who gets what informa-tion and when—is a politically charged issue within

From your perspective, what are your company’s biggest challengeswith regard to business intelligence? (Select up to three)

Data resides in disparate systems

Data is often incomplete or has errors

We don’t get information fast enough to take action

Employees are too busy to use business intelligence tools

Employees receive too much unnecessary business data

Corporate executives do not understand the need for employees to have access to business intelligence tools

Our business intelligence tools are too complicated

Corporate executives are unwilling to share data with external third parties

Other

None of the above; there are no challenges

41%

25%

21%

15%

10%

3%

2%

48%

50

25

12.5

7

36%

38%

To Jeff Neville, chief information officer

(CIO) of outdoor gear retailer Eastern

Mountain Sports, technology is great—but

people are even better. Mr Neville is fond of

a story about how his business intelligence

software was picking up on some exceptional

sales of footwear in one particular store. The

software was able to see the spike in sales,

but not make the connection to why the

spike was happening. After some investiga-

tion, Mr Neville’s team discovered that the

store had hired a “footwear guru” who was

particularly adept at upselling customers on

socks and other items. “That’s where the

human element comes in,” says Mr Neville.

“The data were there, but that was only part

of the puzzle. It required someone to make

a mental connection, and put the

other pieces of the puzzle together.”

As such, Mr Neville is keen on

increasing the human element in

putting business data to work. Be-

cause so many of EMS’s employees

are familiar with web 2.0 technologies, like

RSS feeds and mashups, he would like to see

as many employees as possible given access

to business intelligence tools. But he would

also like them to be able to mash those

tools up with other services, to create new

data points, generate new hypotheses, and

share those hypotheses throughout the

company. “Instead of just having one person

make these connections, we want to have

more of a distributed mindshare,” says Mr

Neville. “I want my user commu-

nity to be able to treat business

intelligence like their Google home

page: take the operational data and

mix them up with weather.com,

for example, to see what kind of

hypotheses we can come up with.”

Mr Neville says the potential for this

kind of liberal data policy is possible be-

cause of a new generation of workers that

is more comfortable with technology and

has an expectation of corporate transpar-

ency. “I watch these new MBAs come into

work in the morning, and the first thing

they do is pick through their RSS feeds.

Why can’t they be getting RSS feeds from

the merchandising system?” n

The Human Element: Eastern Mountain Sports



many enterprises. Power struggles between finance, operations and IT are not uncommon. As a result, ownership of fragmented parts of the overall business intelligence strategy is scattered across the corpo-rate landscape. Though chief operation officers are the most common owners of data strategy, data are frequently managed on a project-by-project basis, by line-of-business managers, or by no one at all. It’s hardly a wonder that business data are often poorly distributed throughout companies as a result of this splintering. Those employees who understand the power of information will often “hoard” it, creat-ing their own data sets to support their pet busi-ness cases. This contributes to the “siloing” of data. Furthermore, in the instances where a consistent set of enterprise data is made available, it is most often shared with the executive suite only, and not broadly disseminated throughout an enterprise. While nearly 85% of respondents say that business intelligence is proactively provided to senior management, only 55% say middle management is provided with information, followed by a meager 22% who say all employees are provided with information. Only 35% of respondents say their organisation regularly makes relevant business reports available to them. (See chart, below right) To make matters worse, the data that do exist are often inaccurate or incomplete. Even the most sophisticated business data delivery models won’t be effective when 41% of respondents believe that the data are no good. As companies have laid newer tech-nologies over troubled data stores, they are learning the extent to which the data have been neglected. Without good information to start with, even the best policies and technology are wasted. As data manag-ers are fond of saying: garbage in, garbage out.

Without good information to start with, even the best policies and technology are wasted.

How would you rate your organisation’s use of business data in driving your performance?

My company regularly distributes internal and external reports that bear relevance to my performance 35%

My company occasionally distributes internal and external reports that bear relevance to my performance 36%

My company never distributes internal and external reports that bear relevance to my performance 10%

My company leaves the obtaining and sharing of relevant business information up to individuals 17%

Don’t know 2%

Which business intelligence tools do you personally use to receive business data? (Select all that apply)

Spreadsheets

Dashboards and scorecards

Data mining

Query software

Production reporting software (OLAP)

Online analytical processing

Busines performance management software

Other

None of the above/do not use such tools

40%

21%

18%

17%

3%

6%

78%

80

40

20

10

22%

30%

10 © The Economist Intelligence Unit 2007


olving these daunting problems is a complex task. But while most chief

financial officers cringe at the notion of “throwing more technology at the problem”, there are cases in which it may make sense. According to survey data, respondents who consider their companies to have a successful business intelligence strategy also report that their companies are heavy users of business intelligence (BI) software. The obviousness of this contrasts starkly with overall survey results: when asked from what sources respondents typically receive business data, business intelligence software comes in dead last, at a mere 13%.

Why don’t more companies employ this resource? “This software is not easy to use,” says Jan Vink, Director of IT at Boekhandels Groep Nederland’s Selexyz, a ¤170m bookseller based in Holland. Mr Vink is repeating a common complaint about BI software. In fact, 46% of respondents say they have business intelligence tools in their organisation, but their employees lack the proper training to use them. In addition, 30% say they hesitate to give BI tools to employees for fear of those employees misinterpreting the data. This complexity issue is not just inconvenient,

it’s also expensive. Mr Vink uses his BI software for both financial planning and inventory tracking. But he laments the “hidden costs” of using BI software. “You cannot underestimate the effort you need to run this software,” he says. “You have to know that it will be a constant cost. There is a huge amount that we have had to invest in consultants, and there are still only two super users in our company.” There is ample evidence to suggest that employees, when given the choice, will default to the most familiar and simple way of receiving data. The resilient spreadsheet continues to dominate the business data landscape, with a resounding 78% of respondents claiming they use the 25-year-old technology to receive their business data. To some extent this is to be

How technology helps—and hampers

S From what sources do you primarily derive businessinformation and data? (Select up to three)

Market research reports

Newspapers, magazines and other media

The Internet

Customer feedback

Enterprise software systems (eg, ERP, CRM)

Conferences/networking

Co-workers

Business partners

E-mail

Business meetings

Business intelligence software

38%

25%

24%

22%

22%

21%

17%

13%

43%

50

25

12.5

7

31%

36%

“You cannot underestimate the effort you need to run this software.”

Jan Vink, director of IT, Boekhandels Groeup



expected: Spreadsheets have been a common tool for nearly three decades. But there is also a training issue at hand. Putting sophisticated software in the hands of non-technically oriented employees is a challenge at many organisations. At Ryder, Mr Bott is launching a large-scale project to train large swaths of employees on the company’s business intelligence software, in an effort to ease the burden on IT and increase the usefulness of the company’s business data. “We are trying to do a self-service philosophy,” Mr Bott says. “We are training people to generate their own reports, so they can go into the software and tweak things themselves, modify the look and feel. Once they get familiar with it, we hope they will stop using spreadsheets.” Of course, that kind of autonomy can create

liabilities. At British Telecom, Mandeep Hansra, who heads the firm’s business intelligence strategy, is on a mission to reduce the number of reports produced throughout the company, whether they come through the company-sanctioned BI software or not. “There needs to be a single version of the truth, so we are challenging all business users, and asking them why they are producing different reports,

Managing a business using historical

data has been likened to driving a car using

only the rear-view mirror. That’s why Man-

deep Hansra, head of business intelligence

(BI) strategy at British Telecom Group, the

US$40bn telecommunications giant, believes

that his business intelligence software should

offer him more than just insights into the

past. “Rarely are people intelligent enough to

add value after the fact,” says Mr Hansra.

That’s why Mr Hansra is eager to put the

“intelligence” into business intelligence. “I want

to see BI tools that use the intelligence inher-

ent in the data, to connect process to data,

and start deducing standard output,” says Mr

Hansra. In other words, he would like the soft-

ware to be intelligent enough to

understand what a budget is, cal-

culate the cost of a purchase, and determine

whether or not the transaction should go

forward. “There’s no reason the system should

not be able to tell you when you are about to

go over budget, or even block someone from

doing that automatically. It doesn’t have to

happen after the event.”

This kind of real-time decision support

requires that a company not only have clean,

actionable data, but also a standard set of

processes and policies in place throughout

the organisation. Mr Hansra is realistic about

what is required in this scenario. “We’re not

talking about artificial intelligence here,”

says Mr Hansra. “But we

are talking about a maturity

level in the organisation. It would only work

if we were intelligent enough to set up the

budgets and operations in the right way. It’s

a combination of good software, clean data,

and smart planning.”

Cutting through the politics of an organisa-

tion the size of BT is no small task. But the

rewards for setting up such a pro-active, real-

time business intelligence system would be

huge. “All I really want to know is if bad news

is about to happen,” says Mr Hansra. “Don’t

tell me it’s already happened, and don’t tell

me good news. If I’m on plan, I don’t need to

know that, because I know what I’m doing.” n

Automate Me: British Telecom

“We are training people to generate their own reports, so they can go into the software and tweak things themselves.”

Kevin Bott, senior vp and CIO, Ryder



In the business world, bad data cost

companies money. But in the world of

healthcare, incomplete or inaccurate data

can cost lives. That’s why Dr

Lynn Vogel, vice-president and

chief information officer (CIO)

at MD Anderson Cancer Center,

a 17,000-employee research

and treatment centre run by

the University of Texas, is rather

intolerant of data cleanliness

issues. “Standardisation of terminology and

vocabulary is one of the big problems we

have,” says Dr Vogel. “Accountants pretty

much speak the same language, but that’s

not true in healthcare.”

What is particularly galling to Dr Vogel

is when colleagues disagree over whose

data are best, and which data

sets should be used for making

decisions. “You have to take those

arguments out of the equation,”

he says. “It’s a fruitless waste of

time.” At MD Anderson, it was the

finance department that finally

catalysed an organisational effort

behind standardising data and terminology.

But the process of defining the data was

collaborative. “The finance guys take the

lead, but the operations guys are heavily

involved,” says Dr Vogel. “You don’t want

either defining everything.”

It is an ongoing process at MD Anderson,

which, like most other organisations, is strug-

gling to remediate legacy data that does not

fit the new standards defined by the finance

and operations collaboration. As for IT’s role?

“My job is to ensure that the data are cor-

rect and accurate,” says Dr Vogel. “We don’t

want people to go out and develop their own

data, we want them looking at the same sets

of data. But if they do take the information

and put it on their desktop and do lots of

interesting things with it, at least we know

the data are clean.” n

Data Scrubs: MC Anderson Cancer Center

making sure that they really need these reports to do their jobs,” Mr Hansra says. BT has gone from generating 2,000 standard reports to just 48 since Mr Hansra began his crusade. “When you get it down to that number, if you want to download it into an Excel spreadsheet, be my guest. We know the data are clean.” Other frustrations with BI software cited by survey respondents include concerns that sensitive information will fall into the wrong hands, either

within the company, or outside of it. (See chart, pg 13, top) “At this point, we are very reluctant to open up our data to outside partners,” says Dr Vogel. “We even have a patent on our economic forecasting model. We consider it to be intellectual property.” End-users also complain that the data they receive are not properly aligned with the strategic goals of the company.

The critical role of ITBecause sharing business data across an enterprise is fundamentally a technological challenge, it stands to reason that the CIO would be intimately involved in any process that affects that goal, perhaps even leading those efforts. It is surprising, therefore, that only 22% of respondents say their CIO is responsible for their business intelligence strategy. In this day of supposed IT alignment with the business side, it is telling that IT so often plays a supporting role, while most often it is

Other frustrations with BI software cited by survey respondents include concerns that sensitive information will fall into the wrong hands

© The Economist Intelligence Unit 2007 1�


the chief operating officer, or other line-of-business managers who call the strategic shots. But cutting the CIO out of the decision-making process is a mistake. Best-practice companies are significantly more likely to have their CIO in charge of business intelligence than those that struggle with BI. The operations and finance side of the business may be the heaviest users of business intelligence, but that doesn’t mean that the CIO should not be the one setting the strategy. “My team owns the data and the data warehousing area, and I’ve got close to 20 full-time employees working on that,” says Mr Bott of Ryder. “Our chief operating officer is probably the heaviest user of the data, but my team, working with the business teams, defines the strategy.” At British Telecom, Mr Hansra’s job is neither technical nor strategic. “I’m there to provide functionality,” he says. This sets Mr Hansra up as a liaison between the IT and business. In this role, he is privy to the many complaints the business side has of

IT’s role in the distribution of business data. Indeed, more than 46% of respondents to the survey feel that IT needs to align BI data better with the overall business strategy. And the same amount feels that IT does not understand end-user needs. “My customers are younger and more tech-savvy than ever before,” says Jeff Neville, CIO at Eastern Mountain Sports (EMS), a sports equipment retailer based in New Hampshire, of his internal IT customers. “It’s a whole different user group that we need to adapt to.”

How could IT make business intelligence systems more useful?(Select up to three)

Better align business intelligence data with the overall business strategy

Better understand end-user needs

Improve data quality

Better integrate disparate systems, software and tools

Improve training on software

Make it easier for users to personalise these systems

Standardise data so it can be easily shared across all platforms

Improve the user interface

Upgrade overall systems

Increase the user’s choice on how to receive BI (eg, mobile, search, web app)

Other

Don’t know

46%

16%

16%

15%

15%

1%

7%

10%

10%

46%

50

25

12.5

6+

36%

38%

“My customers are younger and more tech-savvy than ever before. It’s a whole different user group that we need to adapt to.”

Jeff Neville, CIO, Eastern Mountain Sports

Who at your company has access to technology that allows them to access business intelligence data quickly and at their own discretion? (Select all that apply)

Executives

Front-line managers

Middle managers

Planning staff

None of the above

Don’t know

56%

7%

5%

69%

70

35

17.5

9

49%

51%

1� © The Economist Intelligence Unit 2007


Leveraging access and senior leadership

ompanies seeking to boost the value they get from their data can

benefit from some best practices that emerge from a crosstabulated analysis of the survey results. For example, best-practice companies are far more likely to make business data widely available throughout the organisation. “We have 700 full-time employees, but only about 35 of them have access to the data,” says Mr Vink. “Of course I would like to get the data into the hands of more people. That’s the only way to eliminate all the spreadsheets.” Particularly when it comes to making data available to lower levels of the organisation, such as planning staffs, there is a significant difference between those companies that apply best practices and those for which business intelligence is not a priority.

C

There are some important differences

between the way that large enterprises

(those with revenue greater than US$1bn)

and small enterprises (those with less than

US$1bn in revenue) go about collecting and

distributing business data. For one thing, big

companies are better at it. A full 21% of large

enterprises consider say they apply best prac-

tices, compared with 15% for all companies.

So what do they do that small enterprises

don’t? They like technology. More than half of

big companies prefer to receive business data

through an enterprise portal or intranet, and

37% say they like to use business intelligence

software. That compares with 31% and 23%,

respectively, among small enterprises. Also,

respondents from big companies are much

more likely to use dashboards and scorecards

(55%) than those from small companies (29%).

Another important difference is how

widespread the access to business data is.

For example, large companies are much

more likely to distribute internal and ex-

ternal reports regularly (43%) than smaller

companies (28%). In fact, a full 70% of small

companies say they either occasionally or

never distribute reports that are relevant to

their performance, or leave the obtaining of

business information up to individuals.

And finally, small companies struggle

with getting upper management to make

business data available: 28% of small busi-

nesses say their executives don’t under-

stand the need for employees to have

access to business tools, compared with

13% in large enterprises. n

Data management: Size Matters

Who is responsible for your company’s business intelligence strategy? (Select all that apply)

Chief Operating Officer

Chief Information Officer

The person responsible varies on a project-by-project basis

Business intelligence is handled by line-of-business managers

Director of business intelligence

Other C-level executive, please specify

Vice president of business intelligence

BI programme manager in the IT department

Other

None of the above/we have no corporate manager of business intelligence

Don’t know

22%

12%

10%

9%

6%

7%

2%

12%

39%

40

20

10

5

15%

17%



For Mr Neville, putting data into as many hands as possible increases the probability that useful insights will be discovered. “It’s the notion of how we can increase the human element,” says Mr Neville. “Instead of having one person making these connections, seeing the patterns in the data, putting things together and developing a hypotheses, we have more of a distributed mindshare.” For example, Mr Neville says, if a district manager notices a sales trend, he might pick up the phone and have a conversation with a store manager to determine the cause. But that conversation would stay siloed between those two individuals. “But we want to be able to save that conversation, share it across the enterprise, and connect the dots so that the next time you see that anomaly, you’re not starting from scratch.” It also bears noting that best-practice companies have made more progress towards data classification standards than those companies that struggle with business intelligence. “Having a clean, robust, single version of the truth is the starting point,” says Mr Hansra. “Without that, you’re putting lipstick on a pig.” Finally, executive leadership is a clear differentiator for companies with successful BI implementations. Survey respondents who consider their companies to apply best practices around business intelligence are also more likely to report that their company’s BI strategy is led by a C-level

executive—most often the COO. Mr Neville, who owns the BI strategy at EMS, consults an IT governance board to set the strategic direction of the company’s business data. That board includes the COO, chief financial officer, chief marketing officer and the five most senior vice-presidents. “That’s where the vision comes from,” says Mr Neville. “My job is to then take that vision and make it a reality.”

“Having a clean, robust, single version of the truth is the starting point. Without that you’re putting lipstick on a pig.”

Mandeep Hansra, head of business intelligence strategy, British Telecom



he data revolution is still in its early stages, so it is not altogether

surprising to see that few companies feel they are applying best practices to the distribution of data. And there is a certainly much work to be done to address decades of data neglect. Yet it is encouraging to see that standard best practices are beginning to emerge. A quick recap of business data best practices: l Clean your data—Reliable, accurate information is the foundation of any business intelligence strategy. Without it, even the best data strategy is useless.

l Leverage technology—Do not be afraid of technology solutions that are meant to extract more value from data stores. Good software can consolidate and centralise information. Outdated solutions like spreadsheets will only exacerbate data silos.

l Consult the IT department—Technology is going to be a critical element in the storing and distributing of data. As such, CIOs should be heavily involved in the creation of data strategy, and the implementation of a solution.

l Put data to work—Powerful information is useless unless it gets in front of the people that can use it. Younger employees are comfortable with technology and transparency. Let go to grow.

Together, these recommendations can help companies gain insight into their customers, products and processes to drive revenue, increase profits and grow market share. To obtain a deeper understanding around corporate data strategies, Mr Hansra at British Telecom recommends asking a few standard questions: Have we got the right information? How is the business using it? If they are using it, do they understand what they are seeing? These questions may seem elementary, but if executives cannot answer them, remedial steps are needed. Even companies that are light years ahead of the competition when it comes to the collection and dissemination of business intelligence recognise that this is only the beginning of a long relationship between companies and their data. “We are on a journey,” says Mr Hansra. “We have started; we haven’t finished.”

Conclusion

T


Appendix: survey results Business intelligence: Putting enterprise data to work

Appendix: Survey results In August 2007, the Economist Intelligence Unit conducted a global online survey of 245 executives from various industries. Please note that not all answers add up to 100% because of rounding or because respondents were able to provide multiple answers to some questions.

How does your company measure its performance?

My company uses specific metrics to consistently measure performance against well-defined strategic goals, both financial and operational 64%

My company measures overall performance using only financial results on a quarterly basis 24%

My company measures performance by shareholder return 4%

My company does not measure performance against specific strategic goals 6%

Don’t know/other 2%

Which of the following are your company’s priorities today?(Select three)

Revenue growth

Increasing profitability

Reducing costs

Increasing market share

Improving customer service/loyalty

Driving innovation

Strengthening relationships with key stakeholders

Strengthening corporate brands

Completing mergers and acquisitions

Corporate social responsibility

49%

29%

25%

14%

12%

12%

5%

61%

70

35

17.5

9

36%

45%

Which of the following are likely to be your company’s priorities in the next three years? (Select three)

Increasing profitability

Revenue growth

Driving innovation

Increasing market share

Reducing costs

Improving customer service/loyalty

Strengthening relationships with key stakeholders

Strengthening corporate brands

Corporate social responsibility

Completing mergers and acquisitions

48%

28%

27%

19%

16%

16%

13%

49%

70

35

17.5

9

31%

31%

From what sources do you primarily derive businessinformation and data? (Select up to three)

Market research reports

Newspapers, magazines and other media

The Internet

Customer feedback

Enterprise software systems (eg, ERP, CRM)

Conferences/networking

Co-workers

Business partners

E-mail

Business meetings


38%

25%

24%

22%

22%

21%

17%

13%

43%

50

25

12.5

7

31%

36%



How effectively do these departments use business intelligence (BI) data at your company? (Rate on a scale of 1 to 5 where 1 = Consistently leverages business information to drive performance and 5 = Does not leverage business information to drive performance)

Finance

Sales

Marketing

Administrative

20%23%

26%13%

11%7%

9%

5%

19%29%

28%9%

11%

7%

25%27%

22%8%

17%

25%

6%12%

22%19%

5025

12.56+

Human resources

Research & development

Production

Customer service

1 Consistently leverages

2

3

45 Does not leverage

Don’tknow

6%12%

23%23%

21%15%

16%

6%

19%29%

19%11%

22%

11%

9%22%22%

13%

17%

8%

13%24%24%

15%

How would you rate your organisation’s use of business data in driving your performance?

My company regularly distributes internal and external reports that bear relevance to my performance 35%

My company occasionally distributes internal and external reports that bear relevance to my performance 36%

My company never distributes internal and external reports that bear relevance to my performance 10%

My company leaves the obtaining and sharing of relevant business information up to individuals 17%

Don’t know 2%

How would you characterise your organisation’s use of business data over the past three years?

We apply best practices 15%

We aim to adopt best practices 41%

Business intelligence remains a challenge 36%

Business intelligenceis not a priority 6%

Don’t know 2%



From which departments do you need regular business data updates in order to improve your own performance? (Select all that apply)

Marketing

Sales

Finance


Customer service

Production

Human resources

Administrative

Other

None of the above/don’t know

62%

40%

37%

18%

17%

2%

2%

62%

70

35

17.5

9

47%

58%

Which departments regularly make their business data available to you? (Select all that apply)

Finance

Sales

Marketing


Production

Customer service

Administrative

Human resources

Other

None of the above/don’t know

52%

30%

26%

19%

14%

2%

9%

53%

70

35

17.5

9

36%

48%From your perspective, what are your company’s biggest challengeswith regard to business intelligence? (Select up to three)

Data resides in disparate systems

Data is often incomplete or has errors

We don’t get information fast enough to take action

Employees are too busy to use business intelligence tools

Employees receive too much unnecessary business data

Corporate executives do not understand the need for employees to have access to business intelligence tools

Our business intelligence tools are too complicated

Corporate executives are unwilling to share data with external third parties

Other

None of the above; there are no challenges

41%

25%

21%

15%

10%

3%

2%

48%

50

25

12.5

7

36%

38%

Who at your company has access to technology that allows them to access business intelligence data quickly and at their own discretion? (Select all that apply)

Executives

Front-line managers

Middle managers

Planning staff

None of the above

Don’t know

56%

7%

5%

69%

70

35

17.5

9

49%

51%



When business data is effectively made available throughout the enterprise, how would you characterise the impact on your company’s financial or operational performance?

Very significant 24%

Significant 61%

Not significant 10%

Not applicable 1%

Don’t know 5%

Which business intelligence tools do you personally use to receive business data? (Select all that apply)

Spreadsheets

Dashboards and scorecards

Data mining

Query software

Production reporting software (OLAP)

Online analytical processing

Busines performance management software

Other

None of the above/do not use such tools

40%

21%

18%

17%

3%

6%

78%

80

40

20

10

22%

30%

In which ways do you prefer to receive or gain access to business data? (Select up to three)

E-mail

Spreadsheets

Enterprise portal or intranet

Face-to-face meetings


Collaboration software

Search

Telephone meetings

Instant messaging

Mobility

Other

Don’t know

49%

29%

14%

10%

7%

7%

7%

2%

2%

55%

60

30

15

7.5

37%

41%

Do you agree or disagree with the following statements?

Our company lacks proper enterprise-wide data classification standards that would make sharing information easier

We have business intelligence tools, but our employees are not properly trained to use them

We are concerned that sensitive data will fall into the hands of our competitors if we share it with third-party stakeholders

We are concerned that sensitive data will fall into the hands of our competitorsif we share it with employees

We hesitate to give our employees access to business intelligence tools because they do not know how to properly interpret data

A business intelligence strategy would significantly improve our company’s ability to react quickly to market changes and improve customer service

1 Agree

2 Disagree

3 Don’t know

63% 32%

10050

2512.5

5%

46% 41% 13%

60% 30% 10%

43% 51% 7%

30% 60% 10%

79% 13% 8%



Who is responsible for your company’s business intelligence strategy? (Select all that apply)

Chief Operating Officer

Chief Information Officer

The person responsible varies on a project-by-project basis

Business intelligence is handled by line-of-business managers

Director of business intelligence

Other C-level executive, please specify

Vice president of business intelligence

BI programme manager in the IT department

Other

None of the above/we have no corporate manager of business intelligence

Don’t know

22%

12%

10%

9%

6%

7%

2%

12%

39%

40

20

10

5

15%

17%

How involved is your company’s IT department in making decisions about business intelligence tools?

IT makes final decisions regarding which tools we use 15%

IT is involved in the discussion, but does not make decisions 44%

IT reviews decisions made by line-of-business managers 11%

IT is not involved in the discussion 17%

Don’t know 14%

How does your company primarily measure overall corporate performance?(Select up to three)

Performance is based on:

Bottom-line revenue

Top-line growth

Customer satisfaction

Employee productivity

Market share

Share price

Our ability to follow Six Sigma or other business improvement strategy

Credit rating

Environmental impact

Other

Don’t know

61%

29%

16%

6%

3%

3%

3%

1%

2%

62%

70

35

17.5

9

32%

42%

How do you think greater business intelligence would most benefit your company? (Select up to three)

Revenue growth

Increase profitability

Improve customer service/loyalty

Reduce costs

Increase market share

Drive innovation

Strengthen relationships with key stakeholders

Strengthen corporate brands

Improve the process of mergers and acquisitions

Other

45%

36%

36%

18%

7%

5%

1%

53%

60

30

15

7.5

36%

40%



How could IT make business intelligence systems more useful?(Select up to three)

Better align business intelligence data with the overall business strategy

Better understand end-user needs

Improve data quality

Better integrate disparate systems, software and tools

Improve training on software

Make it easier for users to personalise these systems

Standardise data so it can be easily shared across all platforms

Improve the user interface

Upgrade overall systems

Increase the user’s choice on how to receive BI (eg, mobile, search, web app)

Other

Don’t know

46%

16%

16%

15%

15%

1%

7%

10%

10%

46%

50

25

12.5

6+

36%

38%

To which stakeholders does your organisation proactively provide business intelligence? (Select all that apply)

Senior management

Middle management

All employees

Shareholders

Customers

Suppliers

Activist groups

Other

55%

11%

7%

2%

3%

85%

100

50

25

12.5

14%

22%

In which region are you personally based?

Asia-Pacific 32%

North America 28%

Western Europe 25%

Eastern Europe 6%

Middle East and Africa 5%

Latin America 4%

What is your primary industry?

Financial services

Professional services

IT and technology

Healthcare, pharmaceuticals and biotechnology

Telecommunications

Manufacturing

Energy and natural resources

Government/Public sector

Education

Entertainment, media and publishing

Chemicals

Consumer goods

Construction and real estate

Transportation, travel and tourism

Retailing

Logistics and distribution

Aerospace/Defence

Aerospace/Defence

Agriculture and agribusiness

Logistics and distribution

11%

23%

12%

8%

7%

5%

5%

4%

4%

4%

3%

3%

3%

3%

2%

2%

1%

20

10

5

2.5



What are your company's annual global revenues in US dollars?

$500m or less 40%

$500m to $1bn 13%

$1bn to $5bn 15%

$5bn to $10bn 7%

$10bn or more 25%

What is your title?

Board member

CEO/president/managing director

CFO/treasurer/comptroller

CIO/technology director

Other C-level executive

SVP/VP/director

Head of business unit

Head of department

Manager

Other

3%

4%

23%

2%

4%

9%

10%

10%

24%

12%

30

15

7+

4

What are your main functional roles? (Choose up to three)

General management

Strategy and business development

Marketing and sales

Finance

R&D

Customer service

IT

Operations and production

Risk

Information and research

Human resources

Legal

Procurement

Supply-chain management

Other

28%

37%

33%

26%

14%

14%

13%

12%

11%

9%

3%

2%

2%

2%

2%

40

20

10

5

While every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor the sponsor of this report can accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in the report.

LONDON26 Red Lion SquareLondon WC1R 4HQUnited KingdomTel: (44.20) 7576 8000Fax: (44.20) 7576 8476E-mail: [email protected]

NEW YORK111 West 57th StreetNew York NY 10019United StatesTel: (1.212) 554 0600Fax: (1.212) 586 1181/2E-mail: [email protected]

HONG KONG60/F, Central Plaza18 Harbour RoadWanchai Hong KongTel: (852) 2585 3888Fax: (852) 2802 7638E-mail: [email protected]

Documents

Business intelligence: Putting enterprise data to workgraphics.eiu.com/upload/portal/Oracle.BizIntel.pdf · A paper from the Economist Intelligence Unit sponsored by Oracle Business