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Operationalizing Business Intelligence -- Turning Insight into Action

by Bennett Indart
In this article we discuss “operationalizing” business intelligence, focusing on how to take the insights garnered from BI applications and processes and insert them directly into business operations to drive execution across the company.
Introduction

Business intelligence (BI) has become a central function and technology in the enterprise over the past decade as companies accumulate, manage, and analyze everincreasing amounts of data about customers, suppliers, parts, markets, and accounts. BI’s value has become even more evident as companies hold terabytes of data they must sort through for decision-making insights. From its inception, the business intelligence market has focused—with great success—on the problems of data integration and access for the sole purpose of informing business users about a particular business function or process within the enterprise.

For the most part, the analysis has been limited to readonly historical alerting, scorecards, and reporting from a departmental data mart or similar analytic architecture. The data is often homogenized and aggregated, leaving the direct access to the details back in the operational source system(s). Frequently, key information is exported from the system and analyzed off-line, requiring additional manual actions once a decision is reached.

Herein lies the primary problem addressed by transforming business intelligence from primarily a “read-only” analytic infrastructure to one empowered to assist more actively in the operational decision process.

Today, many traditional business intelligence companies are evolving their existing product offerings to address this need. They are embracing the notion of a broader market of process-oriented solutions known as performance management, driven by the desire to “operationalize” business intelligence.

The State of Enterprise Decision Making

Decisions today are still highly manual and disjointed, with BI solutions serving largely as reporting tools delivering read-only dashboards and structured reports of historical information snapshots. With terabytes of data in any given enterprise, and with data stockpiles growing rapidly, the ability to organize, manage, and analyze this data effectively can reveal significant opportunities and corrective actions for organizations. However, most insight gleaned from the operational systems that run the organization is isolated to the business function where it originated. It offers no understanding of how a decision will ripple across the organization.

For instance, consider managing payment terms for a company’s suppliers. An accounts payable manager may look at the figures and determine he will increase a supplier’s terms from 30 to 60 days, playing the float to improve his department’s performance. However, the impact on the supply base could negatively affect how some suppliers service the overall supply chain with potential decreases in quality or on-time delivery. The decision can produce a net negative result for the organization in both the short-term (because of a more volatile supply chain) and the long-term (due to lost sales). If only considered from a financial perspective, the notion of increasing payment terms might be seen as a fiscally responsible practice for the department, but the potential negative effect on the rest of the organization could be very high.

Combining Business Intelligence and Business Performance Management to Drive Decisions

Providing an operational component to the analysis, performance management enhances traditional BI by facilitating actionable changes from within the BI solution itself. These solutions enable business managers to deliver promised results consistently, quarter after quarter.

Performance management requires an environment that can continuously adjust the future operational direction, based on current performance—which is where business intelligence plays a crucial role. This ability to synchronize and tune planning and operations, integrated into an automated and standardized decision-flow framework, are the foundation of performance management platforms. These platforms provide an enterprisewide, accurate view of how decisions impact the organization and how an enterprise can make the most of its BI investments.

To make strategic decisions and ensure the entire organization— finance, operations, marketing, and supply—is aligned, companies need timely access to accurate information and an enterprisewide solution that enables them to analyze and collaborate on the right decisions. This consolidated environment is critical to creating business process efficiencies that can reduce operational cycle times (i.e., improved information sharing) and improve operational performance.

Allowing the BI solution to direct operational decisions compresses the time spent on decision making, and makes it possible to adjust to changing market conditions in real time. Breaking down the barriers between the business functions and their supporting systems to make more informed decisions can help drive the entire organization toward its goals. The key is being able to continuously adjust the future operational direction based on the analysis and monitoring of current performance.

In addition, leveraging and consolidating forecast and planning data directly from the source can create a single, holistic view of business goals and objectives that provides crucial cross-functional visibility. The value of BI can be magnified by establishing a seamless, rolling intersection of actual and plan data to produce an “on-demand” view of the business. Furthermore, the ability to update plans and create “what-if” scenarios on the fly based on evolving business conditions provides insight into the past and the future—to more clearly see the road ahead and meet goals (such as raising customer service levels or identifying new revenue opportunities). This all-encompassing approach to managing information and decisions translates into better organizational results; operationalizing BI across the enterprise brings real-time progress.

Building the Right Technology Foundation to Enable Operational BI Success

With so many disparate systems that must work together, and business units driven by different corporate goals, it’s important to begin with a platform that provides a flexible, interoperable, and powerful foundation for building cross-functional performance management and information management solutions for decision makers at all levels of the enterprise.

To be effective, the solution must incorporate decision-centric workflows, provide direct decision implementation, contain comprehensive and open APIs, produce powerful analytics, and offer integrated information management capabilities:

Decision-Centric Workflows
Configurable analytic workflow methodologies allow users to define best-practice cross-functional business processes. Analytic workflows encapsulate standard business processes (such as supplier rationalization, category management, promotion planning, and supply and demand matching) and are not to be confused with their more procedural counterparts (such as invoice approvals and order processing).

In addition, a closed-loop Web-architected performance management environment is required to deliver actionable business insight at the point of work. The right framework must also include multi-user collaboration on shared data sets for superior planning, analysis, and rapid distributed implementation back to the operational systems such as ERP, SCM, and CRM.

This application framework must offer tools for impact analysis of proposed decisions and formal approval routing to enforce business process controls. It should also offer advanced analytic capabilities as well as easyto- configure dashboards and performance indicators for at-a-glance performance insight.

Direct Decision Implementation
The ability to automate the end-to-end business process of analysis, decision review, and approval through actual execution is essential to operationalizing BI. Completed scenario analyses should be submitted as a decision for review and approval routing. Managers and business owners can review, compare, and prioritize decisions to ensure the appropriate decisions are implemented in the proper sequence. This type of solution helps track decision status and maintains an audit trail for each decision as approvals are completed. This also allows users to review previous decisions, see the assumptions made, understand the decision’s impact, and use past decisions to guide and improve current ones.

Directly writing decisions back to operational systems results in significant efficiencies, increased responsiveness to real-time problems and opportunities, andcross-organizational visibility. The ability to write approved decisions back to the source systems is an integral part of perationalizing BI. Here traditional spreadsheet management fails—where work is no longer tied to the system, errors are more likely and decisions are manual and disjointed. The ability to manipulate models and data within the system increases the probability of successful decisions (and thus successful business performance).

Open APIs
Any enterprisewide decision platform should provide a comprehensive services-oriented interface for extending the solution’s capabilities to other application frameworks, third-party BI, or other analytic tools. To maximize efficiencies and communication, a platform must be built on proven analytic-interface standards such as SOAP, MDX, or XMLA, and be fully documented and open for maximum flexibility and usability. This is especially important when your analysis leads to executing a change in the underlying operational source (such as a new product plan or a price change).

Powerful Analytics
Powerful analytics—an essential component of the overall performance management solution—must include the ability to leverage rules-driven business models. These models must provide an easy interface for configuration, since business rules seldom stay the same for long. The modeling environment must also allow for unlimited dimensionality, since most business interaction is influenced by more than three dimensions. Given the nature of this core component to corporate operations, comprehensive role-based security management is critical to control data access and visibility at every level of the enterprise model.

Integrated Information Management
Data is essential to the entire decision-making process, so the need for connectivity to multiple disparate enterprise, legacy, or external data sources (with configurability for batch, asynchronous, or real-time integration) can’t be overlooked. The technology foundation should also provide data warehouse and real-time integration hybrid capabilities that enable 95 percent of the value with less than 20 percent of the typical integration effort. Similarly, the ability to logically integrate information for analysis saves both time and money, since it decreases the need for additional redundant physical data storage dedicated to analysis and decision making.

Operationalizing BI to Speed Up the Decision Process and Close the Feedback Loop

The right technology foundation empowers users to read results and take action in the same environment. To make the most of their BI knowledge, companies must be able to integrate “write-back” capabilities into their overall decision process, including inserts and updates. This allows enterprises to take the knowledge gleaned from BI analysis and write directly to the operational applications that govern and enable their organization. Some term this capability “closed-loop decision management,” but, in effect, it is the combination of OLTP and OLAP in a single integrated environment that makes the overall solution effective.

To illustrate this point, consider a large manufacturer that takes a 25-person department down to eight, while reducing the decision cycle time from six weeks to one and increasing the level of detail managed by a facto of four. This can be possible by a solution that provides all the required information in a single system where the user can efficiently act on the information.

Performance management enabled by operational BI is truly the next wave of high-value enterprise business solutions. Perceptive organizations with a competitive drive will embrace the benefits of a single decision-centric analytic solution as they look for competitive advantage in the marketplace.

Bennett Indart -

Bennett Indart manages the strategic direction of RPM's platform through product marketing and management. Previously, Bennett held senior management positions at Informatica in business development, product marketing, and product management. Bennett was Director of Product Development at Influence Software, and prior to that, was a senior consultant in Andersen Consulting's SAP business practice. He received a bachelor of arts in architecture from UC Berkeley and a MBA in marketing and entrepreneurship from the University of Colorado.