Data Warehousing Implementation Success: The Findings Using Different Research Methodologies

Hugh J. Watson Terry College of Business University of Georgia hwatson@terry.uga.edu

http://www.terry.uga.edu/~hwatson/implementation_success.ppt

Research on Data Warehousing

Started in 1994 Has focused on implementation issues and organizational benefits Has utilized a variety of research methodologies

First American Corporation

FAC -- A bank in trouble Enter a new management team A CRM strategy, Tailored Client Solutions, was created

About life. About you.

Client Information know the client better than anyone Flexible Product Line provide what the client needs

The Client
Distribution Management offer the client preferred channels

Consistent Service help the client achieve goals

First American Corporation

FAC -- A bank in trouble Enter a new management team A CRM strategy, Tailored Client Solutions, was created A data warehouse called VISION was developed to support the strategy

Teller Transactions ATM Transactions PC Banking

Loans Deposits Investments

Transactions Products Client Interactions

Marketing Campaigns Customer Calls Mailer Responses

Transaction Client
Demographics
Name Occupation Head of Household

Measures
Balances Fees Profitability

Psychographics

Buying Preferences Financial Segments Lifestyle Groups

First American Corporation

Applications using VISION were developed for every component of TCS

Applications for Every Component of the Strategy

Client Information: Customer Preferences and Profiles Flexible Product Line: Profitability Analysis for Seniors Accounts Consistent Service: Contact Management System Distribution Management: Distribution Management System

First American Corporation

External talent was brought in as needed A phased implementation strategy was followed, with short-term wins Only after early successes, was the strategy fully communicated throughout the bank Incentive and reward systems were changed

The Outcomes at FAC

The bank was transformed A shift from banking by intuition to banking by information and analysis Profits of over $211 million (US) in 1998 A leader in the financial services industry Won the 1999 Society for Information Management Award

What Was Learned

A strong business vision is more important than existing in-house IT expertise Acquire the needed business and technical personnel Both organizational and technological changes are necessary Plan for "quick hit" success, and repeated successes

Whirlpool

An international manufacturer of appliances In the early 1990s, several business units saw the need for integrated data IT saw a data warehouse as a way to improve the technical infrastructure Sponsorship for the warehouse came from a senior IT manager, who left shortly after initiating the project

Whirlpool

Specific applications were developed based on the warehouse -- quality, global purchasing, and cost recovery Users are pleased with the warehouse but it has not dramatically affected how the company is run Senior management is aware of the warehouse but does not view it strategically

A Question: Why were the returns from data warehousing so much greater at FAC than Whirlpool?

ea sy to m ea su re T im e sav in:g s r d ata sup p liers fo fo r u sers M o re and b etter in form atio n B etter d ecisio ns

lo ca l im pa

Im p rov em en t o f b u sin ess p ro cesses

S up p o rt for th e acco m p lish m en t o f strateg ic b u sin ess ha rd to m ea su re g lo b a l im p a

E ta lis in aS n eo U e c s b h g e s f rg n y

F rm ga o in P w rfu G id gC a n o e l u in o litio

C a gaV io re tin is n

C m u ic tin th V io o m n a g e is n

E p w rin O e to m o e g th rs A t o th V io c n e is n P n in fo a dC a g la n g r n re tin So h rt -T rmW s e in C n o a gIm ro e e t a d o s lid tin p v mn n P d c gS MreC a g ro u in till o h n e In titu n liz g s tio a in N wA p a h s e p ro c e

What Was Learned

Kotters theory of organizational transformation can help explain and predict why some organizations are more successful with their data warehousing efforts

Factors Affecting Data Warehousing Success

Data warehouses are claimed to have high failure rates; hence, the need for research Most of the current knowledge is anecdotal and based on experiences in a few firms A research model was developed and data were collected from 111 organizations

Factors Affecting Data Warehousing Success

Partial Least Squares (PLS) was used to test the research model

Implem entation Factors

M an agem en t Support .4 40***

Implem entation Success

Organ izat ional Im pl em entati on Success .071

System Success

.072 Cham pion .088 .2 19*** R es ources .271** .094 User Partici pation .177** .177* .4 01*** Team Ski lls .138 R2 =.435 .113 Proj ect .042 Im pl em entati on Success R2 =.419 .235**

Dat a Qu al it y .142* R2 =.016 Perceived Net Benefits

.5 49*** System Qu al it y R2 =.369

R2 =.128 Source Sys tems .169* T echni cal Im pl em entati on Success .063

Develop ment Techn ology

.2 76*** R2 =.205

What Was Learned

Many of the traditional IT implementation factors apply to data warehousing Other factors, however, affect system and data quality Implementation success factors can be grouped together for parsimony Findings may be applicable to other infrastructure projects

Comparing the Research Methods

Choose a best practices company The company can be a source of useful insights and examples A single or multiple case studies can be used to develop or test theories Positivistic research provides more generalizable findings but may be weaker for providing new insights

References

Cooper, B.L., H.J. Watson, B.H. Wixom, and D.L. Goodhue, "Data Warehousing Supports Corporate Strategy at First American Corporation," MIS Quarterly, (December, 2000), pp. 547-567. Haley, B.J., The Benefits of Data Warehousing at Whirlpool, Annuals of Cases on Information Technology Applications and Management in Organizations, Hershey, PA, Idea Publishing Group, 1999, pp. 14-25. Kotter, J.P., Leading Change: Why Transformation Efforts Fail, Harvard Business Review, (March/April, 1995), pp. 59-67.

References

Watson, H.J., D.L. Goodhue, and B.H.Wixon, The Benefits of Data Warehousing: Why Some Organizations Realize Exceptional Benefits, Information & Management, (forthcoming). Wixom, B.H. and H.J. Watson, An Empirical Investigation of the Factors Affecting Data Warehousing Success, MIS Quarterly, (March, 2001), pp. 1-25.

Danke