®

IBM Software Group

Introduction to Business Intelligence

Vince Leat
ASEAN SW Group

© 2007 IBM Corporation

 IBM Software Group

Discussion

What is Business Intelligence

BI Vision Evolution

Business Intelligence Environment

Characteristics of Successful Business Intelligence

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What is Business Intelligence?

Business Intelligence (BI) is:

“The processes, technologies and tools needed to turn data into

information and information into knowledge and knowledge into plans
that drive profitable business action. BI encompasses data
warehousing, business analytics and knowledge management.”
The Data Warehouse Institute, Q4/2002

Business Intelligence is defined as "knowledge gained about a business

through the use of various hardware/software technologies which
enable organizations to turn data into information”.
Data Management Review

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According to a recent CEO survey, responding

efficiently to market conditions & differentiated
products are their key priorities.
Key CEO Priorities

Rapid Response

Differentiated Products

Business Model
Capture and utilize customer information for swift
Operational Efficiency
decisions
New Products / Services Vehicles to capture customers / consumers
needs/preferences
Organization
Create adaptable processes that allow real time response
IT Performance
Track competitor trends and actions
Employee Needs

Strategic Partners Empower front-line employees

Sourcing …
… with
with strategic
strategic usage
usage of
of customer
customer
Implement/leverage CRM processes and applications
Disaster Management information
information &
& processes
processes as
as the
the key
key enabler…
enabler…
Other
0% 20% 40% 60% 80% 100%
0% 25% 50% 75%

Source: IBM Business Consulting Services, The Global CEO Study 2004

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Another recent survey by “The Asian Banker” rates

customer knowledge as key capabilities for
competitive advantage.
What are the key capabilities to achieve a competitive advantange in over the next 5
years?
Importance

If you could only have one competitive advantage what would it be?

60.00%

50.00%
Innovative

Governance

Mergers and
Management

Risk Based
A Low Cost
Intelligence &
Distribution

Knowledge

Sales Culture

Customisation

Compliance

Financial Shop

Acquisitions
Products
Customer

disclosure

Regulatory
Investor /
Information

Corporate
Market

Meeting
40.00%
CRM /

Pricing

One Stop
Base
Service
Risk

30.00%

20.00%

10.00%

0.00%

A Low Cost Base Innovative Products

Service CustomisationCRM / Customer
Knowledge

“Survey on strategic information challenges faced by the best retail banks in Asia”, May 2005

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Business Intelligence (BI) allows us to use data

strategically in responses to challenges and drive
profitable business actions.
Efficiency Effectiveness Differentiation
“real-time access to customer information “ability to proactively manage opportunity
“minimize the cost of selling/servicing the
across every point of contact… at the line-of- and risk at every point of customer contact…
customer …”
business…” at the enterprise… at the affinity partner...”

Business Drivers

Business Strategies Business Initiatives

Business Intelligence (BI)

“The processes, technologies and tools needed to turn data into
information and information into knowledge and knowledge into
plans that drive profitable business action. BI encompasses data
warehousing, business analytics and knowledge management.”
The Data Warehouse Institute, Q4/2002

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The Business Intelligence :

Business Revitalizing Value Growth
Imperatives

Creating a single customer view business
Understand Customer intelligence platform to enable analysis of customer
Needs
needs

Revenue Creation
Develop a series of customer analytical applications

to understand and identify customer needs
Cost Optimization

Use the insights derived from the analytical applications
to create new or customized products, services and
Enterprise tactical campaigns that meets customer needs to
Transformation drive revenue growth and cost optimization objectives

Technology
Revitalized value growth with improved customer

Transformation
experience

Operationalize the strategic usage of data as part of

business as usual
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BI can be thought of as a data refinery that turns

data into actions and business value.

value review, measure, refine

actions experience

insights rules & model

operational systems knowledge analytical tools

data

information data warehouse

investment

The Data Refinery

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BI requires cross functional data

Effective decision making requires information that crosses organizational and
functional boundaries.

Business Information Needs

Supplier/
Supply Chain Customer
· How tightly is customer satisfaction related to
Information business unit performance and profitability?
Information
· Are the most satisfied customers the most
profitable?
· Are incentive systems achieving the desired results?
· How effective is the company’s strategy?
· Which parts of the business are creating value and
what parts are destroying value?
· Regional compensation differences may be driving
Financial and some of the business unit performance variances
Business Employee
Performance · What is the ratio of customer profitability to Information
employee incentives, by business unit, by region?
Information

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Evolutionary steps to achieving the BI vision.

Level 1 Level 2 Level 3 Level 4 Level 5
Segmentation Recognize,
based on • Multiple Real time event anticipate and
profitability and segmentations triggers response using 1 LEVEL5:
5: LEADING
LEADING
LEVEL
behavioral data, • Closed-loop to 1 multi-step Differentiatesbased
basedon
on
Business Intelligence Vision Development

some predictive marketing initial. Differentiates

campaign business intelligence capabilities.
modeling. management business intelligence capabilities.

Full integration of
Integrated data
Segmentation drives: organization with LEVEL4:
4: OPTIMIZING
OPTIMIZING
Simple lifestyle collection and LEVEL
• pricing and service levels customer functions.
or profitability enhanced predictive Integratesbusiness
Integrates businessintelligence
intelligence
segments of all touchpoints. modeling. practicesinto
intodaily
dailyoperations.
operations.
practices
• Direct marketing content • Single, corporate data
and workflow warehouse with solid
Segmentation data management LEVEL3:
3: PRACTICING
PRACTICING
• Preemptive retention LEVEL
confined to practices Implementsbasic
Implements basicbusiness
businessintelligence
intelligence
marketing Partial organizational
organization. • Access of all customer capabilities.
capabilities.
alignment, but touchpoints
conflicts with
traditional silos.
No LEVEL2:
2: DEVELOPING
DEVELOPING
organizational
• Dynamic analysis LEVEL
Basic,non-integrated
Basic, non-integrated
alignment. • Numerous data marts with
• Basic report & ad-hoc “clean data” business intelligence capabilitiesininplace.
business intelligence capabilities place.
analysis
• Some touchpoint access
• Numerous data
sources LEVEL1:
LEVEL 1: AWARE
AWARE
• Data access limited to Showsfew
Shows fewbusiness
businessintelligence
intelligence
IT and marketing capabilities.
capabilities.

Ability to Actualize Vision 10

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Evolutionary steps in adoption of BI analytical

techniques. 0% 50% 100%

Integrated modeling and event-based environment

LEVEL5:
LEVEL 5: LEADING
LEADING
Differentiatesbased
Differentiates basedon
on
business intelligence capabilities.
business intelligence capabilities.

Adopts event-based analysis and triggering

LEVEL4:
LEVEL 4: OPTIMIZING
OPTIMIZING
Integratesbusiness
Integrates businessintelligence
intelligence
practices into daily operations.
practices into daily operations.

LEVEL3:
3: PRACTICING
PRACTICING
Analytical and predictive modeling and mining grows
LEVEL
Implementsbasic
Implements basicbusiness
businessintelligence
intelligence
capabilities.
capabilities.

Increase in ad-hoc queries and start analytical data mining

LEVEL2:
LEVEL 2: DEVELOPING
DEVELOPING
Basic,non-integrated
Basic, non-integrated
business intelligence capabilitiesininplace.
business intelligence capabilities place.

LEVEL1:
1: AWARE
AWARE Primarily batched reports
LEVEL
Showsfew
Shows fewbusiness
businessintelligence
intelligence
capabilities.
capabilities.

predictive modeling
batched reports OLAP event-based triggering
& data mining
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ROI $ returns starts negative but grows

exponentially with constant evolution of data and
business capabilities.
The World of Performance
The Intelligent,
Information Enterprise
Reporting Management Agile
Access Information
Enterprise

relationship
ROI ($)

events optimization
detection
risk
management enterprise
dashboard
segmentation propensity
modeling
financial
management Time
profitability
reports KPIs OLAP
data quality
data enterprise data
manual marts warehouse
spreadsheets
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A typical enterprise BI environment consists of a

warehouse and an analytical environment.
Enterprise BI Environment

ERP Technical Team Business Users

Extract Enterprise Query

Clean Report
CRM
Model enterprise-wide Analyze
single view of
Transform the customer
Mine
Transfer Visualize
Legacy Data Warehouse
Load Act

Others

Data Warehousing Environment Analytical Environment

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There are key differences in transaction vs. BI data

warehousing environment.
Transaction vs. BI Systems

Data Warehousing
Environment

Transaction vs. BI Data

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Building and managing a data warehouse is a

continuous iterative process…

Data Warehousing
Environment
Knowledge Data Mining
Business Analytical DW Logical Data
Data Warehouse Discovery
Discovery Application Model Review
Workshop Model Dev.
Services

DW Physical DW Physical
DB Design DB Design Rev.
DW Logical Data
Data Modeling Data Warehouse
Data
Warehouse Warehouse Solution
Solution C/S Application Integration DW Tuning
Information
Discovery Readiness Dev. (Full Cycle)
DW Architecture
Design
DW Capacity
Enterprise Planning
DW Data
System
Transformation
Support
DW
Audit
Data Warehouse Management
( Process and Operations )

Data Warehouse Data Warehouse Data Warehouse Usage,

Planning Design & Implementation Support, and Enhancement

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… with new data sources or applications added

incrementally with new or changing business
requirements.

Data Warehousing Legacy ERP CRM Others

Environment

PLAN PLAN PLAN PLAN

D&I use D&I use D&I use D&I use

Time X Time X+Y Time X+Y+Z ……

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New data or applications for the EDW should be

prioritized and approved by a central governance
committee.
Projects
Projects External
Approved External
Sent
Sent to
to Approved
Vendor
Vendor
CIO
CIO for
for Project
Project on
on
Data Warehousing Develops
Develops & &
Exception
Exception EDW or
EDW or
Environment Implements
Implements
Other
Other

If business case is not approved or EDW

resources are not available & business unit
wants to fund & develop project outside IT

Prioritize
Prioritize Plan
Plan &
& IT
IT
Identify
Identify Prioritize
Prioritize
Complete
Complete Projects
Projects w w Schedule
Schedule Develop
Develop &&
Projects
Projects ww Projects
Projects by
by
Business
Business Approved
Approved Approved
Approved Implement
Implement
DSS
DSS Business
Business
Case
Case Business
Business EDW
EDW EDW
EDW
Rqrmnts
Rqrmnts Benefit
Benefit Case
Case Projects
Projects Projects
Projects

Business case includes

strategic objectives for
business & IT architectures

Business Units EDW Steering

Committee
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The landscape for analytical tools.

Analytical Strategic & Tactical Analysis Operational Analysis

Environment

REPORTING ANALYZING PREDICTING OPERATIONAL

What happened? Why did it happen? What will happen? What is happening?

Operational Reports OLAPs Statistical models Dashboards

Web Reports Planning Affinity Analysis Alerts
Exception Reports Forecasting Optimization Decision Engines
Scorecards Simulation Events detection
75% of usage 20% of usage 5% of usage 75% of usage

Historical Data (Data Warehouse/Marts) Real-Time Data (OS/EAI)

Business Performance Data Mining & Business Process

Management Predictive Modeling Monitoring

analytical & operational sophistication

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The adoption of analytical tools typically also follows

an evolution process of increasing complexity.

Analytical
Environment
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
REPORTING ANALYZING PREDICTING OPERATIONALIZING ACTIVE WAREHOUSING
WHAT happened? WHY did it happen? WHAT will happen? What IS happening? What do I WANT to happen?

Primarily Batch Increase in Data Mining & Continuous Update & Event Based Triggering
with Pre-defined Ad Hoc Queries Analytical Modeling Time Sensitive Queries takes hold
Queries and reports Early Data Mining Capability Grows Gain Importance

Batch Ad Hoc Analytics Continuous Update/Short Queries Event-Based Triggering

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Different user types exist, that require different

analytical tools and access.

Analytical
Environment
Decision
Needs Tools
Makers

BU managers and leaders
Predefined scorecards

Fast access to KPI scores and
Reporting Tools
click and point reports based on
10s users
their subject area of interest

Analysts &
Support decision makers
Specialist applications eg. risk

Specialists
Detailed data across full
spectrum of enterprise – the
freedom to ask any question to
find the root causes and
breakthrough insights

Statistical Modelling

Ad Hoc query tools

100s users

Operational
Frontline and processing staff
Look up access screens

Users

Fast access to profiles of
Web or operational system based
customers in order to make the
1000s Users
right service, sales, approval
decisions

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What do the best BI solution and system looks like?

The systems that support BI solutions are very different from other
systems in the company. Well-designed BI systems are adaptive by
nature; they continually change to answer new and different business
questions.
And the best way to adapt effectively is to start small and grow
organically. Each new increment refines and extends the solution,
adjusting to user feedback and new requirements.
Like a sprawling redwood forest, the best BI solutions take years to
mature, expanding in breadth and depth over time. It is no
coincidence that the value of a BI solution grows exponentially with the
number of users and applications it supports.

TDWI Report Series: “Smart Companies in the 21st Century: The Secrets of Creating Successful Business Intelligence Solutions”

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Characteristics of successful BI

Business sponsors are highly committed and actively

involved in the project.

Business users and the BI technical team work
together closely.

The BI system is viewed as an enterprise resource
and given adequate funding and guidance to ensure
long-term growth and viability.

Organization provide users both static and
interactive online views of data.

The BI team has prior experience with BI and is
assisted by vendor and independent consultants in a
partnership arrangement.

The company’s organizational culture reinforces the
BI solution.

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Guidelines for successful BI

Step 1: Establish a BI Vision and Evangelize it

Step 2: Develop a BI Roadmap to Prioritize Initiatives

Step 3: Establish BI Governance & Funding Process

Step 4: Establish BI Competency Centre (BICC)

Step 5: Align Business and IT for the Long Haul

Step 6: Measure and Track ROI/Benefits from BI

Step 7: Build Trust in the System

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Guidelines for successful BI

Step 1: Establish a BI Vision and Evangelize it

Determine the overall role that BI will
play in driving business strategy,
which drives the base vision
technology state and configuration

Determine the vision and key
business drivers, which drives the
scope (business units) breadth (data
subject areas)

Determine the business initiatives,
which will drive the applications and
knowledge assets required

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Guidelines for successful BI

Step 2: Develop a BI Roadmap to Prioritize BI Initiatives

Prioritize business initiatives by ROI,
strategic value and ease of execution

Overlay the cost savings from data
mart consolidation and centralization

Develop a roadmap for integration
with minimum costs (funded through
centralization benefits) and maximum
benefits generation (through enabling
business initiatives)

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Guidelines for successful BI

Step 3: Establish BI Governance & Funding Process

Establish governance structures,
executives, data governance board
and teams

Establish business intelligence
communities and support structures

Business sponsors need to secure
initial funding to launch the project.
More important, they need to sustain
funding over the life of the BI portfolio
and allocate funds to build and
maintain an enterprise BI
infrastructure.

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Guidelines for successful BI

Step 4: Establish BI Competency Centre (BICC)

The enterprise wide data warehouse
creates a need for new skills in data
analysis. A BICC is a central pool of skilled
resources and specialists which can be
shared by all business units.

The BICC acts as a champion driving the
EDW initiatives & awareness

The BICC is full-time team dedicated to
the data warehouse, and develops full
knowledge and expertise in the data,
analysis techniques and models

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Guidelines for successful BI

Step 5: Align Business and IT for the Long Haul

Extraordinarily successful BI projects all
have an enterprise scope that took years to
implement. The journey requires by a close-
knit team of developers and business people
who work hand in hand to deliver actionable
information to the users who need it.

Ensure alignment between the business and
technical development teams by use joint
application development sessions to bring
the two groups together to gain a common
understanding.

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Guidelines for successful BI

Step 6: Measure and Track ROI/Benefits from BI

BI is a journey and not a short term project.
Many a times, organizations loose sight and
confidence of the original objectives.

The way to overcome this is to start small
and expand with this baseline.

At the same time, make conscious effort to
measure and track any ROI/benefits that is
derived from BI (tangible or intangible)

The clear demonstration of success brings
confidence to progress while the loses
indicates opportunities for improvements.

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Guidelines for successful BI

Step 7: Build Trust in the System

There are very few ways to directly increase
the credibility of a system, but hundreds of
ways to undermine it.

The only way to build trust in a new BI
solution is to have the business team own
the solution and make all the decisions within
predefined technical boundaries (design,
data model, sourcing & validation).

Business sponsors need to make sure that,
in their eagerness to build the BI solution,
they don’t set arbitrary deadlines.

The technical team needs to provide a bullet-
proof technical environment that adapts
rapidly to changes in business requirements.
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In short, BI can help us become more intelligent

about the way we do business.
Smart companies in the 21st century use business
intelligence (BI) solutions to gain a clearer picture
of their internal operations, customers, supply
chain, and financial performance. They also derive
significant ROI by using BI to devise better tactics Organisation
and plans, respond more effectively to
emergencies, and capitalize more quickly on new Business Units /
opportunities. In short, they are using BI to become Departments
intelligent about the way they do business. Employee
TDWI Report Series: “Smart Companies in the 21st Century: Customer
The Secrets of Creating Successful Business Intelligence Solutions”

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Analysis Planning ess

Decision
Interpretation

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