Business Intelligence

Transcription

1 The Profit Impact of Business Intelligence Steve Williams Nancy Williams ELSEVIER AMSTERDAM BOSTON HEIDELBERG LONDON NEW YORK OXFORD PARIS. SAN DIEGO SAN FRANCISCO. SINGAPORE SYDNEY TOKYO Morgan Kaufmann Publishers is an imprint of Elsevier 14' MORGAN KAUFMANN PUBLISHERS

2 Preface Acknowledgments xiii xvii Chapter 1 The Business Value of Business Intelligence What Is Business Intelligence? Business Intelligence in Action The Origins of Business Intelligence Business Intelligence Today Using Business Intelligence to Capture Business Value How Do We Achieve Strategic Alignment? The Need for Process Engineering Process Engineering in Practice The Need for Change Management Business Value Analysis of Business Intelligence Initiatives Managing for Business Value Delivery Key Points to Remember Think Tank Seven Questions to Ask About Your Organization's Bl Needs Quiz: What Might Bl Mean for Your Company? 24 Chapter 2 Identifying and Prioritizing Business Intelligence-Driven Opportunities for Your Organization Business Intelligence Opportunity Analysis Overview Case Study: McCormick Opportunity Analysis Evolution of McCormick's Relevant Industries Summary of Food Industry Drivers and Trends Application of the Business Intelligence Opportunity Analysis Framework at McCormick Business Intelligence Opportunity Analysis Summary Business Intelligence Opportunity Analysis: Practical Considerations Art Versus Science in Business Intelligence Opportunity Analysis Quality of Business Intelligence Opportunity Analysis Risk-Reward Tradeoffs and the Business Intelligence Opportunity Map Business Intelligence Opportunity Analysis: Summary 42

3 2.4 Key Points to Remember Think Tank Seven Questions to Ask About Your Company's Business Intelligence Opportunities Quiz: How Prepared Are We to Leverage Business Intelligence? 43 Chapter 3 Business Intelligence Readiness: Prerequisites for Leveraging Business Intelligence to Improve Profits Business Intelligence Readiness Overview Business Intelligence Readiness, Business Risk, and Traditional Development Methods Manufacturing Company Example Disability Insurance Company Example Business Intelligence Readiness Factors Strategic Alignment Continuous Process Improvement Culture Culture Around the Use of Information and Analytical Applications Business Intelligence Portfolio Management Decision Process Engineering Culture Business Intelligence and Data Warehousing Technical Readiness Effective Business/Information Technology Partnership for Business Intelligence Summary: Business Intelligence Readiness Factors Case Study: BYTECO Business Intelligence Readiness Assessment The Business Intelligence Readiness Assessment Business Intelligence Readiness: Summary Key Points to Remember Think Tank Seven Questions to Ask About Your Company's Business Intelligence Readiness Quiz: How Prepared Is the Business to Leverage Business Intelligence? 63 Chapter 4 Business-Centric Business Intelligence Development with the Bl Pathway Method The Bl Pathway Overview Unique Characteristics of the Bl Pathway Method Organizational Tailoring of the Bl Pathway Method 69

4 4.2 Part 1: The Architectures Phase of the Bl Pathway Method The Case for Investing in an Architectures Phase Bl Pathway Architectures Phase Overview: Aligning the Business Intelligence Program To Deliver Return on Investment Setting the Architectural Foundation for Business Intelligence Project Success Bl Pathway Architectures Summary Part 2: The Implementation Phase of the Bl Pathway Method Logical Data Mart Modeling Technical Development Work The Operations and Continuous Improvement Phase of the Bl Pathway Method Chapter Summary Key Points to Remember Think Tank Seven Questions to Ask About Your Company and Business Intelligence Quiz: How Prepared Is Your Company to Leverage Business Intelligence? 94 Chapter 5 Leading and Managing a Business Intelligence-Driven Profit Improvement Program A Leadership Perspective on Business Intelligence- Driven Profit Improvement Changing the Culture of Information Usage The Three Stages of Business Intelligence- Driven Cultural Change Steps for Advancing Business Intelligence Maturity Summary: A Leadership Perspective on Business Intelligence-Driven Profit Improvement A General Management Perspective on Business Intelligence-Driven Profit Improvement The Program Plan for Business Intelligence- Driven Profit Improvement Summary: The Program Plan for Business Intelligence-Driven Profit Improvement Business Intelligence-Driven Profit Improvement Is a General Management Responsibility Business Intelligence-Driven Profit Improvement Is Crossing the Chasm Key Points to Remember 115

5 5.5 Think Tank Seven Questions to Ask About Your Company and Business Intelligence-Driven Profit Improvement Quiz: Where Does Your Company Stand In Relation to BI/DW Core Competencies? 116 Chapter 6 Business Intelligence in the Broader Information Technology Context Where Business Intelligence Fits in the Information Technology Portfolio Information Technology Assets Required for Business Intelligence The Basic Scope and Configuration of Information Technology Assets for Business Intelligence Key Information Technology Products for Business Intelligence Summary: Information Technology Assets Required for Business Intelligence Business Intelligence Environment in the Information Technology Environment Business Intelligence Development Process Business Intelligence Production and Support Processes Business Intelligence Human Resources Summary: Business Intelligence Operations in the Information Technology Operational Environment Summary: Business Intelligence in the Broader Information Technology Context Key Points to Remember Think Tank Seven Questions to Ask About How Business Intelligence Fits in Your Company's Information Technology Portfolio Quiz: Where Does Business Intelligence Stand in Your Company's Information Technology Environment? 138 Chapter 7 Important Ways Business Intelligence Can Drive Profit Improvement The Impact of Industry, Competitors, and Company Business Design on Business Intelligence Opportunities A General Overview of Business Intelligence Opportunities Business Intelligence for Management Processes Common Ways Business Intelligence Is Used to Improve Management Processes 150

6 7.3.2 Business Intelligence and Balanced Scorecards: Enabling Strategic Management Business Intelligence and Management Accounting: Improving Operational and Financial Performance Summary: Business Intelligence for Management Processes Business Intelligence for Revenue-Generating Processes Summary: Business Intelligence for Revenue-Generating Processes Business Intelligence for Operating Processes Common Ways Business Intelligence Is Used to Improve Operating Processes Summary: Business Intelligence for Operating Processes Summary: Important Ways Business Intelligence Can Drive Profit Improvement Key Points to Remember Think Tank Seven Questions to Ask About How Business Intelligence Can Improve Profit in Your Company Quiz: How Does Business Intelligence Improve Profits? 168 Chapter 8 Common Mistakes Companies Make on Business Intelligence Initiatives Critical Success Factor: Establishing the Value Proposition Mistake #1: No Explicit Alignment Between Business Intelligence Strategy and Business Strategy Mistake #2: Not Knowing How to Define Information Requirements Mistake #3: Not Marketing the Vision to Obtain Organizational Support Critical Success Factor: Establishing and Managing a Business Intelligence Program Mistake #4: Using Ad Hoc Practices to Select and Fund Business Intelligence Projects Mistake #5: Providing Inadequate Governance for the Business Intelligence Program Management Mistake #6: Establishing De Facto Program Governance Based on the Initial Business Intelligence Project Mistake #7: Not Strategically Positioning the Business Intelligence in the Business Organization 176

7 8.2.5 Mistake #8: Not Providing Adequate Resources and Funding for Supporting Efforts Needed for a Successful Business Intelligence Initiative Critical Success Factor: Optimizing Information Technology Infrastructure for Business Intelligence Mistake #9: Using a Technical Infrastructure That Does Not Adequately Support Business Intelligence Mistake #10: Using Operational System Information Technology Design and Development Approaches Mistake #11: Using Information Technology Standards and Policies Designed for Operational Systems Critical Success Factor: Managing Organizational Change Needed to Capture Value Mistake #12: Not Utilizing Business Process Reengineering Approaches to Optimize the Use of New Business Intelligence Capabilities Mistake #13: Unwillingness to Make the Organizational Changes Needed to Obtain Data Needed to Deliver Business Intelligence Mistake #14: Not Creating Organizational Incentives Mistake #15: Not Exploiting the Full Potential of Information Key Points to Remember Think Tank Seven Questions to Ask About Business Intelligence Mistakes Quiz: Do You Know How to Avoid the Worst Business Intelligence Mistakes? 182 Chapter 9 A View over the Horizon Business Intelligence Moves into the Mainstream Decision Process Engineering: Equipping Knowledge Workers with Information and Instituting Standards and Accountability Re-engineering Knowledge Work: Releasing the Power of Business Intelligence Creating a Vision of How Knowledge Work That Impacts Profits Should Be Performed Making Specific Decisions About Management and Analytical Frameworks for Core Business Processes That Impact Profits Determining What Business Information Is Needed to Apply the Selected Frameworks Determining How Key Decisions Should Be Made and by Whom 193

8 [ ; " ' '! :. Contents Infusing Accountability and Process Metrics into Business Processes and Decision Processes Investing in Business Intelligence and Business Process Management Competencies, Methods, and Tools Managing the Changes Required to Redirect Knowledge Work from an Artisan Model to a Systems Model Closing The Loop: Optimizing and Integrating Strategic, Tactical, and Operational Business Performance Barriers to Realizing the Benefits of Business Intelligence Noise and Confusion in the Business Tools Environment Skepticism About Information Technology Value Propositions Executive and Management Challenges Relative to Information Technology Competition for Business and Information Technology Resources Risk Aversion Summary Key Points to Remember Think Tank Seven Questions to Ask About Your Own View Ahead Quiz: How Will You Make the Most of Business Intelligence in the Future? 199 Appendix A: A Business Intelligence Glossary 200 Appendix B: A Business Intelligence Readiness Assessment 202 Bibliography 206 Index 209 About the Authors 217