1. PERFORMANCE & TECHNOLOGY
Business Intelligence
A good servant but a bad master
David Slánský
28th April 2010
ADVISORY

2. Instead of introduction – the real world today
Combined development of management and
Up to half of executive
information infrastructures results in a 34%
managers place no
confidence in the numbers performance improvement.
presented to them.
Less than 50% of UK firms Estimates suggest that 75
believe that their percent of Business
enterprise performance Intelligence projects ere
management systems perceived to have failed
deliver useful insight
Two thirds of executives Despite the evidence presented to
feel that the quality of and support the success of BI, there is ample
timely access to data is evidence that many organisations have
poor and inconsistent made little progress towards effective BI.
More worrying still is that of those whom
have tried have failed to achieve the
expected benefits 2

3. Key questions
Where will you go?
What do you need to overcome?
How to get reports understanding under control?
3

4. Modern BI solutions should prove its value and increase
business flexibility
A recent survey of 700 While typical BI solutions support… … modern solution should bring
automotive distributors found
that there are a number of
operational practices that
correlate positively to high
performance. Management reporting Flexible information
In a major initiative, there was delivery
established a complete new Standard business
structure for controlling the
financial reporting systems of reporting Ahead thinking support
this large U.S. Automotive
Distributor. The company
lacked consensus on how to Regulatory reporting Decisions and reasoning
improve its reporting, and was
suffering from an excess of
manual work, a high level of Collaboration, mutual
errors, and a variety of
different approaches across understanding
the business. Recent
Risk management
technology investments had
been perceived as misspent Churn management
and conflicting.
The review involved
interviewing key executives Campaign
and developing a business
case for a new approach that management Trust
could generate over US$6
million in productivity
savings and over US$2
million in cost savings.
4

5. The future will bring trust and collaboration
If you are using multiple
information systems, how do
you accurately measure 1. Formal governance environment for
financial performance across
different areas of your
organization? increased reliability
The consolidation of
information needs and
subsequent consolidation of 2. Social BI
decision support systems into
one management information
system allowed for far greater 3. Better business adoption / semantic
automation by reducing the
need for time consuming
manual planning and 4. Increased emphasis on flexibility and
consolidation process.
This meant that the client also
has a common global finance time-to-market reduction
platform delivering essential
financial data to help them
track performance both at a 5. Shift to decision making system
group and subgroup level in
their global operations.
Furthermore, the 6. Integration in all aspects
implementation of the new
system resulted in a 20
percent reduction in costs.
7. Tighter alignment to strategy execution
5

6. Key questions
Where will you go?
What do you need to overcome?
How to get reports understanding under control?
6

7. Business users among organization are facing similar
issues
This global mining company found
that a simplified data model was
the answer to surviving in a Current situation Impacts
turbulent market.
For even the most adept manager, Silo-based approach; user requirements Requirements flood
having to manage commodity
prices that fluctuate over 200
isolated
percent in one year is more than
just a challenge. Fortunately, this Solution architecture inflexible (series of loosely Long delivery terms
global mining house was linked data marts)
prepared. Through a timely
examination of the drivers of
value, they were able to identify Users don’t understand solution content in the Users don’t trust the solution
which were the key to their
business and what had to be
same way Users require redundant work
reported to the board as the Management -> consolidation
markets changed. By using the
insights gained from the value-
driver analysis, the client was able
to distill the key elements of the Unclear priorities and delivery terms Workarounds
data model required for fast Disillusion / loss of credibility
decision making.
A faster data collection process
was established. By using a Outputs don’t meet the quality requirements Disillusion / loss of credibility
common data model, with clearly (also due to source systems problems) Repeated requirements
agreed common definitions, the
organization was able to make Workaround
immediate decisions about
stopping, resuming, and starting
investments. They could clearly
forecast the impact of the turbulent
Unclear data lineage Loss of credibility
market place and had the ability to
make critical operational Underestimated communication and PR Loss of credibility
decisions.
7

8. There is no one size fits all solution… but there are still
some generic “what has worked” hints…
A client was at a loss to explain
sudden and unexpected
volatility in key cost lines during
the recent economic
turbulence. Management had Solution
Environment development
also often failed to notice poor operations
performance of key indicators
in time to make necessary
decisions and changes.
Poor information, governance Business users 1 Solution Architecture 3
and inadequate processes had understanding BI components
significantly contributed to poor Content understanding Involved in EA
management decisions that Functionality understanding Design security Running application 5
‘cost’ the organization over Change management Availability
US$72 million. They prioritized Security
4 Resources, budget
from hundreds of performance
measures to produce a Consolidation,
Users requirements Development projects
manageable number such as: prioritization
volume of customers; churn
rate; revenue; margin. This 2
helped the client to create a 6
simulation model which
enabled him to assess the
outcome of changing variables
such as price and customer Budget,
Budget,
resources
service, and learn how various
measures are interrelated.
As a result, the business now
has an understanding of how a
change in price and speed of
customer service responses
affect their performance.
8

9. Key questions
Where will you go?
What do you need to overcome?
How to get reports understanding under control?
9

10. May be you have the “déjà vu” feeling
You may consider using
frameworks for cash What does What is the This code
reporting and forecasting should not
which reduced the financial
this mean? difference?
close period from 25 to 11 apply here
days.
By doing so, you may be PaidMovement OSMovement IncurredMovement IncurredFrom Incurred As At SettCcyISO ReportingClass1 ReportingClass2 EventCode EventName
able to release up to 44092 99488 68852 50000 67166 USD Personal Accident Personal Accident 60007 tetewrtwert
94591 90460 87270 50000 12588 USD Personal Accident Personal Accident 60007 tertwertwer
US$29.2 million in cash. 77146 4872 50671 50000 63242 USD Personal Accident Personal Accident 60007 gsdfgsdhg
After three weeks a client 91854 36637 48384 50000 36584 USD Medical Expenses Medical Expenses 50149 jdfhfdsgsf
63759 32479 26252 50000 25704 USD Contingency Contingency 50315 ewrtwertre
diagnosed the issues and 37632 81494 67870 50000 89962 USD Personal Accident Personal Accident 60005 gsdfgdsggg
began working on 20096 46492 80184 50000 79246 USD Personal Accident Personal Accident 60004 gbbvscbbsdfb
14257 31754 47366 50000 44500 USD Medical Expenses Medical Expenses 50298 gsdgdsfgsdfg
redefining the KPIs aligned 2919 40800 37178 50000 99374 USD Personal Accident Personal Accident 50299 gdsgsdfgdfsgds
61176 91362 40666 50000 8043 USD Medical Expenses Medical Expenses 50149 gsfdgsfdgdfg
to the strategic objectives 47536 25570 9927 50000 7049 GBP Bloodstock Bloodstock 50325 fdgsdgdsfgd
to design a mock-up board 60923 86863 6586 50000 56982 GBP Bloodstock Bloodstock 60002 rewtwretrwe
34803 71609 50302 50000 45870 GBP Bloodstock Bloodstock 60002 trewtrwtrt
reporting pack. 86536 55742 21684 50000 79503 GBP Bloodstock Bloodstock 60002 twertwretwr
This created a transparent
view of working capital and
cash management which
gave investors clarity on
performance. Can I see
the detail?
What are other
classes?
This is I have slightly
incorrect! different
number. Why?
10

11. What do you miss?
Is it possible to achieve a coherent
view of the truth in a cost-effective
manner when your business has
more than a hundred billion dollars
Storyline
of revenue, over 50,000
employees, global operations with
hundreds of products and
channels? For this global oil
company the answer was an Transparency
emphatic “yes.”
After many years of significant Highlights
systems investments, the client still
found they had inconsistent
reporting methods — they were no
closer to obtaining a “single version Decision
of the truth.” The proliferation of
systems, data warehouses, and making
reports seemed to be getting
worse. It was clear that continuing simplification
with the same approach.
Segregation the governance model
into three layers helped. The first
was to identify who really owned
and controlled the information, the
second was to look at who used
the information, and the third was
who produced it. By using
advanced facilitation methods and
tools, this organization was able to
define clear roles and
responsibilities for ownership and
used a shared service capability to
deliver master-data management.
The outcome led to significant
improvements in data quality and
consistency, lower cost, and faster
decision making. Common
Structure understanding
11

12. Common understanding environment
What do you do if your company
has grown through multiple
acquisitions — and investors
want you to drive synergy
benefits — but you can’t get
global or regional insight into key Central
operational components? Report description Encyclopedia
You need to focus. A leading Header
• Name, type, purpose, owner, author, user
global brewer grew through more groups, certification date etc.
Business dictionary
than twenty acquisitions, Single business definition
however, each acquired Data lineage diagram:
company had different ways of
defining channels, customers, Application portfolio
and products. This made internal Consolidated Vodafone systems description
benchmarking difficult, if not
Report
Report +
impossible. Having tried to XYZ
XYZ
standardize the information Reports portfolio
Report’s data overview: Consolidated reports catalogue
several times, they realized that
a different approach was
required. The way out was to
become explicit about the Users catalogue
requirements of each key client Report’s elements overview:
• Name
stakeholder to execute the • Type
strategic plan. • Update mechanism, etc.
Any other catalogue
As a result, they were able to
reduce the volume of information
requirements significantly. This in
turn led to the adoption of
simplified processes, systems,
and data model to deliver the
information required to make
strategic decisions for their
global operation.
12

13. There is not that much encyclopedia elements
Is it possible to be more effective and
efficient at the same time? A global
automotive supplier has learned that a
sharp focus on what matters can
provide more incisive information at a
significantly lower cost.
Rather than the classic systems
approach of collecting masses of
conflicting business requirements and
then trying to reconcile this into a
coherent set of requirements, this
global supplier chose to start with the
core information required to enable the
business model. This involved a
detailed analysis of the existing
business model and the strategy. By
re-defining the measures that reflect
real value, the company set new key
performance indicators (KPIs),
covering performance from a financial,
operational, and risk perspective.
Reports were standardized and the
number and size of documents were
reduced, eliminating unnecessary
information.
The result was a significant reduction
in the number of reports and less
duplication of redundant information.
The client is now aware that, to steer
the business and to support its
strategy, it needs more than just KPIs:
it must harmonize its planning,
forecasting, and reporting so that all
link into the same information.
13

14. Although it looks complicated it is not
A large energy company
was experiencing long and
inconsistent planning and
forecasting cycles partially
as a result of poorly
configured planning
technology.
hey reduced data and
system proliferation by
decreasing the total
number of applications by
more than 50 percent and
the total number of reports
from over 700 to less than
125.
With this significant
reduction in application
complexity, support hours
were reduced by 15
percent and their planning
cycles are five days
shorter.
14

15. So you have experienced that …
… modern BI solutions take the line of flexible,
anticipative, collaborative partner for your decision
making process at any point of your organization.
… all of you face common teething problems which can
be solved with business involvement.
… you will get the desired effect as soon as you will
understand and trust your solution.
… simplicity and out of the box thinking are the key
success enablers of your BI governance changes.
15

16. What to do next?
Tomorrow
Identify hot areas and involved colleagues. Get the business reasoning
– it is possible!
Find one area where you will bring immediate and tangible effect
and do it.
Think about eating an elephant.
In six months
Have your strategic plan for BI improvement ready. Be prepared for next
steps.
Evaluate your initiatives, communicate success, use the benefits for
justifying next projects. Get more people on board.
Start next round of projects – both growing the top line and supporting
information workers.
16

17. David Slánský
KPMG Česká republika, s.r.o.
+420 222 124 249
dslansky@kpmg.cz
www.kpmg.cz
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