Unfortunately, this happens all too often, in companies of all sizes. Key metrics that measure the health of the business are inconsistently reported by different departments.
How could this happen?
To correct the problem of multiple answers to questions about corporate performance, we have to understand how the problem comes about. Two main factors create an environment in which distinct parts of the business can be working from different sets of numbers that, on the surface, should be the same.
First, many businesses have individual departments with their own systems used to report key performance metrics. For instance, the sales department uses a sales force automation system, operations uses a supply chain management system and finance manages the general ledger.
Each of these systems could be used to determine a version of sales figures. However, there is no guarantee that there is consistency in the information stored in each of these systems.
The problem is compounded by the second factor, which is that the definitions used to generate key performance metrics vary among departments. Terms such as "sales," "profitability" and even "customer" are used throughout businesses without the realization that they have different meanings depending on who is using them.
When an attempt is made to clarify the meanings of various terms, you hear things such as, "We don't include direct accounts since we can't influence those sales," and "Small businesses and nonprofits are counted in the consumer segment, not commercial."
What can we do about it?
There are two parts to solving this problem. The first is technical; the second involves improved communication and understanding. The technical part is to create a centralized reporting repository that consolidates and reconciles information from all of the systems used by the business. The central repository (often called an enterprise data warehouse) acts as the single source for reporting, so that everyone accesses the same set of metrics, eliminating the confusion of gathering information from multiple sources.
The second part of the solution is a critical element of creating the data warehouse. Early in any data warehousing initiative, business analysts uncover terms that are used in multiple systems or by multiple departments but have different definitions. It is the business analysts' job to work with the different parts of the business to come to agreement on the definitions that apply to various terms.
Sometimes, however, having disparate groups agree on the meanings of some terms isn't possible. In these cases, it is important that all parties recognize that different definitions are appropriate, and make sure that everyone understands exactly what each of the definitions means.
The business analysts must then negotiate subtle changes to the names for the unique definitions so that they can be distinguished within the data warehouse and in the reports sourced from the data warehouse. Once the source of confusion is identified, most businesspeople appreciate the need to clarify the terms used in measuring business performance.
Companies must have one version of the truth and be able to manage using a consistent set of performance metrics. Through a combination of technology and improved communication, it's possible to ensure that everyone has the same answers for the metrics that are used to run the business.
BRYAN MCCLAIN (email@example.com) is the business intelligence practice manager at Innovative Consulting Inc., an IT services company focused on delivering business intelligence solutions. Reach him at (610) 725-2101.
Because we're beginning a new year, I'd like to use this insight into the friction between the IT and business sides to offer a short list of New Year's resolutions, resolutions that should, but probably won't, be made. It's actually two lists -- the top three resolutions businesspeople would like to see IT make, and the top three resolutions IT would like to see people in business make.
Resolutions IT people should consider for 2005
IT folks can make a big impact by reciting and adopting the following three resolutions.
* Stop using Ouija boards as project estimation tools. Nothing is more annoying to businesspeople than a runaway IT project. All things have a beginning and an end. IT needs to wrap a methodology around its projects and ensure that everything it intends to do is aligned with business goals and completed as promised.
* Understand the business problem before deciding on which products to use. The problem must drive the solution, not IT product preferences. Take the time to put yourself into the other person's shoes. First, thoroughly understand the user's business objectives, develop an IT solution strategy and then select the best products.
* Minimize the use of techno-jargon when speaking to businesspeople about the use and value of proposed IT solutions. The language of business is a far cry from techno-jargon. When speaking about the critical impact of a new system or application, focus more on process, capabilities and business value than on object models, security protocols, XML documents and storage capacity.
Resolutions businesspeople should consider for 2005
In turn, businesspeople can reduce friction with an IT organization by reciting and adopting the following three resolutions.
* Do not change your mind before the IT business analyst can get back to his or her desk. Before you make the effort to meet with IT, clearly know what you want to accomplish. By taking IT seriously, you will be taken seriously and avoid undesirable outcomes.
* Prioritize problems and issues based on business impact. All too frequently, users label problems and requests as critical when they really aren't. The motivation is to make sure their issues resolved first. Realize that IT usually has a long to-do list. Anything pushed to the top delays work on projects that could have a greater impact on the business.
* Let go of old processes when new ones provide more value. When asked why certain functionality is needed in a new application, responding with, "That's the way we do it in our application today," simply isn't a good response. On the other hand, changing processes just because a developer thinks of a "cool" way to do things isn't right, either. When new or replacement applications are in development, make sure you work closely with your IT teams to create a solution that supports the way you should be doing business.
The bottom line is that it's in everyone's best interest to understand what life is like on the other side. Communication fosters understanding, so this new year, resolve to spend more time talking over the business-IT fence.
Bryan McClain (firstname.lastname@example.org) is the business intelligence practice manager at Innovative Consulting, a leading provider of Business Intelligence, IT Strategy and eBusiness solutions to the Fortune 1000 and middle market enterprise. Reach him at (610) 725-2101.
This month I'll talk about the enterprise information strategy (EIS), which is the first step in delivering intelligent information in your organization. In order to meet an organization's goals, it is critical to understand what information should flow from person to person, role to role and team to team within the organization and with external parties such as customers, suppliers and partners.
The purpose of the EIS is to identify the information needs throughout the organization and map these needs to the processes required to share, manage and use the information. The value in creating an EIS comes from two sources: Saving time and effort for information workers to get the information they need to act on and being able to give people necessary information they didn't or couldn't get before, increasing the timeliness, quality and value of the actions they take.
The right stuff
An enterprise information strategy helps to understand how good an organization is at getting the most value from information and what needs to change to do better. The main goals of an EIS are to:
* Ensure that the effort information workers expend to acquire information is minimized
* Ensure that the information created by information workers is not underutilized
* Determine the "right" information needed by information workers, reducing "information clutter"
* Ensure good processes are in place to make the other goals happen
Steps to success
Developing an enterprise information strategy is similar to developing other IT strategies, but the scope is much broader. When done properly, an enterprise information strategy touches all parts of the organization. By following these major steps, team members with good facilitation and visioning skills can develop a very successful EIS.
* Understand the hierarchy of business goals from department, division, and corporate - what they are and how they support each other.
* Catalog information "roles" in each department, which usually correspond closely with titles or positions.
* Define the information needed, information being received and information produced by each of the roles.
* Define the paths and processes for information flow between the "producers" and "consumers."
* Do gap/overload analysis for each role.
* Perform efficiency analysis on information delivery.
* Determine if new/modified practices/processes/systems could streamline information delivery.
* Evaluate the economic impact of changes to information delivery practices/processes/systems.
* Define a value-based roadmap for increasing the value that information has for the organization.
Making better decisions
The final step listed for creating the EIS is to define the roadmap for changes to existing processes and systems that could streamline the flow information and allow more value to be gained from information assets. Although the line is sometimes fuzzy, the processes and systems that manage information can be roughly divided into those that are related to operating the business and those used for analyzing business performance and enhancing decision-making.
With the many existing options around ERP, CRM and SCM systems, the processes and systems used to run the business are usually pretty well-defined. While there are always tweaks that can be made, it's really on the other side of the line that an EIS can have the greatest impact. In next month's column, I'll begin talking about changes in the way companies analyze performance, and the real impact those changes can have for an organization.
The bottom line is that the enterprise information strategy sets the direction for maximizing the value that information assets can have in your organization. Knowing how things are supposed to work is the first step toward making those things happen.
Bryan McClain (email@example.com) is the business intelligence practice manager at Innovative Consulting, an IT services company focused on delivering business intelligence solutions. Reach him at (610) 725-2101.
The irony is that this constant flood of information doesn't make the process of making good, sound decisions any easier. The challenge lies in being able to extract the information that is valuable and setting aside that which just isn't important to the task at hand.
Studies show that many professional employees spend up to 60 percent of their time in activities related to gathering information, essentially clerical activities, in order to make the decisions that are really the heart of their jobs. So we are faced with two related problems -- an overwhelming volume of information to wade through and a lack of coordination around delivering information effectively. This lack of effective management of information affects not only the traditional decision-makers but all workers throughout the organization, from the call center to the executive suite.
A new kind of supply chain management
Because of these problems of control over information, at Innovative Consulting, we've begun introducing the concept of "Intelligent Information" to our customers. By Intelligent Information, we simply mean managing information intelligently -- providing all workers with precisely the information they need, without overload, in a form that fits the way they use the information.
Intelligent Information can be viewed as supply chain management (SCM) for the information assets in your company. In the SCM systems in place today, processes and technology are used to manage and streamline the flow of raw materials, intermediate products and finished goods among suppliers, companies, and distributors or customers. Intelligent Information sets in place processes and technologies that manage and streamline the flow of an asset that is just as important as any raw material or finished product -- information.
The key to effective SCM is to get the right asset, in the right condition, at the right time, for all steps in the process. The key to Intelligent Information is to get the right information, in the right context, at the right time, to all of our information workers.
You're probably saying, "But we share information every day. We couldn't do business if we didn't." That's true. But businesses have been around for a long time without formal SCM systems in place. It is equally important to have good management and control practices for tangible and intangible assets.
In both cases, the goal is to be better at something that we already do, something that we've been doing for so long that we don't even think about it.
Plan for change
Intelligent Information isn't focused only on technology. It's about realizing that everyone in the organization both consumes and produces information. It is critically important for each of us to get the information we need to "consume" to do our jobs, and that the information that we "produce" arrives where it is needed and is not wasted.
The first step to deliver Intelligent Information in your organization is to develop an Enterprise Information Strategy (EIS). It is critical to understand what information should flow from person to person, role to role and team to team within the organization and with external parties such as customers, suppliers and partners.
The purpose of the EIS is to identify the information that all parties need and map it to the processes that make it happen. I'll discuss the EIS in more detail in next month's column.
The bottom line is that information is a critical asset for any company, and needs to be managed as such. Intelligent Information represents an approach to making sure you get the best value from this asset.
BRYAN McCLAIN (firstname.lastname@example.org) is the business intelligence practice manager at Innovative Consulting, an IT services company focused on delivering business intelligence solutions. Reach him at (610) 725-2101.
Business intelligence (BI) applications that can automate the process of gathering, storing, analyzing and providing access to data are approaching their maturity. Unfortunately, when it comes to determining which direction to take, many first-time adopters painfully learn that all roads do not lead to Rome.
In your quest to automate the planning, reporting and analyzing process and provide actionable information to support decision-making at every level within your organization, consider this BI Traveler's Roadmap to Success
* Don't start without a roadmap. Develop a strategy. If you don't know where you're going, you're never going to get there. A good strategy aligns long- and short-term information initiatives with your business strategy, objectives and enterprise performance goals. A solid strategy will ensure a financially beneficial deployment of BI within your department or across the enterprise.
* Take along an experienced guide. If you haven't done this before, hire someone who has successfully done it many times. Many of the early adopters of BI applications found themselves getting lost in the journey. A competent BI guide will keep you moving in the right direction, help you to fill in the gaps in your company's information resources and needs, and create an enterprise-level business intelligence architecture that delivers a rapid return on investment on your existing IT assets, as well as a reduced total cost of ownership.
* Make the journey in a series of short hops. Build incrementally with valuable deliverables along the way. Creating an enterprise BI solution in a single effort is enormously difficult and financially risky. Enterprise BI touches all parts of the business, and integrating information from all these parts can be a very complicated process. Businesses have been much more successful building incremental solutions that fit into an enterprise BI strategy. The incremental solutions individually deliver valuable information on a single aspect of the business, and in aggregate provide an enterprisewide view.
* Plan extra time if you take a less-traveled route. New and boutique solutions will probably require more time to implement and support. There is no such thing as out-of-the-box BI. The best BI solutions combine packaged software with customized components, so be prepared to invest the necessary time and resources to do it right. In the end, you will be glad that your BI solution is tailored to meet the demand for your specific information assets.
* Make it a family trip. Ensure a commitment from both business and technical resources. Implementing a BI solution is a major undertaking, so it is critical that everyone understands the business, technical and cultural impact throughout the organization and actively supports its adoption. To be successful, a BI solution must be driven from the business, rather than from the technical team. And since an enterprise BI solution touches all parts of the business, it's important that each of those parts is represented when the solution is being crafted.
* Keep a flexible schedule, allowing for short side trips. Some of the most rewarding parts of a journey aren't on the itinerary. The discussions about the business that are part of designing BI solutions often lead to surprising insights into the business. Take advantage of those insights and adjust your plans as necessary.
The bottom line is that there is a whole world of information available for companies to use to profitably grow their businesses. With the proper preparation, the right attitude and the right traveling companions, any company can reap the benefits of following the BI Traveler's Roadmap to Success.
Bryan McClain (email@example.com) is the business intelligence practice manager at Innovative Consulting, a leading provider of IT Strategy, Business Intelligence and eBusiness solutions to Fortune 1000 and middle market enterprises. Reach him at (610) 725-2101.
This is a little surprising in one respect because business intelligence is by no means a new thing; BI solutions have been around in one form or another for decades. But the tools and processes for delivering information to workers throughout a business -- the focus of BI solutions -- have matured significantly in recent years.
It's all in the delivery
Although there are many aspects to a complete BI solution, the only one that most people see is the end result - the information that is delivered. The best BI solutions deliver information in a variety of formats using multiple delivery methods, all geared to the needs of individual information workers.
How information is presented and how it is obtained can create huge differences in the usability of the information.
The most common formats for presenting information are:
* Dashboards and scorecards
* Traditional fixed format reports
* Compound reports containing data grids and graphs
* Excel workbooks
* Ad hoc reporting and analysis tools
For obtaining information, there are two common delivery methods: pull and push. With the pull delivery method, reports and scorecards are delivered to a particular location, such as a personal or corporate Web portal, a report library or a common network folder. It is then the responsibility of the information worker to access the information.
With the push delivery method, reports, dashboards and workbooks are delivered directly to the information workers. Newer solutions usually do this through e-mail, but with older applications the delivery method is typically paper copies of reports.
The advantage to push delivery is that the information worker doesn't have to act to obtain the information; delivery is automatic.
The pull and push methods can each be effective, but a new method of delivery changes how information workers acquire and use information. This method embeds information directly in the applications that information workers use on a daily basis, which for most information workers is Microsoft Office.
Solutions are being developed to embed direct access to corporate information within Office documents.
Embedding information into documents is similar to the use of spell checking and grammar checking. For example, if a company sells a product named "flux capacitor," any time those words appear together in an Office document, they would be recognized and highlighted. Users could retrieve information that they are authorized to see about flux capacitors, with results returned within a panel in the Office interface.
Existing pull and push technologies are usually external to the common work processes, requiring a context shift between gathering information and making use of it. With embedded information delivery, information is made available within the context of existing work processes, streamlining the ability to use it.
The pull, push and embedded information delivery methods each have appropriate audiences among information workers. We've labeled the integration of these three delivery methods "Pervasive BI."
With Pervasive BI, information workers can access information with the method that works best for them but can jump to other delivery points as necessary. So when someone opens an Office document containing "flux capacitor," he or she can choose to jump to a library of predefined reports that are related to flux capacitors as easily as he or she can retrieve specifically desired information directly into the document.
This degree of flexibility in information access and the embedding of information directly into ordinary documents are new BI features that have the potential to significantly change how information is accessed and used throughout the organization.
The bottom line is that BI solutions offer a number of ways to deliver information. Consider all the delivery methods when choosing a solution to accommodate the needs of your information workers.
BRYAN MCCLAIN (firstname.lastname@example.org) is the business intelligence practice manager at Innovative Consulting Inc., an IT services company focused on delivering business intelligence solutions. Reach him at (610) 725-2101.