Business IntelligenceHow To Avoid Analysis Paralysis

And Create A Competitive Advantage

Richard Vaughn

Suporn Jantastoo

Rajesh Gopalsamy

Business 2005: Hostile Environment

• Profit pressure• Vicious competition• Empowered consumers• Internet services• B2B, tighter integration with partners• Massive data accumulation• Governmental interference• How are you going to manage?

It’s a Jungle Out There – Are You Lost?

Business Intelligence:GPS for Business

Sounds Nice – What Is It?“Current literature on BI has proved to be

fairly sketchy and theoretical. There is no generally agreed conception of BI, but, rather, each author has promoted his or her own idea of its connotations.”

“The term is used by different pundits and software vendors to characterize a broad range of technologies, software platforms, specific applications, and processes.”

Hannula, Pirttimaki “Business Intelligence. Empirical Study on the top 50 Finnish Companies”. Journal of American

Academy of Business. Cambridge; Mar 2003.

Vitt, Luckevich, Misner in “Business Intelligence”. Microsoft Press: Redmond. 2002

BI EvolutionBI is an evolving area derived from:• Need to manage the massive accumulation of

data from OLTP, OLAP, CRM, ERP, legacy systems, external data and other sources

• Need to integrate, analyze, transform data across the enterprise for decision support

• Need to adapt to rapidly changing business environment, competition, reporting regulations

• “Making better decisions faster”

Vitt, Luckevich, Misner in “Business Intelligence”. Microsoft Press: Redmond. 2002

Business Intelligence (BI)• “The processes, technologies, and tools

needed to turn data into information, information into knowledge, and knowledge into plans that drive profitable business action.

• Business intelligence encompasses data warehousing, business analytic tools, and content/knowledge management”

• $75 billion market by 2005 • 2nd only to web portal investment (Forrester)

Source: the Data Warehouse Institute Faculty Newsletter, Fall 2002

Sounds Nice – How Do We Do It?

http://businessintelligence.ittoolbox.com/browse.asp?c=BIPeerPublishing&r=http%3A%2F%2Fwww%2Eittoolbox%2Ecom%2Fpeer%2Fbi%2Epdf

Isolated silos

http://www.m87systems.com/services/bi_cycle.htm

Measure resultsTake action

Gain insight Clean data

Is It Business Intelligence?

Does it:

• integrate data,

• allow user queries,

• adress a business concern and

• enable better decisions faster?

BI Segments

• Information Delivery

• Analysis and Reporting

• Visualization

• Analytics

• Data Mining

Moving from applications to services model

Best of breed or integrated solution?

BI Vendors

BI Best Practices• Define the business case carefully• Cost-benefits analysis (?intangibles)• Alignment with business goals• Management support• Business representation at every stage• Change, vendor and project management• Clean Data!• Technology (last!)

Does this look familiar?

Moss, Atre. Business Intelligence Roadmap. Boston, MA: Pearson Education, Inc., 2003

BI Implementation

“A staggering 60% of BI projects end in abandonment or failure because of inadequate planning, missed tasks,missed deadlines, poor project management, undelivered business requirements or poor quality deliverables.”

Moss, Atre. Business Intelligence Roadmap, p. 5. Boston, MA: Pearson Education, Inc., 2003

Pitfalls for BI Projects• Misunderstanding the complexity• Cross-organizational projects are different• Missing/unwilling business representation• Poor sponsor choice (weak or no sponsor)• Poor staff/project management or skills• No iterative development methodology• No business analysis• Not understanding data/metadata

Moss, Atre. Business Intelligence Roadmap, p. xxi. Boston, MA: Pearson Education, Inc., 2003

Risk Assesment

• Technology

• Complexity

• Integration

• Organizational

• Project Team

• Financial Investment

Moss, Atre. Business Intelligence Roadmap, p. 41. Boston, MA: Pearson Education, Inc., 2003

• Low Risk: supports business workflow seemlessly

• Medium: some manual intervention

• High: significant manual intervention

Implementation

• IDC survey of 400 BI projects

• 1/3 failure

• 1/3 adequate

• 1/3 successful

• Risk of delay, decreased functionality and failure increases with organizational size and BI complexity

Business Analytics Implementation Challenges: Top 10 Considerations for 2003 and Beyond, January 2003 IDC #28728

10 Biggest BI Challenges

1. Budget

2. Data quality

3. User expectations

4. Culture change

5. Time to implement

6. Data integration

7. Training/educ

8. ROI case

9. Business rules

10. Sponsorship

Business Analytics Implementation Challenges: Top 10 Considerations for 2003 and Beyond, January 2003 IDC #28728

BI: IT vs Management • Management focused on training and

education

• IT focused on data quality and culture change

• User expectations and training needs INCREASE with acceptance of BI

• Data warehouse and BI investment GROWS over time

Business Analytics Implementation Challenges: Top 10 Considerations for 2003 and Beyond, January 2003 IDC #28728

Bottom Line

• Huge amount of data to monitor

• Rapidly changing business environment

• Pace of business is increasing

• Increased reporting burden

• Data can be transformed into better, faster decisions

• You need BI to manage your enterprise and stay competitive.

Canadian Tire Company

Business Intelligence

(Richard Ivey School of Business. Business intelligence strategy at Canadian Tire,(9B03E019)

Four Portions of CTC Case Study

• CTC Business Background

• IS Problem at CTC

• BI make IS better, cheaper and faster

• BI champion

Company Background

• The company was founded in 1922

• More than 45,000 employees

• More than 1,000 stores and gas bar operations across Canada

Business line• “Canadian Tire Retail

(CTR) was one of the best-know Canadian retailers, with 390 associate dealers owning and operating 430 stores”

• Canadian Tire Financial Services (CTFS)

(http://www2.canadiantire.ca/CTenglish/h ourstory.html.accessed: August 22, 2003)

Business line (con’t)

• Canadian Tire Petroleum (CTP)

• Part Source- chain of specialized automotive parts stores

• Mark’s Work Wearhouse

Financial Performance 2003

(http://media.corporate-ir.net/media_files/TOR/CTR.A.TO/reports/ar03.pdf)

“We are growing

2003 was a year marked by an unwavering commitment to the initiatives that will deliver the goals of our five-year Strategic Plan. We produced record results and are financially stronger.We are delivering on our foremost priority – superior shareholder returns. And we are growing.”

(Wayne C. Sales President & Chief Executive Officer at CTC)

Four Portions of CTC Case Study

• CTC Business Background

• IS Problem at CTC

• BI make IS better, cheaper and faster

• BI champion

IS Problems at CTC

• From 2003 to 2005 CTC IT strategy focused on simplification, integration and cost-cutting. Therefore, the IT group faced 7 challenges:

1. Training hard-working people to have the right skill set for future programs

2. IT costs were higher than industry standard

3. Business users were not responsible for their IT costs

IS problem at CTC (con’t)

4. Project priority was not set for using business value

5. Adding new systems without consideration of global cost

6. IT reacted only to short-term needs

7. “Shadow IT” business unit groups were not managed and considered in IT cost

Four Portions of CTC Case Study

• CTC Business Background

• IS Problem at CTC

• BI make IS better, cheaper and faster

• BI champion

BI: Chaos at the start

• In 1994 CTC started BI, developing an information warehouse (IW) in order to change CTR’s image and role from that of a wholesaler to that of a retailer

• BI became fragmented and IW evolved on old infrastructure and a poor data model

• Multiple independent data sources, inaccurate data, failing architecture, lack of standards

Sourcesystem

Extract/ Transform/

Load(ETL)

InformationWarehouse

(IW)

Business support

Report Developers

Business users

Reporting and ad hoc analysis

CTAPSCompetitive

DataCTR online

MWWPartSource

Independent Data Source

UserRequest

Launcher Report Developer

Current BI Environment

Sourcesystem

Extract/ Transform/

Load(ETL) Information

Warehouse(IW)

Business users

Future BI

Environment

Financial Data Mart

ABC M/modelsConsolidationsPlan &Budget

Intranet Presentation Layer

Vender Data Mart

Marketing Data Mart

HRData Mart

Supply Chain

Data Mart

IntranetPresentation

Layer

PerformanceDashboard

CTRPortal

Retail Science:

Super users

Meta Base

BI specialists

CTAPS,PeopleSoft,Equity,CTFS,HR, CTR online,WWW,Part Soft, Other

Quick Win Projects

“These projects consist of short-term actions that IT could take to improve BI capacities and to provide users with new information”

Business intelligence strategy at Canadian Tire, page 9

Quick Wins• Access to daily sales promotional data

• Market basket analysis

• Forecasting

• Pricing optimization by region

• Price competitiveness analytics, brand analysis

• Incremental successes were key, but starting to block overall plan!

New BI program goals

1. Develop an enterprise philosophy (Governance)

2. Foster a culture valuing high data quality3. Support and enable the CTR business

strategies and IT strategies4. Improve BI efficiency through cross-functional

synergies5. Define and implement the technology changes

to enable and sustain BI and IW6. Define and implement organization changes

Business intelligence strategy at Canadian Tire,(9B03E019), page9

Four Portions of CTC Case Study

• CTC Business Background

• IS Problem at CTC

• BI make IS better, cheaper and faster

• BI champion

BI Champion

• Andrew Wnek, CTC CIO, worked with CTC system since the mid-90s

• He lead the initial development of the IW and FRAG- separated BI of CFO for CTR

• He wanted to restructure BI environment at CTC in 2005

How to make it successful

• According to Andrew Wnek perspective, there are four areas to foster BI system

1. The restructuring of the IT function to include a specific focus on retail IT

2. The development of an IT vision and IT strategy

3. The engagement of Cap Gemini Ernst &Young to assess CTR’ s BI effort

4. The assignment of a lead business consultant to the BI project

Andrew Wnek SVP IT & CIO

Conclusion

1. Secured the support of top management (Wnek-Project Champion)

2. Redesign business process before technology selection

3. Buy in vendor experience (Cop Gemini Ernst &Young) and let employees learn

4. Implement Incrementally

5. Include users on the development team( Ashok Subramanian and Mary C. Lacity. Journal of Information Technology: Managing client/server implementations: today’s technology, yesterday’s lessons, page 169-186. 1997)

Maximizing Profitability – The Frank Russell Company

• One of the world’s leading investment managers, with assets under management (AUM) of more than $66 billion

• Some of the largest institutional investors around the world turn to Russell to guide investment over $1 trillion worldwide

• Founded as a small brokerage firm in 1936 by Frank Russell in Tacoma, Washington.

• In 2002, it was ranked 11th in the nation in fortune magazine’s annual list.

The Frank Russell Company• Data and decisions fragmented across

business lines

• Data stored in different formats

• Different databases

• No ad-hoc query, manual extraction & formating

• TOO SLOW and EXPENSIVE

Business requirements• Timely Information needed to manage day to

day operations• Business users need access to predefined

tabular reports in which they could make simple changes

• Analysts needed quick responses for new business questions to protect revenue as best as possible

• A better solution was essential to moving the business forward

Picasso Solution

Picasso Architecture

Picasso Sample Report

Picasso Solution Benefits• Reduction in the time spent in gathering

operational data• Everyone has access to the information within

the first five minutes of the workday• The time required to develop a new report has

also improved radically• Each business user has direct and faster access

to the data needed to support individual decision making

• Ability to rapidly prototype the solution

Einstein Solution – Building on Success

• Einstein was launched in May 2001 to support the analysis of revenue from trades performed on behalf of money managers and to study profitability

• The institutional brokerage business unit planned to use Einstein to improve its ability to manage product profitability and vendor relationships

• The project was less complex than Picasso and required a small team to implement

Einstein Solution Benefits

• Company executives are now able to prepare thoroughly for negotiations with vendors

• Managers are able to obtain accurate information

• Managers are able to identify which vendors are receiving high volumes of business

Summary• Successfully deployed 2 BI solutions in 2000 and 2001• Plans to expand these deployments to include European

and Asian data sources to bring a global perspective to its internal operations

• Einstein made brokerage managers easily and independently assess the relative value of vendor relationships and trading volumes and take decisive action to maximize profitability

• Rapid access to formatted information = better decisions, faster!

Business Intelligence at SSM

How to Save Lives and Win a National Quality Award

• Large health care delivery organization

• $1.7 billion operating revenues

• 21 acute care hospitals and other facilities

• Not-for-profit operated by Franciscan Sisters of Mary

• BI integral to performance improvement

Baldrige award recipient profile: www.nist.gov/public_affairs/releases/SSMhealth.htm

• 5,000 physicians (some employed)• 23,000 employees• Hospitals, home health, hospice,

outpatient clinics, nursing homes• Oklahoma, Wisconsin, Illinois, Missouri• First health care organization to win the

Malcolm Baldrige National Quality Award

Baldrige award recipient profile: www.nist.gov/public_affairs/releases/SSMhealth.htm

System Goals• Exceptional Clinical Outcomes

• Exceptional Patient, Employee and Physician Satisfaction

• Exceptional Financial Performance

Sr. Mary Jean RyanCEO

Thomas LangstonSystem VP

SSMIC

Steven HunterRegional President

System VPSSMHC OK

Ronald LevyRegional President

System VPSSMHC STL

William SchoenhardCOO

Mary Starmann-HarrisonRegional President

System VPSSMHC Wisconsin

James SangerRegional President

System VPSt. Mary’s Good Sam

Depaul HospitalCardinal Glennon

SJHC, SSMRISJHW, SMHC

MCO, PO

St. ClareSt. Mary’s Hosp

St. Mary’s care center

Good Sam RegionalHealth center

St. Anthony hospBone and Joint

Information Center

http://www.ssmhc.com/internet/home/ssmcorp.nsf/SSMHC_Org_Chart?OpenPage (modified)

SSM Information Center• 200 employees• $30 million revenue• Expertise in CQI, KPI management• Winner of Missouri Quality Award• Duopoly with system management with CIO

serving at high administrative level

Mo. Quality award application: www.mqa.org/pdf/ssmic02.pdf

U.S. Health Care Crisis• Regulatory burden (Medicare)

• Financial performance

• Market competition

• Standardization problems

• Older sicker patients with more technology

• Variation in care for same problem

• Reimbursement is being tied to quality

• CDO’s must be able to track outcomes

• They must report quality data

• Financial pressure is intensifying

• Quality improvement is difficult to track

• Not all MD’s are employees

• Cannot tell a doctor what to do

Business Driven

“Opportunities existed across all adult hospital campuses for length of stay reductions resulting in large cost savings, and that cost savings due to lower length of stay can have a positive association with improved clinical quality”

Dr. Paul Convery, CMO SSM STL

Medical Management Teams• Develop patient care plans

• Standardization of care, EBM

• Peer to peer interaction with MDs

• Discharge planning

• Patient and MD education

• Quality improvement processesDr. Paul Convery, CMO

Medical Management Report• Centralized report across SSM

• Clinical outcomes, benchmarked

• Cost

• Patient satisfaction

• Safety

Dr. Convery, CMO

Network MedicalManagementCommittee

Clinical Performance Improvement Center (CPIC)(centralized consulting service and data management)

Hospital campusMedical DirectorQI, VPMA, CM

Nurse, HIM

Hospital campusMedical DirectorQI, VPMA, CM

Nurse, HIM

Hospital campusMedical DirectorQI, VPMA, CM

Nurse, HIM

MMR ReportTrendstar analyst

Clinical outcomes specialistCMO

MckessonTrendStar DecisionSupport Application

Chart ReviewsJCAHO Core measures

QI TeamsPatient Surveys

3MHealth DataMangementApplication

MMR REPORT1. Cover sheet: key Medicare LOS, volume;

outcomes for groups; safety outcomes; system KPIs by month, YTD and last 2 years. For high level administration overview

2. Patient satisfaction summary by hospital

3. Performance improvement data sheets: drill down into additional factors with monthly data over the last 12 months, used by PI teams

Safety Indicators• Near miss reports• Surgical site marking compliance• Dangerous abbreviations

System Indicators• Patient loyalty, satisfaction (surveys)• 31-day readmission rate• Unscheduled return to OR or ER

MMR: Patient Groups1. Pneumonia (DRG: 79 & 89)

2. Cardiac Bypass Surgery-CABG (DRG 107)

3. Heart Failure (DRG 127)

4. Hip/Knee replacement (DRG 209)

5. Cardiac Stent (DRG 516 & 517)

6. Acute Myocardial Infarction (ICD9 410)

MMR: Results from BI• Extracted & synthesized from multiple sources• Used to focus efforts on performance

improvement in line with core objectives• Reduced Medicare length of stay 0.5 days• $5 million savings, annualized• Improved compliance with Medicare CORE

measures• Better patient outcomes!• Key to winning Malcolm Baldrige Award

Dr. Paul Convery, CMO

MMR: Patient Outcomes- Improved coronary artery bypass surgery

mortality- Improved congestive heart failure readmission

rate- Improved use of beta blocker with MI patients- Decreased Medicare length of stay

Dr. Paul Convery, CMO

SSM: Lessons Learned• Align with mission and goals• Physician support• Data definitions• Benchmarking• Report formatting (don’t change it)• Distribution• Executive support• Education of users• Link to processes for improvement

Dr. Paul Convery, CMO

• “The use of the MMR and the improvement it tracks were a key component to the performance improvement processes which resulted in SSM Health care winning the Malcolm Baldrige National Quality Award in November, 2002”

Dr. Paul Convery, CMO

Is It Business Intelligence?

Does it:

• integrate data,

• allow user queries,

• adress a business concern and

• enable better decisions faster?

BI Test For Our Cases

SSM CTC Russell

Integrate data? A A A

Allow user queries?

B A A

Adress a business problem?

A A A

Faster, better decisions?

A B A

BI Best Practices

SSM CTC Russell

Defined Business Case

A C > B A

Cost Benefit Analysis

A NA B

Alignment with Business Goals

A C > A A

Management Involved

A F > B A

Business Representation

A A > A A

Remember -It’s a Jungle Out There Are You Lost?

Business Intelligence:GPS for Business

Questions?