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Beyond the Data Warehouse:
Affecting Business Change

online columnist John Ladley     Column published in DMReview.com
May 10, 2002
 
  By John Ladley

Editor's note: DMReview.com is pleased to announce the addition of John Ladley to our lineup of online columnists. John's column, "Beyond the Data Warehouse," will appear the second Monday of each month and will offer new ideas and approaches to BI architectures, methodologies and knowledge-based applications to take your organization into the future. Check out his on-demand presentation "Extending the Return on Information - Collaborative Business Intelligence" at the www.dataWarehouse.com trade show.

Business intelligence (BI) and data warehouse (DW) technologies are now institutionalized and largely commoditized. In spite of many successes, there are still an uncomfortable numbers of shops with unfulfilled potential. Observation has uncovered significant shortcomings in the pursuit of ROI and BI success. Most environments are good at producing reports, but they have "paved the cow path" from a business perspective; that is, all the new shiny information is used for the same old processes.

BI has not been brought to bear on business change. BI and DW should not only create information. Once a report is produced, there is no guarantee that it will be used properly, if at all. There is no guarantee that an ad hoc query will be generated that produces huge benefit. The days of building nonaligned DW are over. Information that is not actionable is no longer worth investing in. It is crucial that businesses begin to extend BI beyond implementing a DW.

This column will look at the salient concepts for extending DW value. Later columns will look at specific techniques to move organizations into a higher level of maturity by extending the reach of business intelligence technologies. As time marches on, we will also explore new technologies, e.g., portals, enterprise information integration, meta data, unstructured data, etc.

Mind-Sets

First, let's adjust the mind-sets. Accept that the data warehouse ROI mantra brushes the tip of the iceberg. Granted, ROI is important, but what is measured to derive ROI?

Extending your use of BI means a more circular view of information usage. Production of reports for convenience becomes secondary. Linear data gathering and ETL processes that pump out "information" can only garner limited ROI. There must be a sense of wanting to mature or evolve the use of information in an organization. The business has to do something with the information. All information produced by BI and DW processes must be explicitly actionable.

Organizations that move beyond traditional BI will operate differently and look for the following benefits:

  1. More presentation of analytics directly to the customer or supply chain partner. Customer scores, customer campaigns and new product bundles can all be produced from analytic structures. The result is higher retention, unique products.
  2. More collaboration with information. Rather than middle managers getting great reports and making their own areas look good, information will be conveyed into other functions and rapidly shared to create collaborative decisions. This will result in more efficient, enabled workers. The return on human capital will increase.
  3. The information produced from the DW can be fed into closed-loop processes, and automatic changes can be implemented. This dynamic reengineering will deeply reduce cycle times.
  4. Nonstructured information becomes as important as data buried in rows and columns. Organizations allow searching of nonstructured data and will merge that information with structured conclusions.
  5. Organizations use information to measure their internal workflows, effectiveness of internal management and monitor metrics that convey worker effectiveness. The result is a constant source of information to fine-tune processes and policies that increase productivity. Work flows and processes can be tweaked via quantitative study of how work has been done.

Alignment

After the mind-set surrounding DW/BI is adjusted, a conscious effort must be undertaken by understanding the interactions of people, technology and business processes with information. New flows, processes and communities should be established that ensure high value usage of business intelligence. A close examination of business processes will help establish better and on going ROI. This is accomplished via explicit alignment of BI/DW investment with business needs.

As usual, the devil is in the details. In addition, talking about changing business models, human capital and unstructured data smacks of business process reengineering or knowledge management. Historically, these terms have detractors within the corporate world. However, applying specific techniques to align business projects and information projects results in highly adaptive second and third generation DW.

Organizations that align their extended BI frameworks with their business will:

  1. Look to the DW/BI area to provide solid reduction in costs, cycle times and increases in revenues.
  2. Use business processes that maximize the value of information by linking business goals and objectives to use of the DW.
  3. Create new business actions based on scenarios of ideal information and knowledge, then strive to implement the new processes.
  4. Overcome information management issues such as semantics by creating a core, federated information and knowledge map that is based on business measures.

Maturity

Finally, the new processes and technology will contain mechanisms to support and measure workflows that are BI enabled. As efforts create new business models the enterprise is presented with an opportunity for valuable insight into self- measurement and how it reacts to information. The recipient of the BI results must be explicitly "incented" to use the information. Of course, the information must be of adequate quality and timelines to support taking action. An enterprise that is maturing will use its DW/BI framework to:

  1. Monitor and manage the communities (not departments) that use information.
  2. Measure information usage and create a baseline for organizational learning.
  3. Measure inward-facing clicks as users interact with the DW/BI environment and understand how information really flows.
  4. As organizations get more savvy with actionable information, they begin to blend in unstructured content with traditional row and column data. Information management and content management will merge.

Summary

Basing the evolution of a corporate DW/BI framework on new business models and actionable information usage places business intelligence into an endemic role in the technology infrastructure. DW is removed from center stage and relegated to the role of effective technology.

Moving beyond the data warehouse means developing a vision of how an organization would be more efficient and experience a greater return on their information assets based on thorough application of business intelligence capability. This means process and organizational issues must be confronted and measured. Business intelligence and the data warehouse moves from the role of end-game technology to the key component of strategies and business models that will propel leading companies and organizations beyond their competitors.

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For more information on related topics visit the following related portals...
Business Intelligence (BI).

When John is not writing poetry as a hobby, he is a director for Navigant Consulting, which recently acquired KI Solutions, a management consulting firm specializing in knowledge and information asset management and strategic business intelligence planning and delivery. Ladley is an internationally recognized speaker and, more importantly, hands-on practitioner, of information and knowledge management solutions. He can be reached at jladley@navigantconsulting.com. Comments, ideas, questions and corroborating or contradictory examples are welcomed.



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