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Real-Time Data Warehousing:
Goals

    Column published in DMReview.com
November 6, 2003
 
  By Simon Terr

In my October DMReview.com article , I discussed real-time data warehousing basics. You may remember there are eight building blocks: goals, road map, customers, budget, system architecture, hardware, software and staff. In the next few articles, I am going to discuss in detail each of these building blocks starting with goals in this article.

1. Goals
2. Road map
3. Cusotmers
4. Budget
5. System architecture
6. Hardware
7. Software
8. Staff

There is a saying I ran across recently that goes something like this, "if you don't know where you're going, any road will do." If you have goals, you know where you want to be. Sometimes goals can be clouded so having a tool to help clarify the goals may prove useful. One such tool is the 4-Quadrant Strategic Assessment Methodology, and here is how it works. First, you draw a quadrangle as shown in Figure 1.


Figure 1: Create a Quadrangle

Instead of using X and Y axes, the quadrangle uses technical and business value axes. The theory behind this is that systems are typically a compromise between technical and business values. Since systems are rarely equally divided between technical and business values, the quadrangle is then divided into four sections (quadrants) to provide further refinement. Each quadrant contains an action recommendation for the systems that fall within it. For systems that have low technical and business values, retiring the given systems should be considered. For systems with high technical value but low business value, the systems should be reassessed to see if they truly provide added value to the business. For systems with low technical value but high business value, an upgrade or even replacement path should be evaluated to ensure the systems remain technically current. Systems that have a high technical and business values are in an ideal spot but they need to be continuously enhanced to ensure they don't fall into one of the other quadrants.

The next step in the methodology is to map all current systems inside the quadrangle. Although this task has the potential to be an in-depth affair, I would approximate the placement of systems, at least initially. For example, let's map the fictitious Acme Corporation's three principal systems finance, logistics and HR:


Figure 2: Mapping the Systems

The final step in the methodology is to generate another quadrangle where you mark what systems you ideally would like to have and in what quadrant. Extending the aforementioned example, Figure 3 shows the ideal system mapping for Acme Corporation:


Figure 3: System Mapping Results

The methodology flushes out the goals in its final step. In the case of our example, the goals happen to be:

  • Create a supply chain system that is world class from a business and technical perspectives,
  • Retire the logistics systems, and
  • Evolve the HR system to be world class from a business and technical perspectives.

The targets of opportunity are identified automatically by the methodology as well. Anything that's not in the quadrant that represents high technical and business value is a potential target of opportunity. In the fictitious Acme Corporation example, the HR and logistics systems are targets of opportunity.

Although the aforementioned example has three goals and a couple of opportunities, in a large corporation or complex environment, the number of goals and opportunities could be substantial. Hence, a process is needed to narrow down the number of goals and opportunities. Identifying return on investment (ROI) for each opportunity is one such process. Unfortunately, the ROI calculation can vary on a case-by-case basis. For example, I've helped a client implement a data warehouse and business intelligence reporting solution that cost $1.5 million. The client's original system was Excel based, and manual data entry played a major part in it. On the surface, the costs of the new system appear staggering in comparison to the original system. Upon closer inspection, the original system encouraged discrepancies and delays that were costing the company in excess of $750,000 annually. With the new system in place, the aforementioned issues disappeared; there was a reasonable two-year ROI period; and the $1.5 million price tag wasn't that steep anymore.

Part of the due diligence of establishing goals is identifying the impacts of the goals. Continuing with our example of the fictitious Acme Corporation, the supply chain system requires revamping existing interfaces with suppliers and partners. Retirement of the logistics system requires retraining and reorganizing the logistics staff to be in alignment with the new supply chain system and organization, respectively. The message is that you need to have a strong idea of what are you getting yourself into, what you are impacting and making sure you are prepared to handle it.

The final step in the process is to create a "goals" deliverable. This deliverable coalesces the goals, targets of opportunity, ROI and impacts. With this deliverable in hand, you can and should tie your goals with the executive management, board of directors, customers and any other impacted parties. The socialization process creates a medium where you get feedback that you can use to mold and adjust your goals into a format that all impacted parties agree to.

In closing, if you have goals, you know where you want to be. If your vision is clouded, use the 4-Quadrant Strategic Assessment Methodology to come up with goals and targets of opportunity. Next, make sure you refine your goals and targets of opportunity as much as possible using ROI and discover the impact of the resultant goals. Finally, put it all together into a single "goals" deliverable and start marketing it.

...............................................................................

For more information on related topics visit the following related portals...
Real-Time Enterprise.

Simon Terr is CEO and founder of KnowledgeSoft, Inc., a provider of products and services in the areas of real time data warehousing and business intelligence. Simon Terr can be reached at knowledgesoft@att.net.

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