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The Big 'I'

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CIOL Bureau
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"It is not clear that intelligence has any long-term survival

value" -Stephen Hawking, British theoretical physicist



For our friends dealing in intelligence, this is not good music.

But clichés apart, the consensus is that Business Intelligence or BI as it is

popularly called, is a useful tool; not the Harry Potter-kind magic wand as some

would desire, but still fairly helpful.



The consensus also is that BI is an oft-abused term. Working on

Excel is a kind of BI, because one is making some sense of the data he has. But

for all sensible purposes, we are taking into account and talking of the

essential four-data ware-housing, extract-transform-load (ETL), analytics, and

reporting.



It is here that some CIOs report skeletons in their cupboards.

Take the example of Monsanto, a leading provider of agricultural products and

solutions. It has been using a BI solution since 2000 that helped successfully

plan/manage its forecasts from a financial and sales perspective. But there are

also expectation mismatches, as the company's IT head, Anand Kumar outlines.















I

Suggest...


face=Verdana color=#ffffff size=1>Thoughts from CIOs, on getting

started



Anand Kumar,

Monsanto:
Start off with a simple plan. The complexities of

enterprise data integration to maximize BI use could be an extremely challenging

exercise. I would recommend having a business lead for the project as well as an

IT lead. This will ensure equal accountability for managing objectives and

delivery.



Two, ensure that organizational change

management is done to ensure what is called 'information democracy' where every

individual has the knowledge and insight to do his job from a strategic and

operational perspective. What you know rarely causes problems, what you don't

know is the issue. Decision making processes must be streamlined to ensure that

valuable information is shared and acted upon. Primary challenges to BI project

success lies with the people, not technology. Ensure that vendors solve real

life examples in the qualification phase, while selecting a BI tool.



Lastly, keep in mind that reporting is a

trained thought, while BI is a train of thought. It is key to ensure that we are

not governed by what we know in terms of data aggregation, but explore the outer

boundaries of information correlation.



CN Ram, HDFC

Bank:
Strong executive sponsorship is key. Create early wins to prove

the concept and fund the investment. Business Intelligence is something one can

never get done with. We are now leveraging the core DWH engine to act as a major

integrated data source for generating Risk Intelligence and feed into down

stream solutions ranging from Basel II compliance, Anti-money Laundering etc.

Availability of good technology skills, choice of cost effective technology

stack, good partner, and BI vision are all necessary elements of a successful BI

strategy.



Conceptual idea 1: Response to user's need for data on a timely

basis.



Reality: "While we have been able to develop some good reporting

capabilities, which help in the forecasting and the planning/reporting arenas,

what Gartner calls 'information democracy' has not yet set in. We are still

faced with challenges in terms of data integrity because of the often-used

paradigm 'garbage in, garbage out'. Systemic thinking evades us, but the good

thing about it is that users are becoming more and more aware of the challenges

of working with compromised data." So Anand is now looking at dashboards and

analytics as the way to go forward.



Conceptual idea 2: Delivers Just In Time (JIT) information.



Reality: "The information lifecycle is often prolonged due to

various issues in the supply chain and other customer facing departments, and,

often, infrastructure/training/systems approach are key challenges in this arena

that prevent JIT information to be available. There are also issues surrounding

getting partners/suppliers to participate and collaborate in information

lifecycle management to shorten the time taken for information to travel in the

chain."



Conceptual idea 3: Decreases cost and improves operational

efficiency.



Reality: "We have been able to reduce some cost and improve some

aspects of operational efficiency, but capturing RoI on this has been extremely

challenging since, in a sense, resource management and planning are areas where

we have had the most impact. Operational efficiencies on a large scale can only

be realized once we have all the key stakeholders involved in the BI

process-suppliers, retailers, and our partners as well."















CIO Check

Points


face=Verdana color=#ffffff size=1>Thoughts on BI strategies from

Vendors...



size=1>Microsoft 







  • RoI: Typically, BI projects deliver a

    quicker return on investment than most other projects. However, the CIO really

    needs to consider the cost at which they are able to get that return, while

    implementing the strategy.





  • Time to Market: The constantly changing

    environment, demands that the time to market be really short and the solution

    have the flexibility for it to be modified according to changing business

    requirements 





  • Strategy: The third important aspect the

    CIO must consider is to have a strategy, which covers all the different types of

    consumers of data. Widespread use of BI within an organization will help to make

    the entire organization take better, more informed decisions





  • Top Management Support: Top management

    support is a major driver in successful execution of the project. Involving

    business and training users in the requirement definition is another key to

    success.



Team

Computers
 







  • Keeping self-service as a model,

    fundamentally, is important. 





  • Choice of technologies, which take

    advantage of the lowering costs of Memory and CPU Power





  • Tools which can allow pervasive BI

    deployment, by way of technology simplicity and cost would be key for a

    successful BI strategy 





  • Rather than focusing on creating

    integrated data warehouses as the first step, if quick result tools are selected

    for direct data integration and reporting, from multiple data sources, the data

    needs of the organization can be sensed.





  • Tools for dash-boarding/score-carding

    would be an important need as part of the BI strategy 





  • Creation of a BI team inside the

    organization, which shall define the BI needs and demands, is a must 






  • More than selecting a tool, what is

    important is to have the right support/implementation partner and engage them

    with a long term association



SSA

Global
 







  • It is essential that there is

    integration between the BI application and the ERP system so that data can be

    fully utilized



Happy Home: The HDFC Bank, on the other hand, has been

able to overcome such challenges through an enterprise data warehouse solution,

Reveleus, a product of i-Flex. It started building the warehouse about five

years back and has grown in size and complexity now. The bank, says IT head CN

Ram, has seen immediate improvements in profitability through cross selling

opportunities and decreased channel costs through a better understanding of the

customer's channel utilization.



The bank is also using the data to develop targeted marketing

campaigns and to offer new services and products. The data warehouse is now the

primary source of information for its entire retail business. In addition, while

the data volume has doubled over the last year, the resources needed in the MIS

department to maintain the systems have remained the same.



"Using analytics from our warehouse, we have been able to

successfully migrate customers to direct banking channels, bringing down the

share of branch transactions from 60% to less than 35% now. The turn-around for

retail credit risk related MIS as well as information on collections management

has reduced drastically from days earlier to a few minutes now," Ram tells. And

the RoI went much beyond this.



border=0>







BI @

Oracle







Oracle India recently introduced Oracle

Business Intelligence Suite, which is an open, standards-based software,

designed for all users and business processes throughout the enterprise. Oracle

Business Intelligence Suite unites Oracle's Business Intelligence (BI)

middleware with Siebel Business Analytics. When combined with Oracle E-Business

Suite, Oracle's PeopleSoft Enterprise, Oracle's JD Edwards EnterpriseOne,

Oracle's Siebel pre-built analytic applications, the Oracle Business

Intelligence Suite addresses the complete spectrum of BI and analytical

requirements, including historical, real-time, and forward-looking insight, with

data integration, and management. The suite, along with other software

components of Oracle Applications, Oracle Database, and Oracle Fusion

Middleware, delivers enterprise-wide business intelligence that is

'hot-pluggable' into existing operational

systems.



Customer data integrated in the warehouse enabled HDFC to

understand the customer at an individual level rather than at the portfolio

level. The ACRM tools further helped it to use this data to build profitable

conversions with customers.



Continuing with the lift HDFC's product managers received with

improved credit card activation, higher credit, and debit card spends

significantly improved cross sell ratios; the year 2005-06 witnessing over 650

unique campaigns. More than 60% of these campaigns use a statistical model.

Marketing analytics now focuses on strategic priorities such as proactive

retention and balance build up.



The bank now has over 10 mn customers who avail

of one or more of its products and services. It can now know how many products a

particular customer avails of; how frequently he uses a particular product; and

the correlation between the usages of one product with that of another. Each of

these answers provides it with valuable insights into customer needs, helping

the bank keep them happy.



The analytics supporting credit risk helps the credit manager in

optimizing the risk-reward ratio by monitoring parameters using analytical

domains, reports, key performance indicators, and dashboards in addition to the

following:







  • Factors that influence the business trends and pattern of various

    products





  • Factors that contribute to the performance of each product

    vis-à-vis the others





  • Customer behavior with respect to vintage





  • Credit risk of lending portfolio





  • Performance appraisals based on various vintage cuts





  • Sourcing channel reviews



Right Pickings: If enterprises need the right answers to

difficult questions, the market has to have the right vendors with varied

portfolios. India, when compared to the US or Europe, is still in the nascent

stage as far as BI adoption goes. It's very small, and very new with

Frost&Sullivan pegging the market close to $45-50mn.



So what are the choices for Indian CIOs? The country has pure-play

players such as SAS, Business Objects, Cognos, and big time vendors who bundle

BI solution along with other products-SAP, for instance, bundles BI with

Netweaver and MySAP, and Microsoft bundles BI solutions with SQL server. The

preference for either of these two categories would typically depend on the

needs of the enterprises. "One is functionality. A bundled product that comes in

with SQL server or MySAP would kind of satisfy your desire to do elementary BI

reports. But if you want advanced analytics and reporting methodologies, then

one would start looking at pure play vendors," says Rajat Sharma of

Frost&Sullivan.



Yes Bank, which is planning to implement a BI solution, has

similar aspirations. It is looking for a platform to address its enterprise

requirements of Basel II Reporting, Anti-moneyLaundering, Asset Liability

Management as well as MIS Reporting. The technology framework needs to have a

number of components such as an ETL tool, staging area, data warehouse,

database, cube, and a reporting platform, which support different plug-ins or

adapters to different databases and file formats in order to provide a flexible

way of working. For the bank, it is important for the system to provide a

meta-data layer where definitions about data extraction, translation, and even

the complex analytical queries can be externalized leading to both flexibility

and putting the power in the end-users hands. 



"A good mathematical analysis and

computation tool should also be provided for doing sophisticated correlation,

regression, and other analysis required for creating campaigns and gaining

business insight.  It is very important that different business segments within

the bank can customize the views and reports according to their

requirements. Last but not least, the product should come with some standardized

data models to address Basel II to ensure that the implementation is rapid,"

demands CIO Aditya Menon.



Other enterprises are demanding that their data is represented in

every division or department of their organization in terms of empowering either

divisions or the user to take informed decisions based on a single view of where

the company is. So, if one has divisional tools without a single view, the

decisions made by one department will contradict decisions made by another. So

many companies are actually demanding that there is consolidation of vendors

that they are dealing with.



In a competitive, dynamic world, they cannot shift

the blame between vendors because of the errors that occur often. "Customers are

also demanding that we speak their language; so BI has to be directed towards

their industry. They are also demanding speed to intelligence, time to

intelligence, ability to implement very quickly, deliver short-time RoI. That is

because this investment is not incorporated into their transactional

system-on-time investment needs to derive short-time RoI," says Don

Cooper-Williams, director, Marketing and Alliances, Asia Pacific, SAS.



But are customers really looking for integrated suites? SAP

executives have been saying that BI will cease to be a market in about five

years. Executive Board Member, SAP AG, Shai Agassi told Dataquest sometime ago

that BI is not an isolated thing: "It's like saying that in your business, there

are some people who think and some people who don't. You can't have that. People

who don't, need to think. You need an integrated analytics market, not a

separated disconnected one. That's what we are doing right now.



























Anand Kumar, IT head, Monsanto


Sudipta K Sen, CEO and MD, SAS India


Aditya Menon, CIO, Yes Bank


Don Cooper-Williams, director, Marketing and Alliances, Asia Pacific, SAS


'Operational efficiencies on a large

scale can only be realized once we have all the key stakeholders involved in the

BI process-suppliers, retailers, and our partners as well'



-Anand Kumar, IT head,

Monsanto



'The operational systems of Indian

enterprises have matured and they are increasingly looking to differentiate

themselves from peers'



- Sudipta K Sen, CEO and MD, SAS

India



 



'The product should come with some

standardized data models to address Basel II to ensure that the implementation

is rapid'



-Aditya Menon, CIO, Yes

Bank



 



'Customers are also demanding that we

speak their language; so BI has to be directed towards their

industry'



-Don Cooper-Williams, director,

Marketing and Alliances, Asia Pacific, SAS



 



Pure play vendors such as SAS counter this by saying that SAP is

making an error in judgment. There is a huge difference in creating data from

transactional applications and driving that data into normal data warehousing

type data warehouses-those data warehouses are not optimized for BI. They are

not optimized to draw data from more than one database. They cannot work across

multiple databases and they do not have the scalability and efficiency that is

needed from a BI point of view.



"They are making these statements because growth

in the ERP market is slow at the moment. And the growth for BI is beginning to

pick up. Secondly, they have not developed the applications for the solutions

that will sit on top of their transactional systems. This requires an immense

amount of R&D. The question I would ask is they are not going to divert

their R&D from transactional area into an area now called BI. They must be

looking for companies for acquisition. However, if you look at the top

acquisition companies in the market place, none of them have an integrated

platform. So, there is a lot of opportunity and growth prospects in the market

place," explains Cooper-Williams.



The third thing SAP and similar vendors claim is that they might

buy the technology they do not have. "But they don't have the culture within

their organization of selling this. So, they would need to drive and build

that," Cooper-Williams reacts. The issue with BI as opposed to typical

transactional-type applications is that there are time issues around them-around

governance and compliance-time schedules about why somebody would want to use

BI.



"By and large, these companies have failed to even give good reporting from

transactional system and enterprises had to use third party reporting

capabilities. You need to build an extreme amount of credibility in the market

place. I believe they will have some traction and the traction will be in the

large accounts where they are dominant. None of them have done anything more

than build CRM from a transactional point of view, build any intelligence, Sibel

included. These organizations are single in terms of databases they work on.

Whereas we, over the years, had a more catholic view of the market place, are

agnostic to databases, are built on world-wide standards, and have huge customer

bases that are recognized," he says.



Fresh tale: CEO and managing director of SAS India

Sudipta K Sen feels that the operational systems of Indian enterprises have

matured and they are increasingly looking to differentiate themselves from

peers. Mature companies are, therefore, looking beyond the classical BI usage of

reporting and are moving into predictive analytics. A good example is an Indian

bank with a network of 560 branches, which implemented SAS enterprise-wide a

year ago.



The bank wanted a reporting platform that is web-based. A lot of

reports went out as Excel. Spreadsheets are typically unprotected and data can

be shared across the organization, even outside the organization. It wanted that

somebody who didn't have the rights to a data should not see it. It should be

protected so that it cannot be shared outside the organization. Third, it wanted

that people get only that amount of data, which was required-since they pull it

over the web, huge reports can waste bandwidth on e-mail.



Earlier, these reports usually were sent during working hours,

which meant that it was a time when the branches were crowded and people were

trying to access the core banking and loan systems. The bandwidth can get

clogged up by e-mail if multiple MBs of files are sent. Whereas, the reading of

the reports typically does not happen during peak hours; it happens after hours.

So having a web-based platform meant that people will only pull reports down

when they needed to read it. The bank managed to shift a lot of bandwidth

consumption from peak to non-peak hours.



The BI solution is yet to be fully rolled out across the

organization. But the bank says the RoI envisaged, has started to roll. The

tangible RoI was bandwidth. The intangibles were increased security, increased

efficiency because only what is relevant is coming-once somebody has to come

down from going through multiple MBs of data to just having the relevant cuts,

it makes a huge difference in efficiency. The bank had a decent enough view of

the business even before the present solution was implemented. What the

enterprise intelligence platform did was to present it much better and target

information to the right people.



The deployment challenges were mainly cultural in nature. People

who have been writing SQL scripts and that kind of queries, churning out magic

out of a database that a layman cannot understand, seem to loose their position

of power. Now, even a business user could tap into the system and pull out

reports. The other thing is insecurity, because there are specific skill sets

that are no longer required.



CIO advice, therefore, is to start managing re-skilling right from

the beginning; be ready for resistance from people whose skills would become

redundant. Two, look at the cost of ownership and not at the cost of

acquisition; ensure that deployment is part of the acquisition plan. Initially,

the bank in question did not put deployment costs as part of the fixed costs. It

had estimated deployment costs, cycles. Cultural change issues come up and delay

things. Then, variable costs are likely to spiral.



-Goutam Das

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