Business Intelligence Current Market Drivers and Emerging Trends

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April 2006 visibility A business is agile when it can anticipate the dynamics of emerging trends and strategically drive processes so that it can take advantage of opportunities as they emerge. Enterprise BI enables the agile business, translating internal and external data into knowledge, and supporting fact-based decision-making about today’s operations and tomorrow’s opportunities. BI supports the continuous alignment of business activity with strategic objectives. Many organizations are adopting new BI tools and an enterprise-wide data strategy to drive growth and profitability in a rapidly changing business environment. Organizations which have already realized the value of BI are expanding the use of BI to more users at all levels, and are adding higher-value BI such as corporate performance management and data-information management initiatives. BI has achieved recognition as a critical asset for the successful enterprise – BI is the #1 spending priority for CIOs in 2006 according to Gartner. The extent to which an organization’s full potential is met depends on how well it aligns BI with strategic objectives and integrates BI into ongo- ing business processes.

2 Table of Contents Introduction 4 1980s: A Focus on Simple Activity Reporting 5 1990’s: Process Automation and the Emergence of BI 5 2000-2005: New Channels and Business Intelligence Standardization 6 2006+: Process-Centric BI 6 Ten Trends Driving Business Intelligence Today6 Trend #1: The Importance of Data Quality 6 Trend #2: Enterprise BI platforms – Standardization and Consolidation 7 Trend #3: BI Managed Services 8 Trend #4: The Importance of Enterprise-Wide Visibility 8 Trend #5: Regulatory Compliance Requirements 9 Trend #6: BI for All Levels of the Organization 9 Trend #7: Corporate Performance Management 10 Trend #8: Real-Time Analytics 11 Trend #9: Multi-Channel Customer Analytics 12 Trend #10: Offshore Sourcing of BI and Analytics 12 Conclusion 15 About Unisys 16 Sources 17

3 Introduction reporting solution which works seamlessly with its various data sources as a single, trusted point of reference for all Is your business Agile? Consider the following examples of corporate information. Enterprise Business Intelligence (BI): Business Intelligence (BI) describes the tools and techniques • Scalability: Tesco implemented sophisticated reporting to which enable an organization to access a wide variety of data support its growth strategy and ensure consistent practices; sources, convert the data into knowledge, and use that knowl- • Management Drivers: Deeper and wider business insight, edge to support effective decision making. A complete BI a more collaborative work environment, a comprehensive solution typically includes hardware and software for the data customer view, and reduced time to achieve ROI on tech- warehouse and tools for On-Line Analytical Processing (OLAP), nology investments. data mining, and presenting formatted output to users.

• Transparency: T-Mobile granted departments across the The competitive advantage gained from capitalizing on busi- enterprise an integrated view of the organization, enabling ness knowledge makes BI tools, consulting, and the sup- each team to gauge how well they were meeting customer porting infrastructure a high-demand technology area. expectations;

• Reliability: Prudential Corporation Asia deployed a Organizations face a growing volume and complexity of data; reporting solution that delivered information in an easy translating this data into business insight requires strategy to read format, replacing a manual and time consuming and expertise. Unisys offers a unique value proposition to reporting process; the BI market because we provide end-to-end BI expertise across the entire BI technology ‘stack’, including hardware • Visibility: The University of Texas at San Antonio built an and software to support the data infrastructure, strategic information system which tracks and reports on the moun- consulting services, and leading BI platforms from market- tain of data generated every day by 26,000 students; leading partners such as Business Objects, SAS, Microsoft, and Hyperion. • Security: Medtronic built a standard enterprise-wide

DATA SOURCES STAGING AREA DATA WAREHOUSE DECISION SUPPORT

Operational Systems (OLTP)

Specialized Applications (ERP) DATA Reports MARTS

Desktop/Legacy Data BIS-Dashboards

EXTRACT TRANSFORM DATA CLEAN AGGREGATE WAREHOUSE External Data OLAP

Website Data Statistical & Finantial Analysis

Business Intelligence

4 The Evolution of Business Intelligence one), but any knowledge created and stored within the spread-mart is unavailable to the rest of the organization. 1980s: A Focus on Activity Reporting 1990’s: Process Automation and the During the 1980s, organizations typically built reporting applica- Emergence of BI tions in-house around primary operational systems to address focused requirements. Although these early examples of BI In the early 1990’s, organizations began to invest heavily in met immediate reporting needs, they were limited by the data, packaged enterprise business applications such as enter- performance, and capabilities of the systems around which prise resource planning (ERP), customer relationship man- they were built. Additionally, this one-by-one development agement (CRM), supply chain management (SCM) and other resulted in a proliferation of “mini-BI” applications, each requir- specialized applications from vendors such as SAP, ing separate software, skills, and IT support. These “mini BI” PeopleSoft, Oracle, and Siebel. The goal of these applica- and specialized niche applications are still used today, scat- tions was to automate the execution of business processes tered throughout the enterprise – Business Objects estimates and make actionable information from these processes that organizations use on average 13 separate BI tools. more readily available. These packages succeeded in delivering the former goal, but failed in the latter, because they A common example is the “spread-mart”, a spreadsheet were focused on achieving automation and control, rather which holds a complete set of data extracted from a primary than extracting real value from information. system or data warehouse, and the resulting data-transla- tion, analysis, and presentation of results. The spread-mart Realizing that the strategic business value of IT lies not in demonstrates a common attribute of “mini-BI” systems: it process automation itself, but rather in exploiting the informa- meets the needs of a small group of users (perhaps only tion these processes generate, enterprises began looking for

• New innovations in BI technology to meet customer requirements • BI becomes an input to continuous process refinement Process Centric • BICCs provide central control, and prioritize standardize, BI and BICCs and apply best practices to BI products.

• Heavy investment on package applications for ERP, CRM, SCM New Data • Data Warehouse projects to achieve multiple systems Channels and BI • Early BI developments generate knowledge from Data Warehouses Standardization

• Increase in types and complexity of data from the Web channel, Process including suppliers, partners and customers Automation and • Enhancements of Data Warehouses and BI tools the Emergence • Growth in the importance of value-added BI of BI • System complexity and high costs drive the move to BI platforms

• In-house development of simple reporting applications; some use of Simple Activity niche applications Reporting • Knowledge limited by features of operational systems Tactical ValueTactical Value Strategic

1980s 1990s 2000s 2006+

Figure 1. The evolution of Business Intelligence: from Operational Reporting to a Strategic Necessity

5 ways to archive the mass of data being generated as a foun- 2006+: Process-Centric BI dation for reporting and analysis. This need motivated the first Data Warehouses, and a credible body of knowledge BI has gained widespread recognition as a critical asset in began to develop around the collection, organization, align- the enterprise. Today, organizations continue to use BI to ment, and presentation of data from multiple systems. Data enhance the quality of decision-making and enterprise visi- warehouses provided the necessary foundation for the devel- bility, but the focus is turning to the value BI can bring to opment of increasingly effective BI tools and techniques. entire business processes. “Process Centric BI” uses the insight gained from business processes as an input back After investing in data warehouse projects, organizations into those processes, creating a feedback loop which drives began to look for ways capitalize on their data to make better the continuous refinement throughout the entire organiza- decisions, enhance the visibility of business activity and per- tion. With process-centric BI, BI is a catalyst for excellence, formance, and to refine the processes themselves. These instead of simply an output of operations. To solidify BI’s drivers established the field of BI as a high-value competitive position as an enterprise-wide asset, organizations are cre- asset in the late 1990’s and along with it a refined discipline ating Business Intelligence Competency Centers (BICC) to for converting the mass of data captured by the enterprise sponsor, prioritize, standardize, and control BI projects. into actionable knowledge and business insight. The evolution of BI from a tactical asset in the 1980’s, to a 2000-2005: New Channels and BI strategic asset in the 1990s, to a process-centric asset in 2006 Standardization and beyond demonstrates the value of BI as a tool for optimizing the enterprise, and a key element of organizational success. The growth of the Internet as a channel for sales, marketing, Packaged BI Customer User Microsoft and distributed data transfer was both an opportunity and a Applications Websites Applications Office challenge to BI deployments. The Web created an explosive growth in the volume of data which organizations capture, and also a new complexity of data, with new types of information such as website ‘clickstreams’, customer purchasing patterns, Unified Web-Browser Interface and even customer email addresses. Finally, new application and storage servers to support web-based applications required expanded technology deployments such as Enterprise Application Integration (EAI) which connects disparate systems together in order to share information between them. OLAP Tools Reporting Query amd Analysis Compliance Reporting Advanced Analytics EPM-Scorecards & Dashboards

Many Data Warehouse projects were upgraded to accommo- Integrated BI Platform date data from the new Web channel, and enhanced with (A Single Management Console using Services Oriented Architecture) Unifired User Management Unified Security Management programs of continuous improvement using new BI and data Alerting Service Performance Management management techniques. These enhanced data warehous- Reports Encyclopedia Common Devoloper Services Schedule & Broadcast Agent Natural+Language Query es are tightly aligned with the strategic objectives of the Enterprise Information Management organization, and enable the organization’s next steps in BI Metadata Management Extract Transform and evolution: BI Standardization. BI standardization integrates Metadata Linez Load (ETL) a patchwork of incompatible BI systems onto a single BI platform, providing a single, trusted system for Query and EAI Analysis (Q&A), Corporate Performance Management (CPM), Operational and Enterprise Information Management (EIM). External Data Systems Data Data Sources (CRM,ERP) Warehouse Marts Operational databases Decision-Support databases

6 Ten Trends Driving Business a reality despite the clear linkage between data quality and Intelligence Today sound decision-making. Many processes to enhance data quality have resulted in increased cost, but not increased Business Intelligence (BI) has become a refined discipline, accuracy or timeliness of data to support critical decisions. gaining greater acceptance as a competitive asset to sup- Price Waterhouse Coopers port strategic decision-making, enterprise-wide visibility, and Global Data Management Survey 20042 continuous process improvement. According to Gartner 66% of respondents reported a “fair” or lower degree of survey, BI has become the #1 spending priority on CIO’s confidence in their data. agendas, up from #2 in 2005 and #10 in 2004.1 Only 45% formally test and measure the quality of their data. Although many organizations already have some degree of BI Data represents an average of 37% of the worth of in place, successful organizations are recognizing that BI is a each organization. critical asset worthy of continuous enhancement. Many Only 24% of respondents using 3rd-party data attempted enterprises are upgrading their BI systems to take advantage to measure its quality. of new technologies and approaches, and others are stan- 59% said that senior management does not pay enough attention to data quality. dardizing their BI ecosystems on a single BI platform to reduce costs and create a single “version of the truth”. DaimlerChrysler Corporation, a world leader in the automo- In this paper we discuss the top ten trends shaping BI today, tive industry with sales over $15 billion, relies on a cus- including strategic approaches which maximize the utility of BI tomer database deployed throughout the enterprise to and the innovations that are advancing the field of BI. enhance the effectiveness of high-value functions such as marketing, sales, and customer service. In order to gain Trend #1: The Importance of Data Quality the maximum business value from this wealth of customer knowledge, DaimlerChrysler has consolidated all separate Data is the key ingredient for BI. However, data quality customer databases and implemented enterprise wide cor- remains a serious barrier for organizations seeking consis- rection, validation and enhancement of customer data. tent visibility into enterprise-wide activity and performance. Data quality problems include duplicate data, inaccurate • A Commitment to Data Quality results in improved data, unclear / misinterpreted / miscalculated data, and decision quality, greater process efficiency, and enterprise-wide visibility of performance and business activity. data which represent the same object in different systems • Data Quality also enables confident and timely regula- but are misaligned in the data warehouse. tory reporting.

Poor data quality misrepresents business activity and can lead to inaccurate decisions and incorrect regulatory report- With a rigorous commitment to continuous upgrading, meas- ing or, even more dangerous, bad decisions which seem to urement and analysis, DaimlerChrysler has achieved data be supported by facts – this type of error is difficult to quality levels in excess of 98%. Additionally, the data quality detect and may impact several business cycles before it is initiative has led to other measurable benefits: resolved. Misaligned or unclear data leads to inconsistent • Higher-quality of strategic decision making; decisions, disagreements within the organization, and a general lack of confidence in BI among users. • Enhanced effectiveness of marketing and customer support; and Although the number of organizations which claim to have a • An increased confidence in BI and the data warehouse data quality strategy in place is increasing, there has been leading to increased use.3 little improvement in the effectiveness of corporate data management – data quality remains an intention rather than

7 Trend #2: Enterprise BI platforms – “The study shows that although a business analytics imple- Standardization and Consolidation mentation is a substantial investment for an organization, it can also deliver substantial benefits.”6 In many organizations BI applications exist across all functions and at all levels of the enterprise. Forrester estimates But Gartner warns: that most of the global 2,000 companies have between five and 15 BI solutions in use4, creating a strain on IT to “Most enterprises still purchase BI applications on a ‘one- license, maintain, and support the user community. This off’ or tactical basis in response to specific user demands. patchwork of incompatible BI systems also impedes compa- This can create a patchwork of applications that is difficult nies from realizing many of the benefits of BI and data ware- to maintain and support.” house investments. As Gartner puts it, “Through 2005, broad-scale adoption of packaged applications will prevent By establishing a common BI standard, an organization sets more than 50% of large organizations from establishing com- a foundation into which most reporting and analytic applica- plete perspective through [Business Intelligence].”5 tions will be integrated, consolidating all but the most specialized applications, and delivering maximum business This patchwork of incompatible BI technologies hinders value to information consumers at all levels. enterprise-wide visibility of activity and performance, and prevents the organization from achieving expected returns France Telecom (FT) is a leading telecommunications provider on investment in data warehouses and operational systems with over 91 million customers in 220 countries. Before imple- like Enterprise Resource Planning (ERP), and Supply Chain menting enterprise-wide standards, each regional branch and Management (SCM). business unit maintained its own BI tools and IT budget. The coexistence of 140 separate BI deployments with dissimilar The benefits of consolidating the patchwork of hardware and data, technologies, and versions made application mainte- software supporting BI onto a single platform include: nance and integrated reporting extremely complicated.

• Business Cost Savings: Reduced license, maintenance, FT implemented a single BI platform for retrieving and analyzing and training costs; data from finance applications, CRM, HR applications, and doc- • Technology Cost Savings: Reduced costs of learning, ument management systems. The key to making BI standardi- administering, securing, and integrating various BI tech- zation a success lay in the quality of support that was given to nologies, and reduced cost of maintenance on the array both project managers and end users. A central BI competen- of hardware required to support multiple systems; cy center (BICC) was created to oversee BI implementations, maintain consistency across BI projects, and share best prac- • Customer Drivers: A consistent customer experience, tices between teams. By implementing a corporate-wide stan- increased customer satisfaction, and improved credibility dard for BI and data management, FT considerably reduced in the customer’s eyes; and data inconsistency and enabled visibility into operations and

8 • Management Drivers: Deeper and wider business insight, information-sharing across the entire organization. a more collaborative work environment, a comprehensive customer view, and reduced time to achieve ROI on technology investments.

A 2002 IDC study of BI projects undertaken in 43 organizations showed an average ROI of over 430%. According to IDC:

8 • Predictable Technology Expense: The cost of BI outsourc- • A Standard BI Platform delivers a “single version of ing is a predictable, recurring expense instead of large the truth” for consistent decision-making across the enterprise. unpredictable technology expenses for maintenance, train- • Fewer BI products to learn and support means lower ing, and software licenses. costs of training, management, and maintenance. • A single BI platform means a single point for modifica- Additionally, there are many options for structuring managed tion and information security. services agreements: • User acceptance is improved with a single BI tool to • Complete Hosting: The service provider hosts the client’s learn, encouraging self-service. BI applications and data warehouse, which is periodically- refreshed from source systems. The data warehouse can Standardizing BI systems onto a single platform can result be configured to reside inside the client’s network firewall, in significant cost savings in support, maintenance, and soft- even if hosted offsite. ware licenses. Additionally, a BI standard creates alignment between business units, a shared confidence in consistent BI • BI-Only Hosting: The BI application resides at the service results, and a higher return on technology investments. provider and accesses the client’s data warehouse from its location at the client’s data center. Trend #3: BI Managed Services • Hybrid Hosting: The BI application or data warehouse are hosted by the service provider. For clients without a data As a result of recent advancements in the performance and warehouse, the service provider may host a data-staging reliability of computer networks, significant components of the environment between source systems and the BI platform BI infrastructure can now be outsourced to third parties with a – in this case, the staging environment stores only a core competency in managed services. This new computing short data-history and limited archiving services. model is referred to as utility computing, because BI services are provided similar to electricity and telephone service. BI managed services enable businesses to subscribe to a wide variety Business Intelligence is catching up with the trend towards of applications that are delivered on an as-needed basis, sub- managed services as the preferred way to reduce Total Cost ject to a defined Service Level Agreement. of Ownership (TCO) and management risks. Furthermore, BI managed services provides the organization guaranteed per- Outsourcing offers several advantages over in-house BI: formance by leveraging a third party specializing in management of network and facilities, hardware, data stores, and • Reduced Complexity: By moving the BI deployment to a reliable performance management. third-party provider, the complexity and cost associated with licensing, implementation, management, security, and training are borne by an external organization which Trend #4: The Importance of specializes in these functions. Enterprise-Wide Visibility

• BI for Every Part of the Organization: As a managed serv- The enterprise-wide visibility into operations created by BI is ice, the benefits of BI can be made available to parts of a critical component of operational execution. For example, the organization which may not have previously had the in a competitive marketplace, mergers and acquisitions are budget to support their own BI tools. a quick way to grow revenue and obtain competitive assets – in order to ensure a smooth consolidation, managers use • Capital Allocation Becomes Operational Expense: An on- BI to model the combined organization and maintain a com- demand BI service is a recurring operational expense, plete view of activity while driving the integration of prod- instead of a major capital allocation which can require a ucts, services, employees, systems, and processes. substantial review process and a prominent position on the company’s balance sheet.

9 MBF Group, one of the largest private health insurers in had manual process controls — for instance, all manual Australia, launched Corporate Performance Management payments above a certain amount required approval by the (CPM) initiatives as it was planning to grow through acquisition. CFO. By the first quarter of 2005, both IT and Finance need- The key driver of the CPM initiative was visibility, enabling man- ed to work together to ensure full compliance with SOX. agers at all levels to monitor Key Performance Indicators (KPIs) Employees, working with external auditors, had to manually using dashboards and balanced scorecards. These CPM tools check and certify that all of the company’s internal controls were built from a variety of different sources including finan- were functioning properly. In some cases, the controls had cials, product systems, payroll, and other primary business to be identified, and in others, they had to be developed applications. MBF’s CPM tools give management clear insight and implemented. into the operations of the merged company during and after operational consolidation. At MBF, the CPM initiative is a key • BI to Support Regulatory Reporting enhances trans- element of strategic execution, and the insight gained from the parency and improves oversight of internal controls. CPM tools is used to refine the budgeting and forecasting • BI enables organizations to perform root-cause process for future acquisitions.9 analysis, and quickly highlight process irregularities for correction. • BI for Enterprise-Wide Visibility enables process moni- • BI allows financial managers to investigate the data toring and control in the most complex of business represented in reports, and trace the data to its environments. sources. • Visibility is particularly important during an operational • BI improves corporate credibility by demonstrating evi- consolidation, when duplicate or conflicting processes dence of tight process control. must be resolved before their effects spread throughout the organization. Business Objects' global production control, database BI initiatives such as these produce immediate payoffs in administration, and BI reporting teams worked with auditors terms of organizational visibility – enabling managers to con- to develop a collection of reports with built-in rules for regu- trol with confidence and accuracy a complex business latory compliance. As a result, IT is now able to generate process such as an operational consolidation. The ROI from on-demand evidence of compliance for a number of different BI is maximized when lessons learned are incorporated back functional areas. The compliance-BI project at Business into processes, creating an intelligent enterprise. Objects enabled the organization to achieve the “single source of truth” to meet regulatory requirements, and the Trend #5: Regulatory Compliance Requirements initiative has significantly reduced the time and effort required to produce evidence of full SOX compliance.11 Regulatory requirements for corporate transparency, employee ethics, customer privacy, and quality standards are top con- Trend #6: BI for All Levels of the Organization cerns for senior management - any breach puts the company’s reputation at stake, not to mention the risk of legal or BI enables companies to measure and monitor activity financial liabilities. The demands of regulatory compliance throughout the enterprise to drive fact-based strategic deci- have increased due to a number of mandates—HIPAA, ISO, sions and optimize processes. The potential for BI to FDICIA, and the Sarbanes-Oxley Act of 2002 (SOX). According empower the organization with knowledge aligns well with a to AMR Research, the global spending on compliance initia- corporate philosophy of empowering workers at all levels to tives will reach US$80 billion between 2005 and 2009.10 make effective day-to-day decisions which ultimately benefit the enterprise. Many organizations believe that empowering At BI provider Business Objects, the IT department alone employees with knowledge to support process improvement had nearly 60 general audit controls and almost 90 applica- can dramatically improve overall performance. tion controls; the Finance department also had its own set of controls to comply with. In addition, both departments

10 Empowering users at all levels of the organization with informa- Trend #7: Corporate Performance Management tion to make the right decisions has implications for a company’s corporate culture; it implies a mature, metrics-focused phi- Corporate Performance losophy that responds confidently to changing dynamics and Management (CPM) tools help to prizes information transparency above information control. improve the organization by enabling measurement and moni- Moneris is Canada's leading merchant processing company, toring of all crucial business providing businesses with technologically advanced point-of- processes in a concise and intu- sale solutions which process card-based transactions. itive format. CPM blends BI with tools for visualization to provide real-time activity monitoring and • BI for the Entire Organization enables all employees support for the decision-making to monitor operations, identify problems, and make process. CPM is a fast-growing improvements. segment of the BI market • BI encourages improved decision-making by connecting best practices with feedback from processes. because it helps managers to align enterprise activity with • BI creates an environment of continuously refined strategic objectives. processes by mapping decisions to results, at all levels of the organization. Dashboards and Scorecards are key components of CPM – these are essentially preset analysis displays which provide a succinct view of an organization’s processes, with simple interfaces which show Key Performance Indicators (KPIs) Moneris gained a competitive advantage by creating and alert decision-makers to variances from plan. Merchant Direct, a way for merchants to view their transac- Dashboards are typically designed to display simple per- tion data online. Merchant Direct is a large-scale online formance measures, while Scorecards highlight any devia- reporting application that empowers 300,000-plus mer- tion from pre-set benchmarks. In either case, CPM tools chants to spend more time focusing on their customers and allow the user to drill down to the source data that is driving business trends instead of creating reports of business the KPIs. activity. In addition, Moneris also developed an online reporting application targeted initially to the internal users in the Sales, executive management, and finance functions of the organization. Now, these applications have also helped other areas of the organization to improve their productivity in a short time by delivering real-time information to the extended enterprise.12

Organizations achieve improvement by delivering business knowledge to those who can have a direct impact on key processes. The benefits of improved processes includes increased productivity, customer satisfaction, ROI on technology investments, and reduced costs in Sales, Lowe's Companies, Inc. is a FORTUNE®-50 company with FY’04 Marketing, and Operations. sales of $36.5 billion. The 59-year old company is the sec- ond-largest home improvement retailer in the world, serving approximately 11 million customers a week at more than 1,100 home improvement stores in 48 states.

11 Given the complexity of retail operations and the vast Trend #8: Real-Time Analytics amount of data generated in a large company, Lowe’s faced a challenging task in providing high-value enterprise reporting A competitive business environment demands that organiza- which would empower employees to act on real-time informa- tions must constantly adapt to new market dynamics, cus- tion to increase sales and improve inventory efficiency. tomer requirements, statutory directives, and technology capabilities. Agile organizations are capable of predicting In 2001, Lowe’s adopted scorecard and dashboard initia- opportunities and threats, and responding to changing market tives to anchor all of its BI applications. Today, more than conditions in real-time. The integration of BI into a business’ 2,000 users access ten applications from a 16-terabyte processes produces a feedback loop where the results of data warehouse. Decision-makers from Logistics, analysis become inputs to continuous process refinement- Merchandising, Marketing, Store Operations, Finance, these “Real-Time Analytics” are a durable competitive advan- Human Resources and Distribution manage inventory, tage which create a strong barrier to entry for competitors. improve margin, review market activity, and identify sales opportunities using CPM tools. Lowe’s CPM tools are Kopenhagen Fur (KF) is the world’s largest fur auction house accessed approximately 55,000 times each week through- and the center of international fur trade. KF is cooperatively out the organization, and Lowe’s is realizing significant bene- owned by 2,000 Danish furriers - fur skins are Denmark's fits through improved merchandising decisions, more timely third largest animal export and contribute significantly to the responses to information requests, cost reductions efforts, country's GNP. KF is an internationally-recognized high-value and enhanced employee productivity.13 brand, and its label guarantees the best products in the market. Each year, as many as 15 million furs are sold through auctions at KF. As a trading intermediary, a critical challenge for KF is to create loyalty among both buyers and sellers while continually growing its business. EMEA Sales Latin America Sales KF has invested significant resources into a data warehouse and BI system that provides statistics to buyers and sellers in near-real-time during each auction. Buyers and sellers pay close attention to auction data from the BI system in order to forecast demand and supply for specific skins, col- ors, quality, and the implied pricing – these forecasts help sellers meet anticipated demand, and help buyers prepare for the availability of products their customers may be expecting. Within seconds of an auction’s close, sellers can see a detailed report of auction statistics and start making North America Sales APAC Sales decisions for the next season.14 View of performance from different regions through a Sales Dashboard. • Real-Time Analytics improves process efficiency and effectiveness by integrating analysis into a practice of regular sense-and-response, enabling the continuously CPM tools provide managers with a holistic view of organiza- improving enterprise. tional activity measured by KPIs, giving them clearer insights • Real-Time Analytics coordinates regular processes and into the business and enabling them to make faster, more fact-based decisions in real-time. reliable decisions. • Real-Time Analytics helps the organization to remodel as the needs and behavior of its customer and business environment change.

12 KF’s BI system creates a competitive advantage by offering BuildDirect, founded in 1999, has become the world's lead- valuable market information in the form of immediatefeed- ing online wholesaler and specialty retailer of building prod- back to thousands of customers, and this feedback is used ucts, doing business in 40 countries on six continents with as input to the next auction process – this integration of BI a broad portfolio of products. BuildDirect is an entirely virtu- into the business process itself is an example of Real-Time al organization, and credits much of its success to savvy Analytics (also known as “Active BI”). use of online marketing and advertising.

Agile organizations measure, evaluate, and react to events With a marketing budget that approached $1 million per with a constant loop of information, rules, decisions, and quarter in the first few years of operation and included triggers – all used as inputs to continuous, real-time refine- search engine advertising, email newsletters, and online ment of the business processes. To compete in a dynamic website customer signups, management was eager to environment requires Real-Time Analytics – there is no time improve the efficiency of its online spending. The challenge for surprises, static reports of historic data, or a lengthy was to improve the performance of marketing activities decision process for planning the organization’s next action. through better tracking of which campaigns worked, and which didn't. Trend #9: Multi-Channel Customer Analytics BuildDirect turned to Google Analytics to help analyze which Customers are increasingly using multiple channels to inter- ads were working, and how effective newsletters and site act with companies for research, purchasing, and service. design were in driving sales. By applying the results of The difficulty of aligning multi-channel customer data hinders advanced online analytics, BuildDirect’s sales volume an analysis of each customer’s complete relationship with increased by 50 percent within one year – just by making the organization. The ability to segment, measure, and pro- smarter use of existing marketing techniques.15 file of customer for true Customer Relationship Management (CRM) is made more complex with the addition of the online By combining online marketing with traditional techniques for channel, by adding another class of customer information to segmenting, measuring, and predicting customer behavior, be captured and analyzed. the organization can produce a holistic, 360-degree under- standing of current and potential customers. These activi- The rapid evolution of the online channel has created new ties make target marketing and branding more efficient, pro- types of data (e.g. clickstream data) which have no similar ducing tangible results that become inputs to refine the paradigm in the other channels. New innovations in online next generation of campaigns and revenue forecasts. marketing and purchasing techniques are driving advanced web analytics needed to produce actionable customer insight Trend #10: Offshore Sourcing of BI and Analytics such as customer acquisition cost, cost per conversion, customer churn rate, and retention. When Web data are com- Offshore sourcing is the seamless integration of onsite, bined with predictive analytics such as data mining and text onshore, near-shore, and offshore delivery teams. It is rap- mining, powerful customer insights become available. idly becoming the preferred model for fulfillment of business processes within many organizations due to the cost sav- • Multi-Channel Customer Analytics allows the collec- ings available, skilled resources available throughout the tion, measurement, and analysis of the complete cus- world, and the prevalence of highly-developed offshore serv- tomer relationship with the organization. ice providers. • High-value customer intelligence drives incremental revenue, decreased customer attrition, and increased rates of customer acquisition. Like any refined business discipline, Business Intelligence (including Business Analytics) is a good candidate for global sourcing. For example, call centers require intricate models for routing calls, demand and supply forecasting to predict

13 the number of support staff required, and precisely measur- Through the use of global sourcing; Thames achieved sav- ing cost-to-serve – if a call center is sourced offshore, the ings of hundreds of thousands of pounds on a project which supporting analytics may also be sourced offshore. cost 1.2M to implement.17

The choice to source BI and analytics from offshore Developing customer analytics offshore offers substantial providers is attractive in part due to savings in operating cost savings. There are well-publicized shortages of skills costs, but other factors also drive the decision to source around statistics, operations research, and mathematics in offshore. These factors include: many countries.

• BI, Analytics, and Data Warehousing are mature disci- When sourced on a global scale, skills such as data model- plines, with well-defined models for reporting and analysis, ing, applied statistics, and report design are readily avail- and easily-understandable requirements for presentation able at lower cost, making this a suitable solution for build- types and data granularity. ing custom analytics for complex business problems such • Because of advancements in business process modeling, as pricing optimization, merchandize planning, and supply documentation, and measurement, this knowledge can be chain modeling. retained and transferred to offshore delivery teams in order to facilitate collaboration with internal teams.

• Well-developed processes for project communication, documentation, and control are now available to project lead- ers in most industries, for complex BI needs.

• A Global Delivery Model gives companies access to a selection of the best talent available, including specialized skills like applied statistics and analytics development.

• Global Delivery Centers drive business optimization through leading technical capabilities and process expertise, while keeping operating costs to a minimum. • Lower operating cost and increased ROI is a competitive advantage. • A Global Delivery Model gives companies access to the best talent available, amidst skills shortages at home.

Thames Water Utilities Company is a large UK water services company with 12 million customers. Thames adopted an offshore / onsite model to implement a management decision support system, using an Indian IT services vendor. The offshore vendor reengineered the existing Thames data mart to extract cost-related data from 14 different sources auto- matically, and centralized business rules to avoid any inter- pretation errors. The vendor also enabled historical data storage and analysis, updated legacy BI systems to ensure compatibility with a new data model, and provided additional reports that were required.16

14 Conclusion

High quality data assets are critical for BI to enable reliable and repeatable decision making. Along with high-quality data, companies need to have a “single source of truth” which is shared across the organization by a standardized enterprise BI platform. To be an agile business, all levels of the organization must access and act on real time information. High-value BI which meets the needs of all data consumers in the organization requires a combination of high- quality data, a single and shared version of business knowledge, and information which is current and available in real time. Additionally, the integration of BI into business processes recognizes BI as a key competitive asset and enabler of peak organizational performance.

Regulatory compliance, constrained IT budgets, and a need to optimize every process that the business manages makes high-value BI more critical today than ever before. The development of BI as a refined discipline over the past ten years gives organizations reassurance as they invest in fixing old data problems, and deploying new BI technologies, in order to move to the next level of enterprise BI applications and become an agile business.

15 About Unisys

Unisys is a worldwide technology services and solutions company. Our consultants apply Unisys expertise in consulting, systems integration, outsourcing, infrastructure, and serv- er technology to help our clients achieve secure business operations. We build more secure organizations by creating visibility into clients’ business operations. Leveraging Unisys 3D Visible Enterprise, we make visible the impact of their decisions – ahead of investments, opportunities and risks.

Unisys BI Services

3D-VE BI Workshops (Introduction to BI Best Practices, Trends) BI Assessments (BI strategy and roadmaps, infrastructure evaluation) Strategic Services Outsourcing and managed services planning Data Management Strategy Proof of Concepts

BI Platform assessment and devolopment Data scalability and data warehouse development Infrastructure Services Performance and tuning advisory, IT optimization analysis Application of best practices related to data quality, security, and organization

BI Platform Upgrades / Migration (Migrate-to-Save) Consulting Services Platform Standardization (Standardize-to-Save) Infrastructure Consolidation (Consolidate-to-Save) Project Management

Managed Services Off-site or On-site BI Platform Management Hosting Proprietary R&D Analytics Applications

3Scale-up and Scale-out Architecture Solutions HighPerformance Hardware 64-Bit high-performance Itanium servers Business continuity and disaster recovery solutions

16 Sources 12 Moneris Solutions and Information Builders Provide Canada's First Internet-Based Merchant Reporting Service, 1 Gartner EXP 2006 CIO Survey / BI Conference March 2006 Information Builders, Inc. 2 Global Data Management Survey 2004, http://www.informationbuilders.com/press/04_30_02_mon PriceWaterhouseCoopers 2004 .html http://wp.bitpipe.com/resource/org_963583532_48/data_ 13 Success Story: Lowe’s Companies, Inc. - Delivering quality_wp_In_Network.pdf?site_cd=bw Information From a 16-Terabyte Enterprise Data 3 DaimlerChrysler: A Case Study in Enterprise Data Quality Warehouse, MicroStrategy, Inc Success, Group 1 Software http://www.microstrategy.com/Customers/Successes/detail http://www.g1.com/Products/DataQuality/DaimlerChrysler .asp?ID=78

4 Standardizing On A Single BI Reporting And Analysis 14 Kopenhagen Fur reports 'the skinny' on every auction - Platform : Possible? Yes. Practical? No, Forrester Research Leading fur auction house uses SAS for real-time report- October 25, 2005 ing, SAS Institute, Inc. http://www.forrester.com/Research/Document/Excerpt/0,7 http://www.sas.com/success/kopenhagenfur.html 211,38115,00.html 15 BuildDirect increased sales 50 percent using Google 5 Packaged BI Applications: Friend or Foe, Gartner, Nigel Analytics, Google, Inc. Rayner, May 2001 http://www.google.com/analytics/case_study_builddirect.html

6 The Financial Impact of Business Analytics, International 16 Using offshore/onsite model to help in management deci- Data Corporation 2002 sion making for a large water utilities company, Wipro, Ltd. http://www.wipro.com/customers/itservices/services/busine 7 Packaged BI Applications: Friend or Foe, Gartner, Nigel s_intl/cs_businessintl_14.htm Rayner, May 2001 17 Water, water, everywhere, James Thompson, The Sydney 8 France Telecom Business Intelligence in Action: A Morning Herald, September 16, 2005 Business Objects Success Story, Business Objects http://www.businessobjects.com/pdf/success/France_Telec om.pdf

9 The Birth of Business Intelligence, David A. Kelly, Oracle Corporation http://www.oracle.com/oramag/profit/05-feb/p15cpm.html

10 Intelligent Compliance, PROFIT, Molly Rose Teuke, November 2005 http://www.oracle.com/oramag/profit/05-nov/p45compli- ance.html

11 Business Objects Achieves SOX Compliance with Its Own Business Intelligence Tools, Business Objects http://www.businessobjects.com/company/customers/spot- light/bobj_sox.asp

Contacts in the Unisys BI Solutions, Practice, Sales and Alliances team:

BI Global Solutions Management Ravi Kalakota (770-368-6303) [email protected]

BI Practice Management Team Kim Ramko (615) 356-9513) [email protected]

BI Sales Bob Williams (610) 407-4177) [email protected] Bill Lawlor (630) 582-2661) [email protected] Greg Fagen (585) 487-2459 [email protected] John Malach (585) 487-2574 [email protected]

BI Global Alliances Shawn McPherron (801) 947-5775 [email protected]

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