Business Intelligence Playbook

CMP
The Enterprise Edge

Playbook
A CMP Guide to Introduction
Business Intelligence BI Grows Up

Alan Joch, CMP Technology
A Compendium
Feature Articles of Recent Articles by CMP Editors
Optimize Intelligent Enterprise
Finally, Intelligent Businesses Operational Intelligence

Neil Raden . . . . . . . . . . . . . . . . . . . . . .4 Enters the Spotlight
Dan Everett . . . . . . . . . . . . . . . . . . . .26
Turning Data Chaos
Into Business Gold BI Is More Than a Dashboard
Andrew Fano . . . . . . . . . . . . . . . . . . . .9 Dan Everett . . . . . . . . . . . . . . . . . . . .28
Smarter Use Of Business

Intelligence TechWeb Technology News
Betsy Burton and Mark McDonald . . .15
Oracle Delivers Compliance,
Risk, Reporting Tool
Bank Systems & Technology Laurie Sullivan . . . . . . . . . . . . . . . . . .30
The Next Level in Business Oracle Plunges Into BI
Intelligence Laurie Sullivan . . . . . . . . . . . . . . . . . .31
Nancy Feig . . . . . . . . . . . . . . . . . . . . .19
From the editors of:

Insurance & Technology
Executive Insight: Enterprise

Data Warehousing Renaissance
Alfred Goxhaj . . . . . . . . . . . . . . . . . . .23
Sponsored by:
BACK TO HOME
BI Grows Up
A new generation of pervasive business intelligence points the way to more efficient businesses
Savvy companies hungry for a competitive edge know that business intelligence isn’t just for data-analysis
experts anymore.
Today’s BI systems, known variously as “BI 2.0” and “Pervasive BI,” no longer focus only on summaries
of historical data. They combine timely information gathered from the breadth of systems across an
enterprise to inform daily decision-making. Some BI 2.0 implementations also embed reporting tools
and monitors into select enterprise applications to suggest on-the-fly responses to new opportunities
and challenges as they arise.
But the roadmap to pervasive BI is still being charted and technical potholes remain for the unwary.
That’s why we’ve compiled this series of watershed stories about the latest generation of BI from CMP’s
From the family of business technology publications. Read these articles to learn about the technologies, trends,
editors of:
and best practices that can help your company launch and profit from BI 2.0.
For example, Optimize Magazine documents the changing landscape of BI and real-time analytics in the
must-read story “Finally, Intelligent Businesses.” Contending that BI as we know it will change dramati-
cally over the next five years, this article lays out the reasons why innovative enterprises are embedding
analytics into operational processes to gain competitive advantage. “The need to take action, not just
be informed, is more urgent than ever,” says author Neil Raden. A range of converging business forces
“all are pushing BI in a new and exciting direction,” he adds.
For further proof that leading companies need to find new ways to understand and use information,
read “Turning Data Chaos into Business Gold,” also from Optimize Magazine. The story explains how
enterprises can glean better intelligence from their available data and then turn those analyses into
actions for forging closer relationships with customers, suppliers, and employees.
Optimize Magazine rounds out its BI series with “Smarter Use Of Business Intelligence,” which examines
why CIOs have made BI one of their top investment priorities. One catalyst: as BI applications become
easier to use they become available to a wider range of workers and business processes than ever
before. The future of BI lies in its methods, practices, and technologies becoming completely integrated
into our everyday work, the authors argue. They add that IT executives must develop business tools that
absorb and analyze an explosion of information from partners and customers. Based on current spend-
ing patterns, that future has already arrived at many enterprises.
Nancy Feig explores how large enterprises are rethinking their BI strategies in the quest to make better
and more-profitable business decisions in “The Next Level in Business Intelligence,” from Bank Systems
& Technology. While the goals of BI always have been to improve the value of customer relationships
and bottom lines, increasingly competitive business environments are forcing organizations to develop a
new philosophy centered around the enterprise-wide use of BI tools, Feig explains.
2 THE ENTERPRISE EDGE PLAYBOOK continues >>

BACK TO HOME
“Executive Insight: Enterprise Data Warehousing Renaissance” follows the evolution of enterprise data
warehousing from its essentially theoretical roots a decade ago into what’s becoming a mainstream
architecture today. This Insurance & Technology story explains how sophisticated BI tools and strategies
now are making it possible for companies to launch enterprise-scale data repositories and see data-
warehousing success in much shorter time periods than in years past.
“Operational intelligence” isn’t just one of the IT industry’s latest and greatest buzzwords, as Ventana
Research found out went it investigated the changes that are reshaping BI. Intelligent Enterprise presents
Ventana’s findings in “Operational Intelligence Enters the Spotlight.” The story explains how rapidly
evolving event-driven architectures are spawning intelligence systems that monitor the current status of
business processes and activities and merges intelligence with process workflows. The result: companies
become more competitive by acting quickly to address new opportunities and challenges.
Dashboards and BI may be two concepts closely linked in the minds of many business managers. But
dashboard success requires more than a one-size-fits-all approach, argues Dan Everett in “BI Is More
Than a Dashboard,” from Intelligent Enterprise. To assure that end users take advantage of dashboards,
IT managers need to consider the roles and technical skills of the target audience. See how correctly
designed dashboards can be a key ingredient to BI implementations that deliver real business value.
To understand how BI is becoming a vital tool for day-to-day decision making, read “Oracle Delivers
Compliance, Risk, Reporting Tool” in TechWeb Technology News. Laurie Sullivan describes how Oracle
embedded analytics into enterprise applications to give companies enhanced compliance management
reporting capabilities.
Finally, in “Oracle Plunges Into BI” TechWeb Technology News reports on Oracle’s push earlier this year
into the burgeoning BI sector with its Oracle Business Intelligence Suite. The introduction is part of a
larger trend, the story explains. “During the past five years companies have moved from wanting to col-
lect the data, to gaining insight from the data,” says a researcher quoted in the story. As a result, the BI
software and services market could rise 10 percent to $6 billion this year.
Few technologies are evolving as quickly as today’s BI. These stories will quickly get you up to speed.
Alan Joch
Editor in Chief
The Enterprise Edge
3 THE ENTERPRISE EDGE PLAYBOOK

BACK TO HOME Optimize, October 2006
Finally, Intelligent Businesses

Can search, semantics, and master data management
take analytics to the next level?
By Neil Raden and data-manipulation processes beyond the

skills or patience of most knowledge workers.
Business intelligence as we know it will Consequently, the level of IT involvement in BI
change dramatically over the next five years. remains high, leading to reduced ROI and an
Organizations are moving beyond purely oper- overall lack of agility and timeliness except for
ational systems and toward embedding analyt- those few power users who invest the time
ics into operational processes. The need to and effort to develop proficiency. However,
take action, not just be informed, is more vendors are working to render the technology
urgent than ever due to the relentless external- more helpful to business users, including CIOs
ization of business, the rapid emergence of and other corporate executives who make the
loosely coupled computing environments purchasing and implementation decisions.
based on standards, and the Web-as-the-plat-
form paradigm. All are pushing BI in a new One factor that will alter BI’s future is the tech-
and exciting direction. nology’s burgeoning new capabilities. These
fall into the following categories:
Typically, BI has been a disconnected activity,
with users unable to traverse the big gap • Guided search and navigation. One prob-
between being informed and being able to do lem with current BI tools is that they assume
anything about it. Stacks of BI functionality— that users know what they’re looking for and
including reporting, ad hoc analysis, and understand the meaning of the terms and deri-
online analytical processing (OLAP)—serve vation of values and relationships, explicit and
only a small fraction of users. As measured by implicit, among all elements. BI’s low accept-
licenses, just 10% to 20% of users have ance rate shows the flaw in this assumption.
access to analytics, according to most stud- Relatively feeble attempts at informing users
ies, though actual use is probably even lower. through metadata are barely definitional.
Cognitive studies show that people will pursue
Although BI tools generally require no pro- multistep navigation only if they’re reasonably
gramming and the basics can be taught in a certain they’ll find what they want. For a BI
couple of days, BI still demands a level of tool to get and keep someone’s interest, it has
understanding about the data, data models, to reorient the data without using hierarchies

and taxonomies outside the user’s frame of mation exchange that Tim Berners-Lee and
reference. the World Wide Web Consortium (W3C) envi-
sion is still far off, but technology created in its
Applying search technology to the interactive pursuit is showing promise. Not only do
BI experience offers a long-overdue improve- ontologies provide richer and more flexible
ment. It also promises to link indexed, unstruc- ways to represent definitions, meanings, and
tured text, though real apps are a year or two relationships; they also let computers draw
away. BI vendors such as Cognos and SAS are inferences. Asserting things in an ontology lets
responding to customer interest in search and you create a vast new resource of implicit
navigation by inking partnerships with Google, information that has its own discoverable pat-
Inxight Software, and other search and terns and relationships.
unstructured content-analysis vendors.
Not everyone is sold on ontologies, however.
One enterprise customer, law firm Morrison & Pessimists argue that syllogisms are applica-
Foerster LLP, has turned to Recommind’s ble only to a very small part of our lives. And
MindServer tools to go beyond keyword while semantic technology is used in the intel-
search and use concepts to gather information ligence and military communities to do things
from assorted sources, including documents, like unify databases across law-enforcement
databases, Web pages, and E-mail. The objec- and intelligence agencies, it has yet to gain
tive is to feed information to the firm’s more significant traction in commercial enterprises.
than 1,000 attorneys across 19 offices world- Recently, Google, Yahoo, and others have pur-
wide regarding external developments that sued semantic Web technology, which
affect clients and ongoing cases. becomes part of what commercial enterprises
use to discover and interpret search results.
• Master data management. MDM helps
companies share reference data among con- Semantic technology is also finding its way
stituencies, including business functions and into data integration, search, and navigation,
external partners. Although several application providing the basis for “supercharged” meta-
and information-management domains are try- data efforts. For example, IBM, which acquired
ing to “own” MDM, the discipline is emerging Unicorn Solutions in May, is applying
as something separate—and taking a big bite advanced metadata management to service-
out of that traditional mega-enabler of BI, the oriented architecture (SOA) Web-service gov-
data warehouse. ernance and management, among other busi-
ness-integration challenges.
Creating a single repository of integrated
data—the so-called single version of the Business problems might also prompt user
truth—is a core data-warehousing promise. organizations to adopt semantics. For
However, a single, common set of master data instance, most organizations exist as tightly
is too important to an organization to bury in bound groups, communicating in languages
the murky processes of a data warehouse. that only internal participants can readily
Data definitions mediated by those who partic- understand. But as businesses outsource, off-
ipate in the data-warehouse design don’t nec- shore, and otherwise externalize processes,
essarily serve the enterprise view, which is fluid communication with outside partners
more operational than analytical. becomes essential.
• Semantics. Because the data warehouse Realistically, individual groups or functions are
can play only a limited role in delivering MDM rarely willing to exhaustively delineate all the
capabilities, semantic technology becomes rel- elements and combinations required for trans-
evant. The semantic Web of frictionless infor- lation and better understanding. But semantic

models—especially those based on first-order technology, vendor Celequest has found a way
logic, as ontology is—let structure emerge for BI to participate in an SOA cooperatively.
over time and machines to draw inferences
without requiring human participants to code Operational BI must be as lightweight and
each relationship explicitly. configurable as services. Grabbing a piece of
historical data from a data warehouse, aligning
• Operational BI. Operational BI—or more it with current information from an operational
accurately, operational analytics—offers a process, and perhaps dynamically generating
classic example of a boundary object: some- a forecast based on trend analysis must all
thing identified by different domains, and happen transparently and in near-real time.
therefore given very different meanings. Although many operational-analytical hybrids
Classic data warehousing and BI attempted to can operate in a more relaxed time frame, the
meet some operational reporting requirements demand for analytical services will drive the
with the addition of the operational data store. development of fast, thin applets.
ODS has tried to integrate atomic-level data,
generally for later aggregation or summariza- A second factor shaping BI’s future is the evo-
tion by data warehouses, OLAP, and BI tools. lution of technology architecture. SOA, Web
services, W3C standards, and AJAX all came
Unfortunately, the challenges of developing an to us through the exploding use of the
ODS to meet the low- to zero-latency Internet. Other Web 2.0 technologies of inter-
demands of hybrid operational-analytical est are standards and tools for collaboration,
applications have mostly proved beyond the such as RSS feeds and social networking—
capabilities of existing data-warehouse infra- both of which are based on semantic Web
structure and mainstream BI tools. To meld technology. And blogging is becoming a
operations and analytics, tools would have to respectable way to share and vet analysis.
step up to the service levels of operational
software—impossible with prevailing best Management woes
practices. And an ODS’ ability to fully integrate
with data warehouses remains questionable. The Web 2.0 era is also spreading Google-like
software licensing and distribution, featuring
Among database vendors, Teradata seems fur- versionless upgrades. Even in a straightforward
thest along in providing what it calls an Active BI environment, managers face a dozen or more
Data Warehouse. In this scenario, the ware- pieces of software, all on different upgrade
house supports tactical decision making, with schedules. This leads to excessive downtime
performance levels and data refreshes and wasted effort, not to mention cost.
approaching those of transactional systems.
However, most existing BI environments pro- Polling databases is another consuming BI
vide weak support for the kind of real-time effort. However, systems are beginning to
query federation between a data warehouse incorporate unattended agents that know what
and other operational data sources that’s nec- to look for and the most efficient way to find it.
essary to make operational-analytical hybrids Tibco Software, webMethods, and a few other
serve business processes. vendors offer agents that can choose the right
means of communicating analysis results and
One alternative is to be selective about the information automatically. As SOA and Web
data elements you involve, using real-time services mature, it will be simple to devise and
agents either to gather the data as it flows deploy bots to poll and search for you.
through a message queue or to read the appli-
cations’ logs for changed data. By providing In addition to new capabilities and evolving
these and other capabilities as part of its core architecture, three external factors will drive BI

into new modes of usefulness. The open- division of analytical from operational systems,
source movement is one, although it remains which was artificial in the first place, has
to be seen whether open source’s impact will proved inefficient for managers and opera-
be simply to drive down software costs or to tional employees to use analysis for decisions
start something bigger. Everyone knows about and action.
Linux, but BI software doesn’t have a similarly
vast number of interested parties behind it. On Embedded analytics, composite applications,
the other hand, the pressure might be a good and operational BI all lead us to further co-
influence on BI vendors, which might other- processing of operational and analytical data
wise feel they can get away with mediocre and formulas. Since SOA will increasingly be
software at exorbitant prices. the foundation of applications, companies will
prefer to distribute and deploy analytical
Another outside factor seems more influential: applets as needed. Monolithic BI suites with
the continued externalization of business. expensive per-seat licenses will lose favor—as
Today, all organizations must transact business will BI and data warehousing stacks cobbled
with partners and customers electronically. together from different generations of technol-
Historically, a single large customer such as ogy. Market advantage will go to newer, less-
Wal-Mart, or a manufacturer such as Procter & comprehensive entrants. Even older applica-
Gamble, could dictate the format of business- tions that provide specific functionality—such
to-business electronic interchange. Participants as visualization, Monte Carlo simulation or
had to make a big investment in proprietary other stochastic processes, and industry-spe-
technology, including mainframe systems and cific analytics—will get a leg up.
EDI. Those that didn’t were locked out.
BI needs to do a better job of connecting with
With open standards solidifying and technology the new user experience. Data exploration
lowering the cost barriers to almost zero, nearly without guided search and more useful
anyone can participate in E-commerce. The abstraction from physical data representation
stumbling block is getting all parties to effective- won’t capture attention. And those layered
ly communicate and share information in real architectures that look so good on PowerPoint
time. Leading organizations must push beyond slides won’t cut it in a future dominated by
conventional BI and data-warehousing flatter architectures characterized by SOA.
approaches and seek adaptable, agile solutions. Rather than a typical data architecture that
looks like a layer cake and has all sorts of
Finally, the time has come to radically rethink arrows with no explanation, advanced organi-
BI’s basic methodologies. Caching, virtual zations will embrace the cooperative, peer
data warehousing, query federation, relationship inherent among services.
autonomous agents, and real-time and direct
access to operational data stores are all more Analysis is a collaborative, not a singular
feasible now and must be built into the new effort. If BI is to permeate the enterprise, it
BI. Doing so will help companies alleviate the must thrive within the network of business
delays and rigidity that confound current processes. In the not-too-distant future, the
approaches. best BI may be that which you don’t even see.
Interdisciplinary approach Neil Raden is founder and president of con-

sulting firm Hired Brains. This article first
With analytics submerging into ERP, CRM, HR appeared in the September 2006 issue of
management, and other applications, we can Intelligent Enterprise.
no longer view BI as a separate discipline. The

Online-Only Sidebar: merger, we want to push you video training or

The Legal Practice Of BI other materials. If a tax partner in the San
Francisco office does a search and two identi-
David Stodder, editorial director of CMP’s cal documents come up, we want to make
Intelligent Enterprise, spoke recently with Oz sure they know which one is more relevant.
Benamram, practice-resources attorney at For BI and text search to work together, you
Morrison & Foerster LLP, regarding the law have to have the “I” [stand for] intelligence.
firm’s use of business intelligence. Dumb systems don’t understand that informa-
tion demands change as the process and
Q: You’re in charge of firmwide knowledge decision-making situations change. We use
management. What’s at the top of your agen- Recommind MindServer [enterprise search and
da? machine learning] to basically do what the E-
commerce guys do so well.
A: Our goal is to support actions. Ten years
ago, we didn’t have enough information. Now Q: How are you improving processes at
we have too much, but most of our systems Morrison & Foerster?
were built to solve last decade’s problem. Our
job is not simply to be a librarian and make A: Rather than tag each document, we let
information available online. We have to learn MindServer tag them for us. Even if it’s not
from retailers, which are measured by demand. 100% accurate, the software is faster and
We have to understand what the mission-criti- more consistent than a human. We then have
cal actions are in our organization and support one person tag the project, doing what the
those. software cannot do. And we have automated
agents reading court filings and matching
Q: How do you apply knowledge about users information with billing and other systems so
when assembling information? the proper people are notified when a client is
involved in a legal action. This helps us short-
A: We try to understand who you are and what en processes dramatically and assemble the
you want. If we know that you’re a second- right team to address our client’s needs with-
year associate and you’re working on your first out wasting time.

BACK TO HOME Optimize, September 2006
Turning Data Chaos Into

Business Gold
By Andrew Fano creation. Mash-ups—combinations of online
data sources and presentation methods—
How can we derive better intelligence from provide a growing palette of highly specific tools.
data and what should we be doing differently Additionally, an increasing number of social-
with that intelligence? The quest for answers networking sites and collaboration tools work
to these age-old questions is gaining new across organizational and enterprise boundaries—
urgency—and presenting more opportunities often surpassing the collaboration support that
for CIOs than ever before. occurs within the enterprise.
The potential exists to derive actionable intelli- A central theme running through these changes
gence about customers, the supply chain, is the prevalence of bottom-up, distributed
employees, facilities, and competitors, to name a approaches that are often anathema to the
few. This promise isn’t due to any fundamental enterprise. Inside the enterprise, we tend to rely
changes in the technical capabilities of data on a small number of centralized, CIO-approved
warehouses, but may be attributed to the way applications for internal data intended to be
we interact with content—and the changing most things to most people. However, that’s all
nature of content itself. changing with the gradual adoption of bottom-up,
decentralized methods within the enterprise—
Inside the enterprise, changes to the way we one of the hallmarks of Enterprise 2.0.
use content and data have been slow in coming.
Portals, enterprise search, and business- Changing content
intelligence tools are among the primary means
of accessing information, and changes are Content itself has changed even more than the
incremental. Outside the enterprise, however, ways we’ve used it. Over the past 15 years
change is far more dramatic. The range of we’ve accumulated massive amounts of data in
technologies and practices in this sphere, often four key areas. The challenge going forward is to
referred to as Web 2.0, is characteristic of develop intelligent business applications that
many of these developments. These rapid-fire scale accordingly.
changes impact how we create, adapt, distrib-
ute, and consume content. First, the widespread deployment of ERP systems
has resulted in the systematic accumulation of
The phenomenon of blogs and wikis is the business process data.
most notable development in distributed content

Second, there’s been dramatic growth in data porating insights derived from these sources of
about people. Businesses have increasingly data. We’ve encountered four key challenges:
captured the activities of consumers, patients, using data in real time, working with probabilistic
employees, and students, allowing companies to data, exploiting unstructured content, and
change the way they make products, deliver achieving semantic integration.
services, and maintain relationships.
Regarding the first challenge, businesses have
Third, sensor data is increasingly available. The traditionally gathered data about the past to help
broad proliferation of sensors—including cam- them decide what to do in the future. But it’s
eras, RFID tags, microphones, accelerometers, now becoming increasingly possible for busi-
and GPS—is making the physical world directly nesses to act in real time. For example, mobile
visible to computers. The widespread use of devices mounted to shopping carts give the
cheap sensors and wireless communications retailer a channel to its customers as they stroll
makes it possible to collect data from remote the store aisles. But just how to use this new
environments extending well beyond factories— capability is still being decided. If a business can
including homes, battlefields, forests, and even whisper in the ear of a customer at any time,
vineyards—often in real time. what should it say, and when?
From loyalty-card data accumulated over the

years, we have built thousands of models of
individual customers. But instead of using these
models to continuously bombard the shopper
with promotions, we’ve identified specific times
during the visit when it makes sense to interact
with the customer—sometimes with carefully
selected promotions, other times with shopping
lists and other tools that enhance the task. The
goal is an intelligent interaction that results in a
pleasant and valued experience for the customer.
As for probabilistic data, we know that traditional

business applications rely on clean data—that is,
data from which all “noise,” or error, is removed.
But as more applications draw information from
sensors, dirty data becomes less of an issue
than probabilistic data whose significance is
uncertain.
Our Sensor Fusion project illustrates this prob-

Finally, and perhaps most easy to overlook, is lem. The goal of the project is to monitor the
the mind-boggling growth in unstructured data locations of lab members as they work on the
such as text and video, as reflected most imme- 36th floor of the building that houses our
diately on the Web (see “Did You Know,” right). Chicago facilities. Input to the system is provid-
Despite this disproportionate growth, businesses ed by a variety of sensors, including 50 cameras,
have paid comparatively little attention to gaining an infrared badge system, and a check-in kiosk
business value from unstructured content. that employees use as they arrive at work. None
of these sensors is perfectly accurate.
At Accenture Technology Labs, our research is
aimed at improving business processes by incor- We used to focus on improving either the quality

of the sensors or our interpretation of the data. descriptions on the Web. The methodology
Currently, our emphasis is on the fusion of this includes natural-language processing techniques
type of imperfect sensor data to provide an over- and an active-learning feedback loop that inter-
all account of what’s going on. The result is not a actively refines the inferred hypotheses in a man-
definitive account of where everyone is, but ner that optimizes the use of human attention.
rather a probability distribution of everyone’s
location. For example, the system might indicate One way to make good use of unstructured con-
there’s a 50% chance that an individual is in tent is to use it to augment traditional structured
Conference Room A, a 20% chance that he’s in data. For example, consider a retailer that has
his office, and a 10% chance that he’s in years’ worth of transaction data. In principle, it
Conference Room B. should be possible to go back and look at cus-
tomers and understand their tastes and buying
While we can and should reduce uncertainty, we habits. Yet when you actually examine the data,
can never totally eliminate it. Our goal is to build it often includes little more than the SKU, date of
applications that recognize and gracefully purchase, and price.
accommodate it.
If you’re lucky, the data will tell you that the item
The third challenge involves deriving value from is women’s wear—maybe even that it’s a shirt.
unstructured content. Not only is unstructured So what does that tell you about the customer?
content growing faster than traditional data, At best, that he or she likes women’s SKUs.
most of it is external to the organization, yet still More of this type of data won’t help. What’s
of potential value. For example, the number of missing isn’t more data, but richer data. In this
blogs doubles every five months. Furthermore, case, to learn more about the customer or the
the kind of unstructured content fueled into store, we need to know more about the product:
organizations is changing. (For a related view- Is it trendy? Conservative? Sporty? We’re unlike-
point on the explosion of data, see Thomas ly to find a database with this information.
Davenport’s article, E2.0? Marginal At Best.)
However, one place where this information
In another example, 8 million Sprint customers implicitly exists is in the marketing associated
swapped 300 million pictures. While it can seem with each product. Descriptions about fabric and
overwhelming, businesses have the opportunity style may tell us valuable things about a cus-
to glean valuable insights from this content—by tomer who would purchase such a shirt, a retail-
analyzing opinions expressed online, gathering er who would sell it, or a brand that would pro-
information about products and services in the duce it.
marketplace, or reviewing pictures and video
depicting a problem with a product encountered With this in mind, we built Product Profiler, a sys-
by a user. To do so, however, businesses need tem that—given such natural-language product
methods of monitoring, aggregating, and analyz- descriptions—uses machine learning to recog-
ing this content. nize attributes such as trendiness and sporti-
ness. It’s effective at augmenting impoverished
Automated approaches won’t be able to “under- databases and can be used to support a number
stand” unstructured content to the same depth of the applications mentioned above. This and
as humans. More modest goals, such as identi- similar approaches are behind a variety of appli-
fying key themes in a document or reconciling cations, including assortment planning, brand
conflicting descriptions of an object, can still be management, and catalog mapping.
useful. With this in mind, we’re developing tools
and algorithms for extracting product attributes For the CIO, such methods pose a series of
and values—such as size, material, and other challenges for data quality and data governance.
specifications—from unstructured product In a 2005 Accenture study of more than 100

CIOs at global organizations, 77% said having a the fourth challenge we increasingly face. For
clearly defined approach to data quality was very example, enterprise business-intelligence tools
important. Correctness, clarity, and complete- generally focus on using data that’s flowing
ness are critical. Yet each of these concepts through corporate systems to provide decision-
needs to be reconsidered in light of the chal- makers with near-real-time visibility into their
lenges and applications ahead. company’s internal operations. This can be a
great improvement over what we’ve seen in the
When we’re working with probability distribu- past, when a comprehensive picture of the oper-
tions, for example, it’s understood that actual ation might have been days or weeks out of date
values may vary. Correctness becomes more a by the time it was compiled.
question of verifying not that the data values are
correct, but that the distributions governing the However, as they now exist, these business-
possible values are correct—a much harder intelligence systems lack awareness of what’s
proposition. How should we consider complete- going in the broader competitive ecosystem out-
ness when we’re extracting concepts from side the enterprise. Although a great deal of
unstructured content? Did we extract every con- information about things that customers, part-
cept we should have? Is a given extracted con- ners, suppliers, and competitors are doing is
cept really an appropriate instance, given the now available on the Internet, the information is
context? In many cases, metrics used in infor- typically unstructured; enterprises lack the tools
mation retrieval—such as recall and precision— to process these information sources and relate
may be more appropriate. the information to automate their operations.
In the case of data governance, consider some Business Event Advisor, a tool we’re developing
of the challenges for probabilistic databases. in our labs, will model the competitive relation-
What will constitute new evidence that can ships that impinge on a company’s operations,
impact a probability? Will the methods used to then use the new model to process various
update a belief be subject to governance? What sources of information. By applying a combina-
will the policies be when the probability associat- tion of text processing and automatic inference,
ed with a belief is updated? In Accenture’s CIO the system will detect business-relevant events
survey, 64% of respondents said defining clear and infer their potential implications for a partic-
date ownership is very important. Yet many of ular customer. In this way, the system will help
the applications we consider involve examining knowledge workers monitor the external environ-
large numbers of external data sources and ment in which they operate, spotting potential
combining them in novel ways. What will be the threats and opportunities as early as possible.
status of information derived from these By scanning, filtering, categorizing, and analyz-
sources? Will we have to apply data-quality ing, the tool will translate unstructured Web
standards to each and every outside source? information into a stream of structured descrip-
tions of both reported and inferred events that
These questions aren’t showstoppers. And there can be used to trigger alerts, populate decision-
are approaches evolving for many of these support portals, and integrate with the enterprise
issues. They simply suggest that the kinds of BI system.
systems we’ll start seeing will require approach-
es to data governance and quality that differ So when a competitor’s supplier drops a product
from what we’ve traditionally relied on. line, or when a manufacturer of complementary
products changes prices, the tool will scan many
Making sense of information sources of relevant external data, integrate the
findings, and report back on the possible conse-
Semantic integration—the ability to make sense quences of the news. By mining for gems in the
of information represented in different ways—is mountain of external data, companies will be

poised to make faster and better decisions than SIDEBAR

their competitors. Gartner Puts ‘Tech 2.0’ in Perspective
The goal of the CIO shouldn’t be simply to Web 2.0 isn’t just a set of technologies, but also
extract information from new data sources, but a group of attributes that have a social dimen-
to explore the new applications that will put this sion: new business models, user-contributed
information to use. We believe that the enterprise content and metadata, more open and transpar-
will increasingly have visibility into the physical ent business processes, simple design and fea-
world through a growing proliferation of sensors, tures, and decentralized and participatory prod-
as well as into the mind-set of the marketplace ucts and processes. Although Tim O’Reilly has
through access to unstructured content. These evangelized Web 2.0 and explained many of its
applications will let enterprises inform decisions concepts well, it remains confusing to most. In
and actions that occur in increasingly real-time many ways, it’s a term describing the second
situations, with approaches that scale to the generation of the Internet, reflective of the Web’s
sources available. current capabilities. Gartner identifies three key
anchor points:
Nonetheless, the intrinsically imprecise nature of
this data, the highly distributed sources of infor- • Technology and architecture. This encom-
mation, and the growing use of external tools passes the architecture and the concept of
that blur the boundaries of the enterprise will Web platforms. Specific technologies include
challenge existing notions of data quality and AJAX, REST, and RSS. Technologists gravitate
governance. Rethinking approaches to these toward this view.
questions are central. Ultimately, the progression
toward Enterprise 2.0 will be characterized by • Community and social. This looks at the
how well businesses embrace these develop- dynamics surrounding social networks, com-
ments in order to work with information with the munities and other personal-content
same flexibility as individuals. pub/share models, wikis, and other collabora-
tive-content models. Most Web 2.0 adherents
Andrew Fano is a research director at Accenture adopt this view, focusing on what they call the
Technology Labs. “architecture of participation.”
• Business and process. This embraces Web

service-enabled business models and mash-
up/remix applications, including advertising,
software as a service, and other subscription
models. Businesspeople tend to zero in on
this angle.
Web architecture represents a new paradigm for

building, deploying, and running applications. A
subset of service-oriented architecture (SOA), it
provides a globally linked, decentralized model
that’s network-centric and extensible. It’s cur-
rently characterized by technologies like AJAX
and the use of next-generation APIs (WS, POX,
REST). These can expose elements of a site or
application using software as an SOA and com-
posite applications delivered as mash-ups—that
is, Web sites or applications that combine con-
tent from multiple sources.

These concepts, currently focused primarily on fore more challenging, and Gartner expects
consumer markets, will impact enterprises as the adoption within large enterprises—as opposed
Internet remains the primary vehicle for con- to startups—to be at a much lower level than the
sumerization. Web platforms will emerge as ven- simple incorporation of technology.
dor-specific implementations of Web architecture
that will increasingly define the model for per- Web 2.0 is consistent with what we refer to as
sonal and enterprise systems. global-class computing—an approach to design-
ing systems and architectures that extends com-
While it’s straightforward to add specific tech- puting processes outside the enterprise and into
nologies like AJAX and RSS to products, plat- the culture of consumers, mobile workers, and
forms, and applications, it’s more difficult to add business partners. Key to this approach is an
a social dimension, such as user-contributed emphasis on interoperability via Web-based
content, or a new kind of business model if it standards. The architecture of the Web, especially
hasn’t been built into the application. Adding as it evolves, can be thought of as the basis for
these requires rethinking the design of the sys- the next generation of global class.—David
tem, and possibly its target audience. It’s there- Mitchell Smith, VP and fellow at Gartner Research

BACK TO HOME Optimize, May 2006
Smarter Use
Of Business Intelligence
With BI as a top priority, CIOs must expand
business strategies across the entire organization
By Betsy Burton and Mark McDonald Business expectations for IT have changed
dramatically—executives are pushing CIOs to
Powerful external forces are move beyond cost, security, and quality and
shaping the CIO’s agenda. focus more on specific business needs. And
Enterprises are broadening CIOs believe that business intelligence (BI) can
their focus from providing effi- help achieve these goals.
cient operations to creating
new sources of advantage in According to the survey, BI applications are
highly competitive markets. In CIOs’ top technology priority in 2006—and, for
response, IT executives must develop busi- the second consecutive year, business-
ness tools that absorb and analyze an explo- process improvement is their No. 1 business
sion of information from partners and cus- concern (see chart, above).
tomers. This direction is evident from our
January 2006 Gartner Executive Programs sur- These priorities highlight how CIOs are work-
vey of 1,400 CIOs. ing across dual tracks to improve the busi-

ness. One track will require working in the and analysis. This way, multiple BI users can
business trenches, delivering technology serv- lead, decide, measure, manage, and optimize
ices and improving processes; the other will performance to evaluate new sources of infor-
involve new capabilities to support competitive mation and reap financial benefits.
differentiation and customer choice. BI can
help connect these tracks, but it requires CIOs The current holistic view of BI encompasses
to rethink their strategies. business objectives, performance manage-
ment, people, processes, analytics, reporting,
To launch successful BI initiatives, CIOs must online analytical processing (OLAP), and query
adhere to the following principles: technologies—all sitting on an information-
management infrastructure. This BI is about
1. Understand overall business goals and using information and analysis to spur busi-
objectives. ness growth and transformation.
2. Assess the organization’s level of maturity in To capitalize on the real value and potential of
relation to technology infrastructure and BI, users should turn more traditional
information analysis. approaches upside down—shifting the focus
from technology that serves a small segment
3. Define an organizational structure that bal- of decision-makers to a much broader initia-
ances business, analysis, and technology to tive that puts people and business objectives
support the evolving and dynamic business first. Leading BI initiatives are interactive, flexi-
objectives. ble processes that take into account the needs
and skills of people within the company. This
Changing BI focus means viewing BI as a continuum that spans
diverse users—including managers, workers,
Traditionally, BI was considered a layered sales representatives, senior executives, part-
technology tied to a specific database-man- ners, customers, and suppliers—where tools
agement system. The goal was simply to pro- identify new business opportunities, integrate
vide executives with reports and dashboardlike business processes, and build collaboration
views of what departments were doing, how across the business.
well they were doing it, and where opportuni-
ties for growth might lie. But this approach In assessing an organization’s readiness for
limited thinking and support. Now, organiza- using BI pervasively, Gartner uses a graph that
tions are increasingly supporting BI so that plots the maturity of the technology infrastruc-
diverse people can better use the information ture against the maturity in the use and analy-
sis of information (see chart, above). The ideal
maturity curve would approximate a linear
relationship between the technology-maturity
axis and information analysis: The more
investment you make in BI-related technology,
the broader the use and analysis of informa-
tion. However, most organizations don’t follow
the ideal trajectory, but fall into one of three
places on the curve:
• Information apathy. Despite sizable invest-

ments in BI infrastructure and products, busi-
ness-community adoption is meager at best.

• Analytic obsession. This is where the tech- the requirements, including data quality and
nology infrastructure is incapable of support- governance; and help the company understand
ing the broad and pervasive use of BI. how insights should be interpreted and applied
Therefore, islands of analysis have emerged,
typically sitting on top of specialized infra-
structures and managed by disparate IT
groups.
• Information anarchy. Unfortunately, this cat-

egory is far too common: Spreadsheets are
used as BI Band-Aids—the need for analysis is
high, but the infrastructure can’t support it in
any way.
To move beyond these stovepipe initiatives

and transform the business, companies must
change the way they implement and manage
their information architecture and application
portfolios, better integrate BI with business to business decisions (see chart, below).
processes, and sharpen users’ information-
analysis skills. But while these steps will go a To support the strategic and tactical focus, the
long way toward making BI a core competen- BICC should report to the CIO or another
cy, most companies will still need to address high-level executive, such as the CFO, chief
critical factors that help determine the busi- operating officer, or chief strategy officer.
ness case and organizational priority for BI. Moreover, the BICC must be dynamic—chang-
Often, there are multiple buying centers for BI, ing size, participation, and/or roles based on
each with its own agendas and initiatives. business objectives.
There may be additional requirements, such as
a need to reduce the cost of the infrastructure, Intelligence evolution
to improve data quality, and to form a single
version of the truth. Obviously, many vendors Designing a BICC is the first step to an ideal
have jumped into BI to satisfy these goals. BI strategy. But over the next five years, BI will
become increasingly pervasive across the
Meanwhile, it’s not uncommon to have a large business, with the number of users rising
number of plans competing for the same fund- exponentially. This means it will be integrated
ing. Priorities vary widely among organizations, into broader applications, including collabora-
and the decision-making process tends to be tive tools and search, and emerging technolo-
rooted deeply in the particular culture, leader- gies such as guided query analysis and visual-
ship, management methodologies, and skills. ization. And diverse users, including partners
As a result, the greatest challenge to BI imple- and customers, will leverage its benefits.
mentation lies not in the technologies, but in
the organizational dynamics that must be There are two major forces fueling the BI evo-
overcome. lution: a higher degree of usability in applica-
tions to integrate more fully within business
The key to successful BI is to build a BI com- processes, and increased technical knowledge
petency center (BICC), consisting of represen- on the part of the average worker.
tatives from the business areas of the company
as well as the IT gurus. Its mission is to devel- The future of BI lies in the methods, practices,
op overall strategic plans and priorities; define and technologies becoming completely inte-

grated into our everyday work. This won’t just from every business level who will strive to
be within front-end applications. To support make the business better.
flexibility and diverse applications, user-orient-
ed visualization tools will be based on finer- BI’s role will continue to change dramatically
grained service-oriented architectures. as a new generation of users, applications,
and processes takes hold. CIOs face a unique
Infrastructure services that manage and deliver opportunity as information pours in from tradi-
data will be constructed with the understand- tional BI sources, customers, and partners. By
ing that it’s the content quality and ease of productively gathering all this information,
translating data between multiple business- executives can fully integrate BI with core IT
context definitions that creates the highest architecture and business processes to devel-
degree of data reuse. op new strategies for growth.
CIOs should think beyond traditional roles, Betsy Burton is a VP and distinguished analyst
questions, and audiences, and consider the at Gartner. Mark McDonald is a group VP and
opportunities to support a new breed of BI head of research in Gartner Executive
users and requirements. To staff a BICC, Programs (EXP).
they’ll need to find creative, energetic thinkers

BACK TO HOME Bank Systems & Technology, July 28, 2006
The Next Level

in Business Intelligence
Business Intelligence advances through the use of superior
data management, predictive analytics and enterprisewide strategies
By Nancy Feig reported plans to increase their BI budgets by an

average of 4.8 percent in 2006. Further, Gartner
While the goals of business intelligence always forecasts that the new license revenue in the
have been to improve the value of customer rela- worldwide BI software market will reach $2.5 bil-
tionships and thus the bank’s bottom line, the lion this year, a 6 percent increase from 2005.
ever-increasing competitive business environ-
ment in financial services is forcing banks to From Tactical to Strategic
rethink their BI strategies. A new philosophy cen-
tered around enterprisewide use of BI tools — To optimize their BI investments, however, banks
coupled with advances in analytics and data have some work to do, experts agree.
management — is helping banks make better Traditionally, banks have used business intelli-
and more-profitable business decisions. gence in a compartmentalized manner, accord-
ing to Betsy Burton, VP and research area direc-
All the arrows point to the increasing priority tor at Gartner. Each business unit had its own
placed on BI by financial services firms. As com- business intelligence tools, she says, partly
panies seek to enhance their decision-making because bank units often compete internally with
capabilities for everything from underwriting to each other. But the current globally competitive
cross-selling to risk management, investment in landscape is forcing banks to rethink their use of
BI-related technology is on the rise in banking — business intelligence.
according to TowerGroup (Needham, Mass.),
spending on BI will reach $16 billion to $17 bil- “Banks need to begin looking at business intelli-
lion in 2006. gence generally, not specifically, something the
retail manufacturing industry is already doing
And in a recent Gartner (Stamford, Conn.) survey well,” Burton says. To realize the full potential of
of 1,400 CIOs who head IT organizations BI tools, banks must view BI on an enter-
employing an average of 300 IT professionals prisewide basis, she suggests, adding that
with an average IT budget of $71 million, respon- banks should decide where they want to go as a
dents identified BI as their top technology priori- whole, not as individual units. “In the past, banks
ty in 2006. Additionally, the CIOs — 16 percent haven’t had to think strategically because they
of whom are from the financial services sector — had been making so much money,” Burton says.

Now, banks need to “get together on a strategic from BI provider SAS (Cary, N.C.). “The compe-
level,” she advises. tency center provides a single point of contact to
the BI expertise and knowledge in our organiza-
Other industry observers share Burton’s point of tion. This enables us to efficiently support the
view. “Banks have very disparate [BI] technology needs of business users and transfer the skills
systems,” says Guillermo Kopp, VP, cross indus- they need to get the intelligence they need to
try, for TowerGroup. “It’s all over the place.” drive the business forward.”
According to a report coauthored by Andrew Organizing an enterprisewide BI strategy in

Kellett, senior research analyst at London-based banks with numerous BI tools in their different
Butler Group, “The era in which the isolated use units, however, may be a pipe dream for many
of multiple BI tools can be relied upon to support large banks because of the sheer number of dis-
enterprise decision making is outdated, ineffi- parate systems, points out TowerGroup’s Kopp.
cient and must come to a close.” Further, the Still, these banks should try to combine BI sys-
report, “Business Intelligence — A Strategic tems across separate units where possible if an
Approach to Extending and Standardizing the overall strategic plan isn’t an option, he says.
Use of BI,” asserts that, “Over the last five years, “Absent complete integration, [banks] are com-
business has spent too much of its IT budget on bining across information silos,” Kopp says.
the purchase of ineffective departmentally
focused data and interrogation tools.” Turning Data Into Value
To centralize BI decision making, financial institu- The quality of the available information goes a
tions are creating dedicated, cross-functional long way toward determining the success of any
groups within the organization known as busi- BI initiative, and large data volumes — often
ness intelligence competency centers (BICC). stored in silos — present a major challenge for
BICCs are akin to advisory panels or user groups BI at banks. As a result, data management is a
that oversee the overall business strategy within huge piece of the BI puzzle. According to Kopp,
a bank. The job of the BICC is to assess the there are several stages needed in data manage-
goals of business intelligence initiatives, oversee ment to achieve the ultimate goal of creating
technology implementations and measure the customer value: awareness, then governance
success of completed projects. “As BI becomes and finally combination.
increasingly more strategic, IT departments are
looking for ways to manage and support deploy- “We are challenged with the complexity of culti-
ments across divisions, regions and functions,” vating millions of individual customer relation-
according to “Building a Better Business ships across multiple channels with increasing
Intelligence Competency Center,” a June report volumes of data,” said Matt Harris, head of CRM
from Ottawa-based BI-software provider for London-based Barclays Bank ($575 billion in
Cognos. “A BI competency center can provide assets), in a release. To better understand and
the centralized knowledge and best practices to leverage its customer data, Barclays recently
help make this broader BI initiative possible.” implemented the Teradata CRM software appli-
(See related sidebar for more on BICCs.) cation from Teradata, a division of NCR (Dayton,
Ohio). Harris explained that the Teradata CRM
Banks with established BICCs seem happy with solution enables event-triggered marketing at
the results. “We have made a significant invest- Barclays through the creation of business rules
ment in business intelligence technologies and that are automatically deployed within the bank’s
want business users to take full advantage of data warehouse. The solution identifies signifi-
this,” said Yves Roelandt, department head cant changes in customer behavior that are
BICC, KBC Bank & Insurance Group (Brussels; indicative of new financial interests, allowing the
US$402 billion in assets) in a June 2005 release bank to act upon the information with relevant

and timely offerings that meet the customer’s and delivering it to the right person” notes Susan
needs, according to Teradata. Duchesneau, SAS global industry strategist for
financial services. She recommends that banks
Wachovia ($497 billion in assets) also turned to target a robust BI solution that runs the gamut of
BI to better understand its customers. To meas- capabilities.
ure customer loyalty and drive future business
decisions, the Charlotte, N.C.-based bank But, “With sophistication comes complications,”
recently chose SAS. Using survey results along- Wachovia’s Thorpe concedes. The banks biggest
side historical customer data, the bank will challenges are with some of the solution’s graph-
attempt to understand what drivers affect cus- ical displays — or dashboards — because of the
tomer loyalty, says Dan Thorpe, SVP and statis- huge amount of data with which the financial
tic and modeling director of Wachovia’s cus- institution is dealing for its more than 13 million
tomer analysis research and targeting group. customers, he relates. Sometimes the sheer vol-
ume of data can create information overload,
The next step in the equation, Thorpe notes, is Thorpe says.
evaluating customer equity. Customer equity, he
explains, is a lifetime measurement of how much Rise of Predictive Analytics
value each customer brings to the bank, and how
Wachovia can improve on that value. “Customer Still, the vast wealth of data at banks’ disposal
equity is a way of looking at the customer presents a tremendous opportunity, and how
beyond just the products,” Thorpe says. “It’s all and when banks utilize this data is changing.
the products the customer will have, how long With advances in predictive analytics, “now” is
they have those products and the value of those now too late when it comes to delivering deci-
products over a customer’s lifetime,” he adds. sion-making information inside the bank. Instead
of real-time information, decision makers at
“Executives want to know, if we increase a cus- banks now are asking for BI systems that predict
tomer’s value, how much extra profit that means the future. BI is “going up steps from reactive to
to the bank every year,” Thorpe continues. “We proactive,” says Ronnie Ray, VP, marketing for
are using SAS to really understand and model Infovista, a Herndon, Va.-based performance-
our customer’s balance history, their revenues, management software company.
their profits, the number of products and their
tenure.” As a result, Thorpe says, Wachovia is With more and more sophisticated information,
able to offer customers products and services banks can spot trends and cycles, even by cus-
that meet their needs as well as determine what tomer type, according to TowerGroup’s Kopp.
strategy would be most profitable for the bank. Predictive analytics can be used across the bank,
particularly in the areas of marketing, capacity
Thorpe stresses that the bank depends heavily planning and risk management, he says.
on SAS for the analysis, which allows the bank
to have a more holistic view of what each cus- “For years, banks have talked about cross-selling,”
tomer needs and target its marketing, adding says Kelly Pennock, CEO of Bellevue, Wash.-
that Wachovia chose SAS because of the com- based Intelligent Results, a provider of analytics
prehensive nature of the vendor’s solution. “We and decision-management software. “The real key
nailed it faster than if we would have had to to cross-selling is being able to determine what
work with three or four different companies,” new offer will motivate which individual customers
Thorpe says. to buy a new product or service.”
“It’s very important that a business intelligence Worldwide revenue from predictive analytics will
solution handle everything that’s needed, from grow through 2008 with a compound annual
pulling data, cleaning data, creating intelligence growth rate of 8 percent, according to a 2005

study from IDC. The Framingham, Mass.-based To leverage business intelligence more effectively
research and consulting firm defines predictive across the enterprise, many banks are imple-
analytics as the use of sophisticated analytics, menting business intelligence competency cen-
which are more complex in their mathematics ters (BICCs). In fact, many experts say that with-
than core analytics, to determine the likelihood out a BICC, it is almost impossible to effectively
of future trends or events. run BI tools within an organization.
Some banks are taking predictive analytics a While there is no specific formula for the optimal
step further. Cincinnati-based U.S. Bank ($208.9 BICC, typically, a BICC includes about 10 to 12
billion in assets), for example, recently selected executives in the group, made up of members of
Fair Isaac’s (Minneapolis) Strategy Science tool the bank from the IT side and the business side
for its risk management practice. Fair Isaac is (those who will actually be using business intelli-
developing a decision model for U.S. Bank’s gence). According to Ottawa-based BI software
credit line management that leverages the bank’s provider Cognos, “As an absolute minimum,” the
own data and analytics to go beyond predictions BICC should consist of a BICC director/manager,
to make actual decisions. To do that, Strategy a business analyst and a technical consultant.
Science combines methodology, process and
platform, and models the economics of cus- According to Cary, N.C.-based BI solutions
tomer decisions, according to Fair Isaac. provider SAS, a BICC should provide the follow-
ing functions:
A decision model maps the relationship between
multiple input variables to the range of decision Oversight of a BI Program — Define and monitor
choices available to the user. Strategy Science implementation of the BI strategy; be responsible
works by establishing optimal actions for organi- for consistent BI deployment; and provide stan-
zations to take for customers in any area, says dards, technology assessments, knowledge
Sally Taylor-Shoff, VP of analytic product man- management, best practices and business ana-
agement at Fair Isaac. “It explicitly manages the lytics expertise.
trade-off between risk and reward or cost and
benefit,” she adds. Strategy Science enabled Data Stewardship — Provide metadata manage-
U.S. Bank to see exactly what would happen if a ment and set data standards.
customer’s credit line was increased and make
the appropriate decision based on its risk-reward Support — Respond to user questions.
formula, Taylor-Shoff contends, helping the bank
increase its profits by $7 per active account. BI Delivery — Oversee front-end development,
testing and maintenance.
Intelligent Results also recently released a prod-
uct that integrates BI analytics and decision Data Acquisition — Oversee data integration and
management. The new software, Predigy, data store development, testing and mainte-
includes five modules that map each step in the nance.
analysis-to-action progression, according to the
firm’s Pennock. With such developments in pre- Advanced Analytics — Guide data mining and
dictive and actionable analytics, “From now on, statistical modeling.
banks can focus on action, not just customer
outreach,” she says. * Training — Train end users and project teams.
Business Intelligence Vendor Contracts Management — Evaluate ven-

dors and user licenses.
BICC: At the Helm of Business Intelligence

BACK TO HOME Insurance & Technology, July 19, 2006
Executive Insight: Enterprise

Data Warehousing Renaissance
By Alfred Goxhaj The availability of high-performance hardware and
software infrastructure components has influ-
Enterprise data warehousing (EDW) is experienc- enced this late bloom and made EDW an achiev-
ing a renaissance of sorts. Although it was able goal even for smaller organizations.
explored and practiced throughout the 1990s and Technologies have become available for extrac-
early years of the 21st century, EDW has recently tion, transformation and loading, relational data-
evolved from a highly theoretical approach into a base management systems and business intelli-
mainstream architecture. The design and imple- gence platforms, thus removing two of the great-
mentation of EDW in the early days presented est barriers EDW faced in the mid-nineties: poor
challenges that were exacerbated by lack of implementation of the architecture and sluggish
appropriate hardware architecture and acceptable processes of information delivery. Failure of popu-
performance, as well as technologies that aimed lar architectures - such as pure bus architecture
to facilitate the integration of various data sources for large integrated data systems - has also driven
into one logical and physical model but were too an upsurge in EDW initiatives. These factors,
immature to achieve it. Today, armed with combined with the desire to build bigger and bet-
advanced tools aimed specifically at building large ter structures to support more-complex business
enterprise-scale data repositories, more and more intelligence and operational applications, have
organizations are trying to achieve success in injected new life into the EDW school of thought
EDW within a short period of time. and driven major undertakings currently underway
in many organizations.
In addition to the more avant-garde, information-
centric businesses, such as telecom and finance, Insurance businesses, particularly the mid-sized
EDW is now gaining greater acceptance in tradi- companies that started their data warehousing
tionally conservative (from an analytical methods efforts in the early 2000s, are showing a strong
point of view) industries such as insurance, gov- interest in EDW. They see this strategy as a
ernment operations and pharmaceuticals. Today, means to wrap their business processes with
there is greater emphasis on performance man- information-rich solutions generated by integrated
agement in government, predictive analytics and data warehouses where a multitude of sources
financial governance in the insurance industry, are combined under one logical structure. As is
and sales force alignment in pharmaceuticals. always the case with good but rather complex
These activities and others require information products, they do not always turn out as planned,
that spans multiple business lines and subject especially in their early releases.
areas, a wider time horizon and a larger-than-ever
number of participating data sources. Insurance organizations need to make sure the

proper approach is taken in order to ensure the Creating a complete view of the business is a long
successful design and implementation of an EDW. journey, requiring a road map that clearly identifies
all milestones in building the warehouse. This will
1. Integrate, integrate, integrate enable the integration of various subject areas in
an iterative fashion based on company goals and
At its most granular level, an insurance organiza- objectives. This process of integrating subject
tion revolves around the policy and several key areas will be threaded by the same architectural
business functions: underwriting, claims, actuarial design concept and, like pieces of a puzzle, will
and finance/investments. Over the years, the lega- add to the details of the full business picture.
cy business has created numerous silos of data
stores, each with their own data quality protocols, It is also important to note that special considera-
business rules, data structures, etc. Each silo pro- tion should be given to both logical and physical
file usually reflects one line of business, or a major designs. Logical integration does not necessarily
component of the business, such as claims or mean a monolithic physical architecture. The
policy administration. In some extreme cases, no physical architecture should be flexible and allow
two silos are alike in terms of structures, data for quick delivery and superior performance.
types and business rules, and, as a consequence,
neither is the information they produce. In order to 3. Flexible design - To normalize or denormalize?
create an environment conducive to enterprise- Since enterprise data warehouses consist of inte-
level business intelligence, it is necessary to integrated architecture of various subject areas and
grate all these types of data into one logical and data domains, they necessarily gravitate more
physical structure that reflects the business archi- toward normalized schema. Normalization creates
tecture and process flow. a flexible environment that permits rapid accom-
modation of data in an iterative fashion. New data
It is only then, when a high degree of integration will always be the reality of such data architec-
is achieved, that a comprehensive view of the tures. Due to the size and versatility of EDW,
insurance business can be created. changes will always occur and should be
accounted for in the schema construction.
2. A multi-polar world of data - Integrated
subject areas and data domains Normalization helps designers and implementers
accommodate changes quickly and in the most
In order to unify data under a single architecture, economical manner. It also serves as a technique
and supply it to the business for meaningful busi- to directly reflect the business process workflow
ness intelligence, all transaction systems or infor- and can, therefore, change as fast as these
mation subject areas should be represented in the processes do. Both of these observations express
warehouse. Complete, clean data from all busi- a crucial characteristic of data warehouses:
ness areas will enable the creation of a unified adaptability.
and unique view of the entire organization’s busi-
ness processes and their consequences in the It is generally difficult to anticipate what future
market place, via basic unaltered data — or, as it requirements will be addressed by the warehouse
is commonly known, a “single version of the or how it ultimately will be used. However, it is
truth.” The multiple subjects allow “information clear that even with advancements in hardware
catering” for anyone interested in extracting intelli- and RDBMS software, normalization will remain a
gence from the data. Simultaneously, the integrat- problem in terms of performance and complexity.
ed subject areas provide a complete view of the It may get costly to optimize and beef up the
enterprise based on an unaltered and unique hardware to the point that performance is not an
value of the objective business facts collected by issue. The complexity of normalized structures
the transaction systems. also becomes a business issue since the less
technically proficient users (business power users)

of data and information will find them difficult to attributes that define a highly scalable architecture
navigate and understand. as well. Those attributes can include enterprise
metadata, data quality, match/consolidation, per-
Therefore, for some time to come, denormaliza- formance monitoring, application check-pointing
tion still will be seen as a way to improve perform- and the degree of freedom power users have
ance and, first and foremost, as a technique that when exploring the data in the warehouses. The
simplifies data relationships for business users. It EDW solution should be able to accommodate
is also the basis for unifying all standard business any type of query regardless of its complexity
views or conformed dimensions around the same and data volume and bring back high-quality
base metrics, the same version of the truth. But information within a reasonable amount of time.
does the denormalization violate the principles of That means it is imperative to rationalize the
EDW architecture? Not necessarily. The EDW design across all subject areas, and make it flexi-
should be an instrument for organizing data, while ble enough to accept changes at any time and at
integrating and delivering information in the most any level of complexity.
comprehensive way to all facets of an organiza-
tion. As a result, denormalization needs to accom- To summarize, scalability for EDW means: flexible
modate all types of structures without becoming logical and physical model, query freedom, data
totally dependent on a certain degree of granulari- quality, rich metadata, high availability system, high-
ty or native relationships between data. performance loading and querying, support for high
concurrency and, last but not least, tight operational
4. Performance vs. scalability control of the entire processes/systems.
Some of the operational concerns with an EDW 5. Long-term commitment

design are performance and scalability. One sign of
an enterprise data warehouse’s success is its wide- An EDW is a significant investment for any organi-
spread acceptance across the organization. For the zation. An ROI rationale needs to guide its design
most part, quick adoption depends on how much and implementation, as a significant investment
versatile information users can retrieve quickly. will be needed to build the complete architecture
Versatile information facilitates large, complex and infrastructure. Organizations need to clearly
queries. High acceptance means also high frequen- articulate the needs, objectives, benefits and abili-
cy of users querying the database concurrently. ty to commit for a long time before they undertake
the daunting task of building an EDW. Design and
Let’s consider questions relating to the volume of implementation methodologies, such as an itera-
data and speed of access. The amount of redun- tive and evolutionary approach, can help to abate
dant data likely to end up in the EDW will result in the financial and operational pain associated with
slow performance. High volumes of concurrent this task. Each iteration must be linked to specific
queries are another cause of poor performance. business goals, provide new information to the
Measures need to be taken in order to eliminate business and show significant progress toward
both of these degrading factors. Those measures completing the enterprisewide analytical puzzle.
could involve changes in the logical architecture,
such as denormalization, aggregation and sum- Unless the EDW is seen as a solution critical to
marizations, as well as modifications to the physi- achieving superior business intelligence and deci-
cal architecture, DBMS and/or hardware-related sion making capabilities that will translate into
strategies such as massive parallel processing, major financial gains over time, it should not be
shared everything vs. shared nothing, workload considered for implementation.
distribution, failover protection, etc.
Alfred Goxhaj is assistant vice president of enter-
While scalability always is seen as a physical prise data for Harleysville Insurance, Harleysville, Pa.
attribute of the EDW, there are some logical

BACK TO HOME intelligententerprise.com, June 20, 2006
Operational Intelligence
Enters the Spotlight
Understanding the technology components of OI.
By Dan Everett from multiple sources that flow across the enter-
prise service bus. To do this requires a broad
Summary spectrum of input adapters for things such as
Ventana Research has defined a new category of system logs, network protocols, relational data-
software called operational intelligence (OI). For bases, API calls, messaging queues and Web
front-line workers who need to improve their services. The input adapters must be able to
execution of the daily tasks that contribute to detect events at different points in the business
achieving strategic goals, OI reduces latency in process workflow to enable throughput and tem-
awareness, evaluation and management of poral analysis. (From an OI perspective an
changes in the state of business performance. “event” is an object that contains information
Unlike business intelligence (BI), OI uses an about a change in the state of an operational
event-driven architecture to detect the current activity or process. For example a new customer
state of activities and processes and analyze order would be an event that contains informa-
them against expected states. Unlike business tion such as products, quantity and price, which
activity monitoring (BAM), OI embeds intelligence is used in the process of filling the order.)
into process workflows that helps users deter-
mine the most appropriate response to threats Further, OI must be able to detect events across
and opportunities. multiple processes and nonlinear workflows in a
single process, which enables correlation of activi-
Operational intelligence incorporates technology ties to changes in business performance. This last
components from other software categories, aspect requires workflow modeling capabilities or
among them business intelligence, business the ability to integrate with modeling tools using
rules, complex event processing and business workflow specification languages such as
process management. These components Business Process Execution Language (BPEL).
address different aspects of events, the data
they contain and the processes they are part of OI also requires the capability to model the
to improve front-line decision-making. attributes, constraints and dependencies of
events. As an information object, an event is an
View entity that has attributes, such as data values,
The first requirement of OI is to integrate events time of occurrence, process ID and workflow

sequence, that can be used to define queries Assessment

and constraints for simple pattern-matching. For organizations that need to improve opera-
Event entities also have dependencies between tional performance, Ventana Research recom-
each other that can be modeled into hierarchies mends using event-driven architectures to align
and used to match against more complex busi- front-line workers’ daily tasks with strategic
ness patterns. Predictive analytics can assist in goals. Companies should start by defining a use
the creation of an event model when the struc- case that requires reducing the latency in aware-
tures and relationships are not well-understood. ness, evaluation and management of changes in
Users can employ statistical modeling to esti- the state of operational performance. Then take
mate the attributes and dependencies when the an inventory of what technology components
general event structure can be hypothesized on you already have for filtering specific events out
the basis of domain knowledge and analysis. If of the streams flowing across the enterprise
the structure is completely unknown, data mining service bus, aggregating them into higher-level
can be employed to infer both the attributes and patterns, evaluating pattern instances against
dependencies of an event model. constraints, and executing rules and controls in
response to changing business conditions. Next,
The event-processing engine matches sets of perform a situation assessment to identify gaps
events from different workflow streams against and analyze what level of interoperability is
patterns in the event model. Filtering reduces the required between the technology components.
total event set to just the relevant subsets, which Once that is done, you can compare the time
are aggregated based on dependencies at differ- and cost of building the OI application versus
ent levels within the model hierarchy. Then the buying it from a vendor that has already integrat-
event engine uses constraints to detect patterns ed the technology components.
that should never occur, those that should
always occur and changes in state conditions at About Ventana Research
different hierarchical levels. When constraints are Ventana Research is the leading Performance
violated, the event processing engine executes Management research and advisory services
response rules, such as delivering information to firm. By providing expert insight and detailed
front-line workers or changing the routing of guidance, Ventana Research helps clients oper-
process workflow. ate their companies more efficiently and effec-
tively. These business improvements are deliv-
At a human interface level, OI uses dashboards ered through a top-down approach that con-
to deliver personalized views of process activi- nects people, process, information and technolo-
ties and events. Semantic layers take the burden gy. What makes Ventana Research different from
off the user to sort out inconsistencies between other analyst firms is a focus on Performance
the meanings of event information displayed Management for finance, operations and IT. This
from different applications. Dashboards enable focus, plus research as a foundation and reach
users to drill down through the event hierarchies into a community of over two million corporate
to understand the underlying causes of complex executives through extensive media partnerships,
event patterns. Federated query and search allows Ventana Research to deliver a high-value,
capabilities enable front-line workers to access low-risk method for achieving optimal business
information in databases, documents, and e-mail performance. To learn how Ventana Research
messages and on the Web to add context to Performance Management workshops, assess-
event information. ments and advisory services can impact your
bottom line, visit www.ventanaresearch.com.

BI Is More Than a Dashboard

User interface must meet business needs.
By Dan Everett key performance indicators and the ability to

change perspectives on the fly.
Summary
Although dashboards are a hot topic in business Our research on Microsoft Office and BI shows
intelligence (BI) circles, a successful BI deployment that managers who need to explain current levels
involves more than putting one between user and of business performance most often use
data. It requires careful consideration of users’ PowerPoint to communicate their findings. In
access needs, technical skills and roles in the more than half of organizations we polled, pre-
organization. A one-size-fits-all approach to imple- sentations are created and updated on at least a
mentation can lead to low adoption and usage. weekly basis, and managers almost always have
Planning with users in mind is a cornerstone of to provide additional information not in the slide
preparing BI to deliver real business value across deck as part of the process of delivering the
functional groups and management levels. insights to their audiences. The most important
criteria for user satisfaction here are the abilities
View to create and update PowerPoint files without
To increase BI adoption and thus the value con- cutting and pasting charts from Excel and to
veyed by access to needed information, compa- access BI semantic layers to perform ad-hoc
nies must tailor the software user interfaces to queries directly from PowerPoint.
the needs of different business groups.
Dashboards, for example, are used primarily by Analysts are a technically and business savvy
executives and line-of-business managers to user group that want to use spreadsheets to
manage by exception without having to search model scenarios and run allocations that test the
through multiple reports and spreadsheets to see assumptions used to create corporate goals and
what is happening across departments, prod- plans. They also need to be able to demonstrate
ucts, customers and geographical regions. Our to other groups of decision-makers where the
research on dashboards shows that the most data came from and the accuracy of the busi-
important criteria for user satisfaction are access ness logic. The most important criteria for user
to multiple data sources, the ability to drill down satisfaction are ease of accessing centralized
into supporting detail, ease of defining/adding data and calculations, the ability to convert BI

report formulas to Excel formulas and preserva- evaluating vendors as candidates to become
tion of formulas and formatting when a query is the corporate standard for BI, a primary evalu-
refreshed. ation criterion should be the product’s ability to
address users’ access needs, technical skills
Our research on operational BI shows that front- and roles in the organization flexibly.
line workers access information most frequently
through prebuilt HTML or PDF reports. These About Ventana Research
workers also run custom reports to get informa- Ventana Research is the leading Performance
tion not available via the prebuilt templates; they Management research and advisory services
do so by selecting query parameters from prede- firm. By providing expert insight and detailed
fined lists built into the user interface. The most guidance, Ventana Research helps clients oper-
important criteria for user satisfaction here are ate their companies more efficiently and effec-
access to financial and operational data, the tively. These business improvements are deliv-
ability to support multiple output formats, ease ered through a top-down approach that con-
of scheduling report delivery and the ability to nects people, process, information and technolo-
create custom reports without having to know gy. What makes Ventana Research different from
SQL or Excel functions and macros. other analyst firms is a focus on Performance
Management for finance, operations and IT. This
Assessment focus, plus research as a foundation and reach
Our research shows user evaluations of appli- into a community of over two million corporate
cation success are significantly higher for IT executives through extensive media partnerships,
organizations that involve users in defining the allows Ventana Research to deliver a high-value,
information access requirements. So IT organi- low-risk method for achieving optimal business
zations that want business users to recognize performance. To learn how Ventana Research
the value they provide should ensure BI inter- Performance Management workshops, assess-
faces are tailored to the needs of the various ments and advisory services can impact your
business groups that use them. Ventana bottom line, visit www.ventanaresearch.com.
research therefore recommends that when

BACK TO HOME techweb.com, May 8, 2006
Oracle Delivers Compliance,

Risk, Reporting Tool
By Laurie Sullivan, TechWeb Technology News The majority of data flowing into Oracle Daily
Business Intelligence for Compliance originates
Embedding analytics into enterprise applications, in the Oracle E-Business Suite, but the module
Oracle Corp. made good on a promise to deliver can potentially manage and monitor information
compliance management reporting capabilities in from other platforms, too.
the Oracle E-Business Suite. The Redwood City
software company rolled out Oracle Daily Oracle spent one year developing Oracle Daily
Business Intelligence for Compliance on Monday. Business Intelligence for Compliance, which sits
on the Oracle Internal Controls Manager. Several
The module offers pre-built key performance indi- “very, very large customers” are installing the
cators (KPIs) and reports in a dashboard illustrat- module, but none deployed. Installation varies,
ing performance in bar charts, graphs and reports. Leone said.
Visual reporting identifies the effectiveness of a
business processes, or how many employees Varying factors include the complexity of the
completed a mandatory certification process. deployment and quantity of controls to monitor
and mange, but “we’ve seen organizations deploy
Determining the associated risk for that business this as short as a month,” Leone said. “It really
process depends on the number of ineffective depends on the types of controls to monitor and
rules based on performance measures preset by mange rather than the technology deployment.”
the manager in charge of that task. The application
identifies the tasks in color-coded bars that appear Deployments should happen quickly, Leone said,
in the dashboard. For example, a graph indicator if processes are in place and the company only
reflecting a negative evaluation appears in red. wants to take what’s been managed in spread-
sheet and diagraphs previously, and flow that
“An accounts payable manager responsible for into the Oracle Internal Controls Manager with
specific processes would be accountable for the Oracle Daily Business Intelligence for Compliance
controls associated with the task,” said Chris running on top. Reevaluating risk and controls
Leone, Oracle’s group vice president applica- take longer.
tions group. “If it’s getting close to the end of the
quarter and certification completion percentages Oracle Daily Business Intelligence for Compliance
track lower than expected, she can drill down to costs $30 per employee with a minimum of 500
understand who hasn’t completed the process.” employees. The application is available now.

Oracle Plunges Into BI

Companies to deliver advanced messaging service to
enterprise customers using the PalmOne Treo 600.
By Laurie Sullivan, TechWeb Technology News

organizations. “We’re able to integrate the infor-
mation generated by BI products into existing
Oracle Corp. pushed into the business intelli- business applications and other Fusion middle-
gence software sector on Wednesday with three ware products, such as the Oracle BPEL Process
bundled products branded as the Oracle Manager, a tool for orchestrating business
Business Intelligence Suite. processes, so users can see the information as
they make decisions,” Schultz said.
The software suites integrate Oracle’s database,
Fusion middleware and analytics software. The The Enterprise Performance Management (EPM)
new product line also adds analytics software market will reach $23 billion in 2006, up from
Oracle acquired through the Siebel Systems $22.2 billion in the prior year, according to AMR
acquisition that closed earlier this year. Rick Research. Within that segment, BI software and
Schultz, vice president of Oracle Fusion services is forecast to rise 10 percent to $6 billion
Middleware Product Marketing, said more than 25 this year, the research firm said.
percent of Siebel’s business came from analytics.
No doubt. Oracle’s move “poses a threat” to com-
Understanding the data has become the biggest panies focused solely on BI applications, said
challenge, especially for buyers, analysts said. John Hagerty, research vice president at AMR
Oracle, SAP AG, Microsoft Corp. and other soft- Research Inc. “During the past five years compa-
ware companies offering data-capture applica- nies have moved from wanting to collect the data,
tions have taken notice. Some have gradually to gaining insight from the data,” he said. “With
stepped in to compete with those focused solely that strategy, Oracle is aiming for the hearts and
on BI. Many generate nearly $1 billion in rev- minds of the overall SAP business user.”
enue. Common BI integration tools come from
Business Objects, Cognos and MicroStrategy. SAP AG has taken a similar path, but different
road. Hagerty said SAP is integrating intelligence
When BI tools are added to the predictive analyt- and analytics into the applications, such as sup-
ics software, companies can share, compare and ply chain, customer relationship management
analyze data across departments and entire (CRM) and financials.

SAP surrounds their applications stack with Both the Enterprise Edition and the Standard
reporting and analysis, whereas Oracle considers Edition are available now. The Enterprise Edition
the applications stack and the data, Hagerty said. costs $1,500 per user. The Standard Edition
costs $400 per user.
By year’s end, Oracle Business Intelligence
Suites will support SAP’s warehouse manage- The Standard Edition One, meant to compete
ment application, said Christina Kolotouros, with Microsoft Corp.’s enterprise applications
director of Oracle BI Product Management. geared toward small and midsize businesses,
“The applications also will integrate tightly with will roll out after June 1 this year.
Microsoft Office,” she said.

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CMP

The Enterprise Edge

A CMP Guide to Introduction

Business Intelligence BI Grows Up

Optimize Intelligent Enterprise

Finally, Intelligent Businesses Operational Intelligence

Smarter Use Of Business

From the editors of:

Executive Insight: Enterprise

2 THE ENTERPRISE EDGE PLAYBOOK continues >>

3 THE ENTERPRISE EDGE PLAYBOOK

Finally, Intelligent Businesses

By Neil Raden and data-manipulation processes beyond the

4 THE ENTERPRISE EDGE PLAYBOOK continues >>

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Interdisciplinary approach Neil Raden is founder and president of con-

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Online-Only Sidebar: merger, we want to push you video training or

8 THE ENTERPRISE EDGE PLAYBOOK

Turning Data Chaos Into

9 THE ENTERPRISE EDGE PLAYBOOK continues >>

From loyalty-card data accumulated over the

As for probabilistic data, we know that traditional

Our Sensor Fusion project illustrates this prob-

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poised to make faster and better decisions than SIDEBAR

• Business and process. This embraces Web

Web architecture represents a new paradigm for

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14 THE ENTERPRISE EDGE PLAYBOOK

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• Information apathy. Despite sizable invest-

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• Information anarchy. Unfortunately, this cat-

To move beyond these stovepipe initiatives

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18 THE ENTERPRISE EDGE PLAYBOOK

The Next Level

By Nancy Feig reported plans to increase their BI budgets by an

19 THE ENTERPRISE EDGE PLAYBOOK continues >>

According to a report coauthored by Andrew Organizing an enterprisewide BI strategy in

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Business Intelligence Vendor Contracts Management — Evaluate ven-

22 THE ENTERPRISE EDGE PLAYBOOK

Executive Insight: Enterprise

23 THE ENTERPRISE EDGE PLAYBOOK

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Some of the operational concerns with an EDW 5. Long-term commitment

25 THE ENTERPRISE EDGE PLAYBOOK

26 THE ENTERPRISE EDGE PLAYBOOK

sequence, that can be used to define queries Assessment

27 THE ENTERPRISE EDGE PLAYBOOK

BI Is More Than a Dashboard

By Dan Everett key performance indicators and the ability to

28 THE ENTERPRISE EDGE PLAYBOOK continues >>

29 THE ENTERPRISE EDGE PLAYBOOK

Oracle Delivers Compliance,

30 THE ENTERPRISE EDGE PLAYBOOK