Business Intelligence Presented By: Stephanie Schwartz, Khairil Fahrvrrazi, Kevin Ruzicka, Ashley Stead April 18, 2007 1 Session Objective •To Understand: • The meaning of Business Intelligence (BI) •Why BI is important to General Managers •The promised benefits and challenges of BI •To Visualize: •Continental Airlines •Tyneside NHS Trust April 18, 2007 2 Priority Status of Business Intelligence “Business intelligence will be the top spending priority for IT executives in 2007…” Top IT Spending Priorities Item Application Integration Security SW & Svcs. Bus. Intelligence BPM SOA ’05 2 1 5 19 13 ‘06 1 2 3 4 5 Source: Saugatuck Technology. Results based on web survey of over 200 senior business and IT executives, November, 2005. *Annual Revenues ≥ $1.0B http://www.networkworld.com/news/2007/011207-business-intelligence.html, viewed April 6, 2007 Guptill, B., “User Executives Raise Business Intelligence Prioritization” Saugatuck Technology, April 18, 2007 January 2006, pp. 1-2 3 Cost of Business Intelligence BI Spending On The Rise How w ill your organization's spending on BI tools change this year? Decrease 10% Increase 44% Remain the Same 46% Data: InformationWeek Research business intelligence survey of 230 business technology professionals, March 2006 http://www.financetech.com/showArticle.jhtml?articleID=181501564, viewed April 6, 2007 April 18, 2007 4 Cost of Business Intelligence BI Spending as a Percentage of Total IT Budget In 2006, w ill BI spending account for a larger or sm aller percentage of your total IT budget com pared to last year? About the Same 49% Larger 35% Smaller 16% Data: InformationWeek Research business intelligence survey of 230 business technology professionals, March 2006 April 18, 2007 5 Cost of Business Intelligence Increase in BI Spending To w hat degree w ill your com pany's spending on BI tools increase this year? Dramat ically, by 50% or More Slight ly, by less t han 7% 25% 67% Moderat ely, bet ween 26%and 50% 26% Data: InformationWeek Research business intelligence survey of 230 business technology professionals, March 2006 April 18, 2007 6 What is Business Intelligence? Business Intelligence •Gathers important data •Consolidates the data into one location •Easily accessed and analyzed for decision making •Serves as one version of truth “Turning data into information that is useful to make decisions” “BI essentially supports a corporation’s transition from being data rich and information poor, to becoming information rich and capable of better fact-based decision making” Burns, M., “Accounting for Business” CA Magazine, Vol. 136, 3, Apr 2003, pp. 37-38 Abukari, K. and Job, V., “Business Intelligence In Action” CMA Management, Vol. 77,1, Mar 2003, pp. 15 April 18, 2007 7 Best Practices of Business Intelligence Six Steps for Successful BI 1.) Pinpoint the organization’s key factors to focus on using Business Intelligence 2.) Find the various data resources from which information will be extracted 3.) Extract, Load, & Transfer Data (ELT) 4.) Choose a method for reporting 5.) Establish reporting that will be considered standard across the Organization 6.) Arrange for deployment across theorganization Burns, M., “Accounting for Business” CA Magazine, Vol. 136, 3, Apr 2003, pp. 37-38 http://www.businessintelligence.com/print_news.asp?id=2171, viewed April 6, 2007 April 18, 2007 8 Visual of Business Intelligence OLTP – Online Transaction Processing OLAP – Online Analytical Processing http://www.obs3.com/why_olap.shtml, viewed March 29, 2007 April 18, 2007 9 Visual of Business Intelligence User Desktop BuyPoint 1 3 Journal Entries On-line or Import Templates Accounts Payable Asset Mgmt Journal Workflow Approval Process PAYROLL GL 2 Source System GL Interfaces: Billing, Claims, Commisions, etc. User GL Query nVision (CMR) Reporting User Desktop User Desktop April 18, 2007 10 Importance to General Managers BI is a valuable tool in strengthening the position of stakeholders •Important information gathered into a one stop shop •Important information available at opportune times •Important information available for strategic use “In sum, BI is an enterprise-wide strategy that supports reporting, analysis and decision making on multiple levels. It supports organization-wide analysis, which in turn leads to insight, action, and the proper measurement of results.” Abukari, K. and Job, V., “Business Intelligence In Action” CMA Management, Vol. 77,1, Mar 2003, pp. 15 April 18, 2007 11 Promised Pros of Business Intelligence BI enhances decision making •More appropriate information in a timely fashion •Can consolidate information typically difficult to use in analysis due to its primary location •Decisions made using these facts may lead to a competitive advantage BI results in time savings and efficiency April 18, 2007 http://www.camagazine.com/index.cfm/ci_id/26573/la_id/1/print/true.htm, viewed April 4, 2007 Stoller, J., “What you don’t know can hurt you” CMA Management, Vol. 79, 3, 2005pp.46-47 12 Management Report (Dashboard) LEGEND UNFAVORABLE FAVORABLE Company ABC Dashboard Overview 2005 Actual 2006 Actual 2007 Plan 2006 3+9F 07 Plan vs 3+9F Variance 2007 3+9 F vs 07 Plan Unfav Fav Notes: Medical Membership Total 2,232,517 1,835,021 1,982,088 1,903,708 (78,380) East Region 472,113 451,776 460,388 428,913 (31,475) West Region 717,075 767,826 763,302 751,791 (11,511) South Region 1,043,329 615,419 758,398 723,004 (35,394) Total 2,144,446 2,218,840 2,392,637 2,254,394 (138,243) East Region 834,460 878,251 966,733 909,478 (57,256) West Region 1,203,774 1,267,897 1,348,070 1,272,848 (75,222) South Region 106,213 72,692 77,834 72,069 (5,765) East Region contains lower sales due to delays in product rollout, Small Group initiatives, and Individual pricing actions. West Region driven by sales misses in all Western Region markets offset by GIC (City of Springfield) gain. Operating Revenue (000's) Gross U/W Margin (000's) East variance primarily volume driven. Volume = $58M. West Region variance driven by lower than expected insured membership. Volume =$90M. South Region decline due to business decision to retire a segment of the business model ($3.5M) 0 Total 541,512 528,913 521,816 498,021 (23,795) East Region 176,700 171,723 208,742 192,539 (16,202) West Region 258,606 284,851 235,240 233,285 (1,955) South Region 106,206 72,340 77,834 72,197 (5,637) East Region unfavorable due to volume shortfall and worsening MCR. Value shortfall in segments. PPO MCR improvement with IL HMO worsening. West Region Plan included $6.2M Cost of Care savings which are expected to be 3M in 2007. South Region unfavorable due to business decision to retire a segment of the business model ($3.5M) Operating Gain/(Loss) (000's) 55,402 34,849 57,421 36,914 (20,507) East Region Total (9,402) (24,970) 20,591 2,885 (17,706) West Region 31,149 41,199 4,193 6,411 2,219 South Region 33,655 18,621 32,637 27,617 (5,020) April 18, 2007 13 Online Analytical Processing (OLAP) February Cost Center Variances Vs. April 18, 2007 2007 Actual 620010 Advertising-Collateral Prntng 15,125 620020 Advertising-Other 620030 Advertising-Media Purchases 2,804 620040 Advertising-Branding 4,223 620050 Marketing Research 620060 Marketing-Sales Promotion 89 620065 Marketing - Sales Sponsorships 620070 Marketing-Production 620080 Marketing-Direct Response 494 620090 Advertising-PR Programs 1,000 620100 Marketing - Gifts to Clients (Inact Jan07) Advertising Expense 23,734 630010 EDP-Interest Exp Cap Lease (Inact Jan07)630011 EDP-Leased Rented HW Mainframe 630012 EDP-Leased Rented HW Open Sys 39 630020 EDP-Maintenance 630021 EDP-Maintenance HW Mainframe 630022 EDP-Maintenance SW Mainframe 630023 EDP-Maintenance HW under 1K 630024 EDP-Maintenance HW Open Sys 630025 EDP-Maintenance SW Open Sys 630030 EDP-Software 315 630031 EDP-SW Licenses Fees Mainframe 630032 EDP-SW Licenses Fees Open Sys 32 EDP Equipment Operation Exp 386 631010 EDP-Deprec Equipment 631020 EDP-Deprec Software 631021 EDP Depr Operating Systems 631025 EDP-Deprec Internally Developed Softwa 631026 EDP Depr IDS Operating Systems 631030 EDP-Deprec Open Sys Hardware 631040 EDP-Deprec Mainframe Hardware 631130 EDP-Deprec Open Sys Software 172 631140 EDP-Deprec Mainframe Software 631330 Capital Lease Depr Open Sys (Inact Jan07)631340 Capital Lease Depr Mainframe 631900 EDP Deprec Multi Phase (Plan Only) 631910 EDP Equip Retirement Offset (Inact Jan07)EDP Equipment Deprec 172 684010 Technology Refresh-PCs 2,704 684020 PC-Maintenance 684030 PC-Short Term Rental 686010 PC-Depreciation 646 PC Expense 3,350 EDP Equipment 3,908 2007 Plan 22,100 2,500 8,000 20,800 9,069 10,000 72,469 (3,459) (17,200) (20,659) 172 172 2,639 20 1,005 3,664 (16,823) 2007 Plan 6,975 2,500 5,196 16,577 8,980 (494) 9,000 48,735 (39) (3,459) (315) (17,232) (21,045) (65) 20 359 314 (20,731) 14 Challenges of Business Intelligence •Most businesses still don’t use BI strategically •Users will not automatically see the benefits of BI •Users are attached to what they already use – SPREADSHEETS •Data quality needs attention Burns, M., “Accounting for Business” CA Magazine, Vol. 136, 3, Apr 2003, pp. 37-38 April 18, 2007 15 Three Generations of Business Intelligence 1st Generation •Decision Support Systems (DSS) •Early 1970’s •Application-centric approach 2nd Generation •Late 1980’s •Data-centric approach Real-Time DataCentric ApplicationCentric 3rd Generation •Real time data warehousing Watson, Wixom, Hoffer, Anderson-Lehman & Reynolds (2006) French & Turoff (2007); Frolick & Brown (2006) April 18, 2007 16 What is a Data Warehouse? •Warehouses integrate data from various operational systems •Have become standard in most large companies •Businesses are not the only ones using data warehouses, they are also very useful for schools •Proving to be such a great advantage that businesses are willing to pay millions of dollars for them Watson, Wixom, Hoffer, Anderson-Lehman & Reynolds (2006); French & Turoff (2007) Frolick & Brown (2006) April 18, 2007 17 Real-Time BI •Before Real-Time BI, data was used to determine what had already happened. •Real time is used for current decisions. •Purpose is to increase revenue and decrease costs. •Companies who can successfully implement Real-Time BI can dramatically improve their costs. Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) April 18, 2007 18 Continental Airlines – Background •Founded in 1934 •Fifth largest airline in U.S., seventh largest in the world •Early 1990’s business problems •Go Forward plan is implemented •Went from “worst to first”, goal then becomes “first to favorite”. Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) April 18, 2007 19 Continental Airlines – Role of Information Technology •1998 an enterprise data warehouse is developed •Not real-time •Not outsourced •Warehouse created significant lift in areas of the “Go Forward Plan” •Need for real-time became apparent •Warehouse team prepared for move Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) April 18, 2007 20 Continental Airlines – How Real-Time BI Helped Five Categories of Improvement •Revenue and management •Customer relationship and marketing •Crew operations and payroll •Security and fraud •Flight operations Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) April 18, 2007 21 Continental Airlines – Flight Management Dashboard •Example of how Continental used Real-Time BI to improve their business •Set of interactive graphical displays -Quickly identify issues so that customer satisfaction and airline profitability can be improved Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) April 18, 2007 22 Continental Airlines – Ex: Logistics of the Flight Management Dashboard •Graphical depiction of a concourse •Assesses where high value customers are or soon will be in a particular airport hub •Indicates where there may be potential gate problems •Airport employees able to assist high value customers so that they and their luggage avoid missing flights. Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) April 18, 2007 23 April 18, 2007 Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) 24 Continental Airlines – More Examples of Improvement •Operations department able to keep flight arrivals and departures on time •Shows the traffic volume between the 3 continental hub stations •Operations can anticipate where services need be expected •All elements can be broken down to show more detail Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) April 18, 2007 25 April 18, 2007 Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) 26 Continental Airlines – Learnings & Take Aways •Clear technical, business, and process changes must be put into place to enable Real-Time BI •Find a clear business need for decisions that require real-time data •Invest in an architecture that can scale and automate as much of the environment as possible •Perform a value assessment to support the investment in Real-Time BI “applications that can leverage real-time B.I. by impacting business process to create value to an organization will represent the third generation of decision support” April 18, 2007 Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) 27 Continental Airlines – Linkage to Best Practices 1.) Pinpoint the organization’s key factors to focus on using Business Intelligence “Go Forward” Plan and then eventually the “First to Favorite” plan. The Five Categories: -revenue management and accounting -customer relationship management -crew operations and payroll -security and fraud -flight operations 2.) Find the various data resources from which information will be extracted 3.) Extract, Load, & Transfer Data (ELT) Data warehouse 4.) Choose a method for reporting Flight Management Dashboard 5.) Establish reporting that will be considered standard across the organization Flight Management Dashboard 6.) Arrange for deployment across the organization 1998 enterprise data warehouse created for all employees April 18, 2007 Watson, Wixom, Hoffer, Anderson-Lehman, and Reynolds (2006) 28 Tyneside NHS Trust– Overview •Established in 1993 •Provides community and hospital services •Region of South Tyneside which is in northeastern England and surrounding areas April 18, 2007 http://www.sthct.nhs.uk/ 29 Tyneside NHS Trust– Key Corporate Facts •Staff of 2,500 employees spread among five sites •19 IT staff •13 dedicated to IT •6 dedicated to information •All staff now have access to e-mail •1900 PC’s available throughout the Trust •The Trust has a modern high speed network capable of supporting the latest technology such as Radiology Digital Images. Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 58 http://www.sthct.nhs.uk/TrustReports/boardvisits06/Information%20Services%20jan%2006.pd April 18, 2007 30 Tyneside NHS Trust– Total Revenue Vs. IT Budget •Total Revenues for 2006 were £ 90,094,000 ($176,689,546 USD) (annual report & summary financial statement 2005-2006, page 22) •IT Capital budget for 2006 was £ 530,000 ($1,039,419 USD) •Dedicated to new information technology •Pharmacy computer system •Purchase of additional pacs equipment •Physiotherapy/occupational therapy coridor. (in conjunction with the king’s fund) (annual report & summary financial statement 2005-2006, page 23) •IT Capital budget as a percent of total revenue is 0.59% April 18, 2007 http://www.sthct.nhs.uk/largedocs/STFT05-06.pdf 31 Tyneside NHS Trust– Business Intelligence Rationalization •Healthcare information can literally be a case of life or death if treated improperly •Performance Management has become a key issue for National Health Service (NHS) •British government introduced the idea of foundation hospitals as part of a “payment by result” scheme •Best performing trusts receive a three-star status and can then aspire to achieve foundation hospital status and greater autonomy •South Tyneside Healthcare NHS Trust still relied on spreadsheets to collect data = time consuming and mistakes easily made April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 58 32 Tyneside NHS Trust– Business Intelligence Rationalization Tyneside had a need to: •Ensure an accurate, real-time view of activity within the hospital •Provide up-to-date patient records 24/7 -includes critical information, such as all drugs prescribed to the patient at the hospital. •Combine patients’ hospital records with their GP records • Supply the number of babies born in the hospital •Feed accurate information to the Key Performance Indicators set out as a measure of success by the government April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 59 33 Tyneside NHS Trust– Business Intelligence Implementation •Tyneside wanted a single, unquestionable method of producing all of the data its management needs in order to ensure the best possible service for all of its patients. •South Tyneside Healthcare NHS Trust decided to invest in business intelligence (BI) tools to provide a clearer view of its performance and to help with complex amounts of data that it gathers and holds. April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 58 34 Tyneside NHS Trust– Benefit of Business Intelligence Implementation •Implemented a real time analysis of key patient data •South Tyneside Healthcare NHS Trust can now obtain a comprehensive overview of performance of its crucial departments •Trust managers receive an instant warning message on their desktops if departments are under-performing •Gives them the ability to know to contact hospital consultants for immediate action April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 58 35 Tyneside NHS Trust– Executive Impressions “Healthcare intelligence is not simply about managing medical records and patients address, but also measuring performance quality and reviewing essential business function. It allows managers and consultants to ensure that each and every patient has accurate records and receive follow-up treatment when necessary.” -Martin Alexander, Head of Information Service, South Tynside Healthcare NHS Trust “It is this breadth of access to management information, and the resulting ability to change information into knowledge that supports the decision-making process, that is so impressive. Cognos Metrics Manager gives us the corporate view of our operations, while Power Play and Impromptu provide direct drill through to operational data that managers need to deliver effective service.” -Mike Robson, Executive Director of Corporate Governance, South Tyneside Healthcare NHS Trust April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 59-60 36 Tyneside NHS Trust– Plan for the Future of Business Intelligence •Meet technological challenges •National Information Management •Technology Strategy “Information for Health” •Implementation of Electronic Patient Record •Implementation of electronic appointment booking •Tyneside with Bide Time •Create NHS Cognos user groups •Enable user groups to share their information centrally http://www.sthct.nhs.uk/aboutSTHCT/about_sthct.htm Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 61 April 18, 2007 37 Tyneside NHS Trust– Key Learning Points •Organizations are still attempting to manage increasingly complex businesses and service •Historically, systems keep vital data in information silos •In the worst cases, bits of data •held in different formats •by different people •on incompatible software •So whenever any cross-over between the data sets is sought, it becomes a major and costly exercise to carry out. •There is a need to centralize data and make available to all users •A growing trend towards the sort of “sweeping up” data •If it is to be successful needs to be about far more than feeding all the data into one system April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 61-62 38 Tyneside NHS Trust– Key Learning Points Success Depends On •Process •System •Discipline •Management understanding •Importance of Data •Data Integrity •Data Maintenance April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 61-62 39 Tyneside NHS Trust– Key Learning Points Tyneside adopted technical features •Central web-enabled database •Good reporting capabilities •Ability to interface with other packages Two caveats •Case study written from the technological side -Perhaps a red flag for the future: however good the technology, without equal emphasis on and investment in the underlying systems and processes, there is a very real chance of long-term failure •Too many eggs are being placed in one basket -By pulling so much information together, the organization seem to be crossing information that is literally ‘life and death’, with the more mundane – car parking statistics for the hospital car park, possibly. April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 61-62 40 Tyneside NHS Trust– Linkage to Best Practices Pinpoint the organization’s key factors to focus on using Business Intelligence Single, unquestionable method of producing data management needs to service customers 2.) Find the various data resources from which information will be extracted Activity database, patient records database 3.) Extract, Load, & Transfer Data (ELT) Realized that success depends on data integrity and data maintenance 4.) Choose a method for reporting Accurate real-time analysis generated from one system 5.) Establish reporting that will be considered standard across the organization Dashboard and Management reporting implemented for better manager awareness and efficiency 6.) Arrange for deployment across the organization Adopted a central web-based system that users across the organization can access 1.) April 18, 2007 Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P.58-62 41 Business Intelligence - Conclusion OLTP – Online Transaction Processing OLAP – Online Analytical Processing “In sum, BI is an enterprise-wide strategy that supports reporting, analysis and decision making on multiple levels. It supports organization-wide analysis, which in turn leads to insight, action, and the proper measurement of results.” April 18, 2007 Abukari, K. and Job, V., “Business Intelligence In Action” CMA Management, Vol. 77,1, Mar 2003, pp. 15 http://www.obs3.com/why_olap.shtml, viewed March 29, 2007 42 References – Peer Reviewed •Abukari, K. and Job, V., “Business Intelligence In Action” CMA Management, Vol. 77,1, Mar 2003, pp. 15 •Brown, Justine (2006). Too Much Information. T H E Journal,33, 40-46. •Burns, M., “Accounting for Business” CA Magazine, Vol. 136, 3, Apr 2003, pp. 3738 •Di Bernardo, L., “The 2003 Information Management Project Awards” Database Marketing & Customer Strategy Management Vol. 12, 1, P. 58-62 •French, Simon & Turoff, Murray (2007). Decision Support Systems. Communications of the ACM,3, 39-40. •Frolick, Mark N & Brown, Carol V (2006). From the Editors. Information Systems Management,23, 5-6. •Jukie, Nenad (2006). Modeling Strategies and Alternatives for Data Warehousing Projects. Communications of the ACM, 49, 83-88. Stoller, J., “What you don’t know can hurt you” CMA Management, Vol. 79, 3, 2005pp.46-47 •Watson, Hugh; Wixom, Barbara; Hoffer, Jeffery; Anderson-Lehman, Ron & Reynolds, Ann Marie (2006). Real-Time Business Intelligence: Best practices at Continental Airlines. Information Systems Management, 23, 7-18. •http://www.camagazine.com/index.cfm/ci_id/26573/la_id/1/print/true.htm, viewed April 4, 2007 April 18, 2007 43 References – Other •Guptill, B., “User Executives Raise Business Intelligence Prioritization” Saugatuck Technology, January 2006, pp. 1-2 •http://www.networkworld.com/news/2007/011207-business-intelligence.html, viewed April 6, 2007 •InformationWeek Research business intelligence survey of 230 business technology professionals, March 2006 •http://www.businessintelligence.com/print_news.asp?id=2171, viewed April 6, 2007 •http://www.obs3.com/why_olap.shtml, viewed March 29, 2007 •http://www.sthct.nhs.uk/ •http://www.sthct.nhs.uk/TrustReports/boardvisits06/Information%20Services%20jan %2006.pd •http://www.sthct.nhs.uk/largedocs/STFT05-06.pdf •http://www.sthct.nhs.uk/aboutSTHCT/about_sthct.htm •http://www.financetech.com/showArticle.jhtml?articleID=181501564, viewed April 6, 2007 April 18, 2007 44