Business Intelligence, can't be that hard to understand, it is just dimensions made up from tables from the OLTP, legacy, or external systems. Utilising Data Warehouse, Data Marts and Business Intelligence Tools to generate reports. How hard can that be?
Let me start with a simple story. Some say that this story originated from China and is a Chinese proverb, others say it is from India and is a folklore. The only difference between whether it is from China or India are the number of participants in the story. I will be using the story from China who has 3 blind men instead of 6, but the context which I will apply to dimensional modeling can be applied with this story.
There were in time, 3 blind men. Each of them were blind from birth and they have never seen, heard or touch an elephant. They have always want to know more about this animal as many stories that they had heard paints the picture of a beautiful, strong and large animal. Some cultures uses this animal to move large objects, some are trained as entertainers, and in some cultures, they are worshiped.
Hearing some of the stories relating to the elephant, the 3 blind men decided that they will need to encounter this animal to validate for themselves the stories that they had heard. Their opportunity came when a circus visited their town. The circus has amongst their entertainers, elephants! So the 3 blind men asked permission to touch the elephant since they are unable to see the elephant.
The day came when the 3 blind men were taken to visit the elephant. The elephant trainer after breifing the 3 blind men, asked all of them to sit whilst he leads each of the men to touch the elephant. Since the 3 blind men want to know the entire animal, the trainer lead each of the men to respective parts of the elephant.
The First Blind Man was led to the elephant legs. The Second Blind Man was led to the tail of the elephnat and finally the Third Blind Man was led to the trunk of the elephant. The excitement was overwelming and they wanted to compare notes to see if all of them fully appreciated how facinating the animal was during their visit.
The First Blind Man stated by saying how he felt that the elephant were like trees, they are firm and round, almost like hugging a tree. The Second Blind Man said that it is really thin with hairs at the end. Seem to be moving a lot and is good to chase flies and finally the Third Blind Man said that it is like a snake, long and bends.
Each of the 3 blind men, described the elephant as to how they had experienced the animal that day. What they did not realised is that each of them had a section of the animal which they understood. However they do not realise that they only had a small view point of the "bigger picture".
This story is so similar to Businesses where feudal system is common in the work place, when most departments have been set with KPI by management to ensure that the department is profitable and efficient, the department heads are only are concerned about their own departments and the sharing of information between departments are not practiced. Terms like lean manufacturing to encourage less wastage is just such an example for the manufacturing department to exercise control and this will be part of the KPI of the organization.
What has the blind men and the elephant and the business world have in common? All have a "snap shot" of their department, and in the story, a section of the animal. If only there was a better way to show the entirety of the organization including sections of the business is that not only related to the department. Understanding the entire business will assist decision makers to make better decisions. If the decision maker were to only concentrate on ONE department, then chances are that this decision could adversely affect the other departments.
Norton and Kaplan in the 90s create the balanced scorecard approach. This approach focuses on 4 perspectives, financial, customer, internal business, and innovation, learning and growth based on the organizational strategy and vision. This approach does not highlight a single department but allow the decision maker to ensure that any decision made needs to be inline firstly with the organization strategy and vision. Next the decision maker will see that their decision could impact other departments using this approach. This approach is therefore useful to organization that would like to ensure that decision made are not based solely for a department but for the organization.
Business Intelligence are tools that organisation can utilise to understand their business. Providing that the systems are built and users uses the system, the Busienss Intelligence tools should be able to paint a better picture for decision makers. There are many vendors and many products, however the key is not the vendors or the products but the understanding of what is required by the organisation based on their strategy and vision. Executives will change over time and so will their requirements. It is key that Business Intelligence Tools continue to evolve and have iterative updates. So with the evolutionary approach along with a full understanding of the organisational strategy and vision, this will ensure that Business Intelligence Tools continues to be a useful tool for decision making.
Tuesday, November 3, 2009
Thursday, September 17, 2009
Business Intelligence and the SME Company Part Two
Part 2 – Case Study
The reports that management were receiving were from their accounting software, their operational system. The organisation had 6 other databases. Management believed that each of the 6 databases were giving them the same information and that the information is within the boundaries of tolerance, IE the reports can be trusted. This organisation is in manufacturing and is a SME.
When we were engaged to implement BI tools to assist management with “new” reports (they were not called BI tools then), management was much attached to their current reports and how they “look and feel”. This was hard to “win” managers over to the new reports as they want their old reports (how they look and feel, even the font and where information are needs to be exact) back using the new system.
One of the first projects was to centralise all the data from the 6 different databases. The project team needed to make sure that the data in each of the databases were centralised and not redundant. It became very evident that the data were not related and each department who owns their own database were inputting data from their own department and the information is not shared with the other departments. Another huddle that arises is that the data in the respective databases did not match that in the accounting package (at that time they did not have an ERP system). This created some delays for the project team. We needed to ensure which data is the “true” data. Since we have the issue of management wanting their own look and feel and further to that, they were the gate keeper of their own data, the project team realised that when the databases are centralised, users may not readily trust the new reports because we now have a “one version of the truth”. We are no longer using their data but that of the ERP system (which is also being installed).
The project did have a very strong sponsor and with his help, a change manager position was created. We then had to “wash” the data and this project becomes a relatively large data cleaning project. A lot of the figures that have been used in the respective databases were inputted over 3 years ago and most of them are now out of date. Figures like cost per item and unit of measures had changed a few times over the past 3 years. The realisation of this error in effect created an unfavourable variance of approximately $250,000. Most of this was stock related and the company had to take a hit for this error as it is now realised (in accounting terminology).
The new BI tools when they was finally implemented, was rolled out in stages. The reason behind this was to gain the trust of the users of the tool. Since the project ended up to be more like a discovery type project, the existing reports could not be used as the “controlled” reports to check for accuracy. There were discussions that the new reports are not correct but it was difficult to quantify this. For this reason, the roll out of the project happened in stages.
The first BI tool was a stock levels report which is a dashboard look and feel. The inventory manager could analyse their stock levels on a daily basis and make the necessary judgement call to order additional stock or not. This could only occur when the inventory manager had just finalised her stock take and the figures have been entered into the ERP system. This was a quick win for the project as we could use the stock levels report from the transactional system as a control report. Once this was signed off the next was the manufacturing station reports. Each of the manufacturing station had their own task to perform based on their respective work sheet. A lot of the work station operators did not follow the manufacturing flow process. These stations did bulk process work instead and the outcome was an oversupply of particular parts that might not be use. The initial reasoning is that the setup time required to reset each station is approximately 30 minutes.
Once the systems were running it was easier to monitor and see what the “truth” really is. The BI Tools provided the organisation an immediate ROI as they were able to reduce wastage and over creating items that would not otherwise be used during their manufacturing process. Their holding area were reduced as the systems were also able to calculate reasonable the time taken to manufacture the product from end to end providing their customers with up to date time schedule when their product will be ready for shipment or had been shipped.
To determine where costs can be reduced, the organisation will need to know and be informed of their operational and business divisions. The GFC has created opportunities for Business Intelligence (BI) vendors and consultants to assist companies in the design and implementation of Business Intelligence Tools which may assist the companies make better decisions. The cost to implement such a BI tool might not be significant. However to the organisation the perception of such costs might be significant as the users who would be using the system will be limited to decision makers. The success of any implementation is a team that can map the implementation journey well and a sponsor who will work alongside the project team.
The reports that management were receiving were from their accounting software, their operational system. The organisation had 6 other databases. Management believed that each of the 6 databases were giving them the same information and that the information is within the boundaries of tolerance, IE the reports can be trusted. This organisation is in manufacturing and is a SME.
When we were engaged to implement BI tools to assist management with “new” reports (they were not called BI tools then), management was much attached to their current reports and how they “look and feel”. This was hard to “win” managers over to the new reports as they want their old reports (how they look and feel, even the font and where information are needs to be exact) back using the new system.
One of the first projects was to centralise all the data from the 6 different databases. The project team needed to make sure that the data in each of the databases were centralised and not redundant. It became very evident that the data were not related and each department who owns their own database were inputting data from their own department and the information is not shared with the other departments. Another huddle that arises is that the data in the respective databases did not match that in the accounting package (at that time they did not have an ERP system). This created some delays for the project team. We needed to ensure which data is the “true” data. Since we have the issue of management wanting their own look and feel and further to that, they were the gate keeper of their own data, the project team realised that when the databases are centralised, users may not readily trust the new reports because we now have a “one version of the truth”. We are no longer using their data but that of the ERP system (which is also being installed).
The project did have a very strong sponsor and with his help, a change manager position was created. We then had to “wash” the data and this project becomes a relatively large data cleaning project. A lot of the figures that have been used in the respective databases were inputted over 3 years ago and most of them are now out of date. Figures like cost per item and unit of measures had changed a few times over the past 3 years. The realisation of this error in effect created an unfavourable variance of approximately $250,000. Most of this was stock related and the company had to take a hit for this error as it is now realised (in accounting terminology).
The new BI tools when they was finally implemented, was rolled out in stages. The reason behind this was to gain the trust of the users of the tool. Since the project ended up to be more like a discovery type project, the existing reports could not be used as the “controlled” reports to check for accuracy. There were discussions that the new reports are not correct but it was difficult to quantify this. For this reason, the roll out of the project happened in stages.
The first BI tool was a stock levels report which is a dashboard look and feel. The inventory manager could analyse their stock levels on a daily basis and make the necessary judgement call to order additional stock or not. This could only occur when the inventory manager had just finalised her stock take and the figures have been entered into the ERP system. This was a quick win for the project as we could use the stock levels report from the transactional system as a control report. Once this was signed off the next was the manufacturing station reports. Each of the manufacturing station had their own task to perform based on their respective work sheet. A lot of the work station operators did not follow the manufacturing flow process. These stations did bulk process work instead and the outcome was an oversupply of particular parts that might not be use. The initial reasoning is that the setup time required to reset each station is approximately 30 minutes.
Once the systems were running it was easier to monitor and see what the “truth” really is. The BI Tools provided the organisation an immediate ROI as they were able to reduce wastage and over creating items that would not otherwise be used during their manufacturing process. Their holding area were reduced as the systems were also able to calculate reasonable the time taken to manufacture the product from end to end providing their customers with up to date time schedule when their product will be ready for shipment or had been shipped.
To determine where costs can be reduced, the organisation will need to know and be informed of their operational and business divisions. The GFC has created opportunities for Business Intelligence (BI) vendors and consultants to assist companies in the design and implementation of Business Intelligence Tools which may assist the companies make better decisions. The cost to implement such a BI tool might not be significant. However to the organisation the perception of such costs might be significant as the users who would be using the system will be limited to decision makers. The success of any implementation is a team that can map the implementation journey well and a sponsor who will work alongside the project team.
Business Intelligence and the SME Company Part One
Part One – Organisational requirements to make money
The current discussions regarding “Global Financial Crisis (GFC) has been going on now since mid 2007. The GFC has caused the global stock market to fall and large banks to be either taken over or collapsed when governments are not able to support or “bail” them out. Due to this GFC, many companies have had their income source either been terminated or re-negotiated by their customers / clients. The termination and re-negotiation of contracts saw many companies collapsed overnight and others are struggling to restructure their organisation such that they are able to "ride the wave" out of this GFC.
In stable market with good revenue sources, companies concentrate more on building revenue as some of them are mandated in keeping their shareholders happy. In a bear market, in this instance, the GFC, companies are striving to stay afloat by restructuring their business or businesses. Restructuring is another word for cost cutting. Each company and their management teams could have differences of opinion in how a restructure would look like. In general terms, some of the strategies that a organisation could adopted are; reducing labour, inventory, entertainment , and travelling expenses just to name a few. The key word here is reducing cost, since increasing revenue might not feasibly during the GFC, organisations are now looking at the other side of their profit and loss.
Organisations that had been focusing on revenue, some of these organisations might not have concentrated on their expenses. They have been complacent with where they are at with the organisation and believe that the expenses have been reduced as best as possible. The justification of this argument is that the percentage of expense increased is in line with the increase percentage increase of revenue. I had managed such a project in recent years (not during the GFC but the principals are the same) and until BI tools were implemented, the management of this organisation did not fully understand how much wastage was happening in their own organisation.
This will be continued as a mini case study in Part 2.
The current discussions regarding “Global Financial Crisis (GFC) has been going on now since mid 2007. The GFC has caused the global stock market to fall and large banks to be either taken over or collapsed when governments are not able to support or “bail” them out. Due to this GFC, many companies have had their income source either been terminated or re-negotiated by their customers / clients. The termination and re-negotiation of contracts saw many companies collapsed overnight and others are struggling to restructure their organisation such that they are able to "ride the wave" out of this GFC.
In stable market with good revenue sources, companies concentrate more on building revenue as some of them are mandated in keeping their shareholders happy. In a bear market, in this instance, the GFC, companies are striving to stay afloat by restructuring their business or businesses. Restructuring is another word for cost cutting. Each company and their management teams could have differences of opinion in how a restructure would look like. In general terms, some of the strategies that a organisation could adopted are; reducing labour, inventory, entertainment , and travelling expenses just to name a few. The key word here is reducing cost, since increasing revenue might not feasibly during the GFC, organisations are now looking at the other side of their profit and loss.
Organisations that had been focusing on revenue, some of these organisations might not have concentrated on their expenses. They have been complacent with where they are at with the organisation and believe that the expenses have been reduced as best as possible. The justification of this argument is that the percentage of expense increased is in line with the increase percentage increase of revenue. I had managed such a project in recent years (not during the GFC but the principals are the same) and until BI tools were implemented, the management of this organisation did not fully understand how much wastage was happening in their own organisation.
This will be continued as a mini case study in Part 2.
Wednesday, July 29, 2009
Evolutionary BI
Who invented the word evolutionary in the first place? Everything potentially is evolutionary. We evolved daily by learning new things, new smell, new food, new experiences, or even new friends. So is this any different to technology say in the Business Intelligence (BI) sphere?
I personally do not think that this is any different and like us technology will evolve whether we embrace it or not. Look at the development of super computers. Now what is that again? Well in the days not too long ago, they took up the entire floor space of a building with the processing power of a PC today. This is evolutionary. We used to installed software using floppy disks, now it is either via a CD or better via the internet, just download what you require, pay for it online and install. This is evolutionary.
So if technology is evolutionary, can we take a snap shot of a system and tell it, no more changes will be made for it, or we reject all upgrades and patches? In the business world, a non-evolutionary system is equivalent to a computer system that will not accept any upgrades or patches if the laws governing payroll tax, company or individual tax were to change.
Therefore it is rather difficult if not impossible to have a BI system built to encapsulate all future evolutionary enhancements and design that might be implemented without of course giving up on the "evolutionary" discussion. I have tried this approach, but all of my projects have a life span of "x". "x" is the variable whereby the "user" requirements will change depending on the state of nature at play.
This generally is triggered by one if not more of the following:
Consultants should build BI applications extracting as much knowledge from the users who will be using the application to try and extend the BI application life span. They must also acknowledge the fact that there is a life span or a future expiry date of the application that they had built. With time, challenges of the market, improvements of technology and methodologies, BI Applications will naturally evolve and the built BI applications could see enhancements, improvements or even a totally new BI Application.
I personally do not think that this is any different and like us technology will evolve whether we embrace it or not. Look at the development of super computers. Now what is that again? Well in the days not too long ago, they took up the entire floor space of a building with the processing power of a PC today. This is evolutionary. We used to installed software using floppy disks, now it is either via a CD or better via the internet, just download what you require, pay for it online and install. This is evolutionary.
So if technology is evolutionary, can we take a snap shot of a system and tell it, no more changes will be made for it, or we reject all upgrades and patches? In the business world, a non-evolutionary system is equivalent to a computer system that will not accept any upgrades or patches if the laws governing payroll tax, company or individual tax were to change.
Therefore it is rather difficult if not impossible to have a BI system built to encapsulate all future evolutionary enhancements and design that might be implemented without of course giving up on the "evolutionary" discussion. I have tried this approach, but all of my projects have a life span of "x". "x" is the variable whereby the "user" requirements will change depending on the state of nature at play.
This generally is triggered by one if not more of the following:
- change in DB schema - "user" wanting more "drill down" capabilities
- patch releases that will affect the DB Tables
- upgrades to the software that will affect the DB Tables
- upgrades to the software that will change the DB Table names
- merger of companies
- merger of DBs
- changes of the DB tuple to extend the field size to store more info
- changes in state laws
- changes in commonwealth laws
- changes in the "users" requirements
Consultants should build BI applications extracting as much knowledge from the users who will be using the application to try and extend the BI application life span. They must also acknowledge the fact that there is a life span or a future expiry date of the application that they had built. With time, challenges of the market, improvements of technology and methodologies, BI Applications will naturally evolve and the built BI applications could see enhancements, improvements or even a totally new BI Application.
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