Business Intelligence Best Practices -Sap

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    By the end of this year, worldwide investments in business intell igence (BI ) will exceed$16 bil lion.The promises of these investments are manifold. In theory , more timely andeffective decision-making should t ranslate into more competi tive strategies, greatermarket share, improved customer satisfaction, more productive employees, better controland oversight, and more accurate planning, budgets, and forecasts.The real-world resultsoften fall short.

    There are a number of misconceptions and factors that stifle the payoff of a BIinit iative. Among the worst offenders, or worst practices, are the following:

    BI is just a data warehouse. A data warehouse offers structured business infor-mation . In and of itself, it does not offer business intelligence . I t i s only one of manycriti cal building blocks. Equating a data warehouse with business intelligence beli esthe very reason you implement BI solut ions in the fi rst place, which is not only tostructure, store, and access information, but to interpret and actually act upon it forthe types of benefi ts I just cited.True BI scenarios incorporate much more than a datawarehouse and a slick UI .They work in lockstep with business process management,collaboration tools, and business applications.Tying analytics back into action thats what BI is all about.

    Good reports = Good BI . Many who design and implement BI strategies are lul ledinto a false sense of securit y, believing that good reports are indicative of good BI.Building and delivering good reports is only one facet of BI ; it is by no means acomplete picture. Dashboards, alerts, balanced scorecards, and KPI s are also highlyeffective means for communicating business insights, and are means that are becomingmore popular given the trend toward exception-based reporting.

    BI ends when the report hits the executives inbox. If you want to gauge theefficacy of your BI activities, take a look at what happens once a report reaches

    your CEO or your LOB executives. I see it time and time again. An important issuewarrants executive review and the CEO asks for a report.The report i s run (or insome cases, created at great expense) and sent via email to the CEOs inbox.Theinbox offers no inherent support for collaboration among key stakeholders, no contextupon which to draw meaningful conclusions, and no simulat ion or modeling capabil i-ti es in summary, no actionable intelligence. And most glaring of all i s the lack oftie-in to processes and applications. BI should be a catalyst for business transforma-tion, an enabler of smart business.That CEO should be empowered to make better andsmarter decisions (ul timately affecting the bottom line of the organization), and toquickly initiate process changes where recognized to be advantageous.

    SAPs Peter Graf on

    Business I ntelligence Best(and Worst! ) Practices

    SAP insider S-1

    Peter GrafSenior Vice President,

    SAP CollaborativeSolutions Product

    M arketing

    InsideTrack, Understand, and ManageYour Enterprise Performance:Integrated Business IntelligenceSolutions from Business Objects

    Extending the Value of YourInvestment in SAP BW:Do All Your Users HaveAccess to SAP BW Data?

    The Role of Data Integration:How Informatica and SAP BISupport Data I ntegration forData Warehousing, BusinessIntelligence, and Beyond

    Business Intelligence andInformation LifecycleManagement Do YouHave to Choose?

    SAS Gives You The Powerto Know

    Monitor, Report, and AnalyzeYour SAP Business IntelligenceData Across the Whole

    Enterprise

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    Continued on page S-2

    This article appeared in the Jan Feb Mar 2005 issue of SAP Insider and appears here withpermission from the publisher, Wellesley Information Services (WIS), www.WISpubs.com .

    Subscribe today. Visit www.SAPinsider.com.

    SAP insider Special Feature: SAP Business Intelligence

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    SAP insider Special Feature: SAP Business Intelligence

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    One size report fits all. We all understand thatinterest in a specific type of data say, sales figures doesnt mean a one-size-fi ts-all report i s appropriate. Amarketing manager may want to review sales figures bypromotional campaigns, a sales manager by sales rep andproduct, and a purchasing manager may want t o focus ontrends over time in order to avoid out-of-stock situations.And yet, many companies resign themselves to having adata warehouse administrator run a report and having theusers decipher it on their own. Or worse, the administrator(without the relevant business understanding) runsnumerous report s tailored to what he or she perceives arethe needs of the audience. Inflexible, impersonal BI suchas this forces users to make compromises and hinders thequality of insights to be gained.

    Six different tools (and six different answers!).With the advent of Sarbanes-Oxley, acute concernsabout timeliness, accuracy, and consistency reach wellbeyond the IT department. Internal controls and trust-worthiness of financial figures are key concerns for everyCEO and CFO who has to attest to a financial statement.Compliance can be difficult or easy to obtain, dependingon the route you take. Isolated data warehouse implemen-tations take you down a difficult and expensive path tocompliance. And it s a path marred by risk. You extractinformation from a data warehouse, manipulate it withexternal tools, and then return the revised data to thesystem.There is no single version of the truth, and datamodifications cannot be traced or audited.

    To get the best, buy best-of-breed applications andtools. One of the myths that enabled best-of-breed envi-ronments to take hold in the 1990s was the notion thatthey offered flexibili ty. I t didnt take long for both thebusiness and IT sides of the house to discover the fallacy

    of this claim. It s hard (if not impossible) for a businessgroup or executive to get to one version of the truthwhen different organizations take a different approach toBI . Moreover, manual integration of multi ple productsexponentially compounds IT overhead and expense.Modifications, software patches, updates, upgrades, andintegration exercises basically, day-to-day dealings forevery IT department wreak havoc on a so-called best-of-breed BI landscape. Vendors dont coordinate therelease schedules with one another.They all issue updates

    at will, leaving IT organizations to administer change toone system, then revisit every other system that i s impactedby that change. A single, integrated, and robust technologyplatform from a proven vendor, not a best of breed, is actu-

    ally the key to flexibility.

    Analytical and transactional applications: differentstrokes for different folks. Many BI initiativesoperate in i solation.They offer reports, but are eithernot able or were not configured to track, measure, andrefine operational execution. But the very premise of busi-ness intelligence is to assemble data for analysis thatguides subsequent act ions! I t is absolutely essenti al thatthe BI solut ions interact with operational systems, offermonitoring and feedback mechanisms, provide timely (or

    preferably real-time) alerts, and align business insightswith corrective actions and process improvements.

    The 7 Best BI Best PracticesThe seven best practi ces to emerge in the BI arena aresummarized in Figure 1 on page S-14. At the core of everyone of these best practices is an acute requirement for acommon, open, and unified technology platform. In thisregard, SAP customers are ideally situated because SAPNetWeaver is precisely that.

    Harnessing the benefits of BI requires broad-reachingtechnical capabili ti es along a number of fronts.You obviouslyneed extraction, transformation, and loading (ETL) capabili -ti es, integration brokers, and data-modeling tools.You need aportal to enable access to information and analytic applica-tions. Securit y is certainly a huge factor for every IT organi-zation these days. And cutting across all facets of a BIendeavor is the need for integration with business processesand appli cations.These capabili ties are all integral to theSAP NetWeaver platform.

    When these technical assets are at your disposal, BI cantake flight. You can use business process management inconjunction with analytics.You can wield the portal for broad-based delivery of content, be it reports, alerts, or KPIs.Youcan tap into collaboration tools so that people can discuss thecontents of a report , reevaluate findings, and question conclu-sions.You can readily tie analyti cs back into transactions. Andyou can create processes around analyt ics, for example, viaad hoc workflow definitions and guided procedures.

    Continued on page S-14

    Continued from page S-1

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    Gain visibility into your business and leverage all your enterprise data.Reduce costs while increasingproductivity and minimizing demandson IT. Pinpoint your most profitablecustomers and improve your overallfinancial performance. And ult imately