As many SAP companies seek to consolidate multiple BI solutions across their entire landscape or replace legacy BI systems with tightly integrated solutions such as SAP BusinessObjects, project managers should be aware of the overall BI landscape and effective approaches for tailoring their own BI initiatives. In this interview, Ferguson shares his thoughts on the common drivers for BI initiatives and offers several keys to success for BI projects.

BI: A Hot Topic

BI initiatives remain popular despite the economic downturn, for several reasons. The primary driver, Ferguson says, is that more companies are looking inward for ways to improve the performance of their bottom lines.

“Over the past three years, the market for BI solutions has undergone a major transformation. What used to be a tool for just some business users in an organization is now a must-have for all departments to stay focused on the bottom line,” says Ferguson.  “We’ve also seen an increase in the number of companies looking to deploy a BI solution as well as in companies looking to consolidate duplicated information.”  

Other drivers for increased BI adoption include:

Increased funding for public sector and healthcare BI projects

The federal stimulus package includes several provisions aimed at boosting the effectiveness of public sector IT systems and in the healthcare industry. The availability of funding has spurred a number of new BI initiatives in these areas.

Retail and other industries looking to counteract drops in sales

The recession has driven down sales at many major retail chains, which must now find ways to boost revenue or cut costs. At some companies, that may mean adding new products or removing underperforming ones ? decisions that require fast, accurate data for proper decision making.

Many companies have reduced operating expenses

In good times, an ERP upgrade or consolidation might be the solution for streamlining day-to-day operations. These days, many companies are turning to BI solutions to give them the answers they need.

“Even building a data warehouse is a big undertaking,” says Ferguson. “When you get into solutions like SAP BusinessObjects, you have the ability to take data from disparate data marts and data sets, load them into a universe, and get access and insight into the information without a consolidated data warehouse.”

Companies are struggling with inconsistent internal reporting

One of the key issues for companies that have existing BI solutions in place is a lack of consistency among different divisions of the company. For example, revenue reports from financial groups may not match similar reports from retail groups because of differences in how figures are calculated.

“In a lot of cases, the metrics and KPIs are inconsistent,” says Ferguson. “Executives need to make decisions based on facts, and when departments produce their numbers, they may not be able to articulate why some numbers are different from others.”

Keys to a Successful BI Project

While every BI project is different, depending on your company’s needs and the solution you have selected, there are several areas companies should focus on when preparing a BI implementation, according to Ferguson . He shares several keys for guiding a BI project from start to finish.

Define a Business Case

The first critical step in your BI project is to identify an area of the business that is struggling. This could be the finance group, HR, sales, retail stores or any other area that is struggling due a lack of accurate insight into the company’s performance. Project managers should approach those departments to discuss how the lack of business intelligence is hurting those parts of the business in order to build a business case for a BI project.

“It could be that the specific division or organization does not have access to information to measure performance, or that they have access to the information but don’t have consolidated performance key figures defined, or that they don’t have the information and have not defined KPI’s to measure overall success,” says Ferguson. “You have to work hand-in-hand with the area to pinpoint why they’re experiencing problems.”

Once you have identified a target area, you can build a business case for implementing a BI solution in that area. As with any business case, it is important to focus on the usefulness of the project to the business as a whole.

Secure Executive Sponsorship

As part of the process of defining a business case, it is imperative to secure executive sponsorship of the BI initiative. At a minimum, the executive in charge of the area that has been identified in the business case has to be on board with the project.

“For a solution such as this, you need executive-level sponsorship in order to be successful. Some implementations might find initial funding without it, but in the long run those implementations won’t be able to grow and mature the solution without that level of sponsorship,” says Ferguson. “My approach is to look at it from an operations perspective. As executives look to shift operations priorities based on changing market trends, what better way to deliver a consistent message from the executive level down to the analysts than to deliver a consolidated reporting solution that provides front-line analysts with canned reports, superusers and management with the ability to create their own reports to mine for anomalies or opportunities, and executives with dashboards to measure how the organization is performing in association with the defined operating priorities?”

While a BI project can get off the ground with one good executive sponsor, a full-scale BI initiative requires the support of several influential people within the organization. Eventually, the initiative will need input from various parts of the organization to define overall priorities.

“One key to success, from a holistic perspective, is that organizations need to define a steering committee with key representation from various operating entities across the organization. That steering committee should define overall operating priorities for business cases. If you have business cases from finance, HR, and the retail stores, the steering committee should work together to define which of those business cases will yield the best return,” he says.

Define Success

Whether the BI project is aimed at boosting revenues or cutting costs, measuring the success of the project is important to the ongoing health of your company’s BI initiatives. The first step is to determine how your organization defines success.

For example, if your goal is to consolidate multiple BI solutions to a single BI platform, you can measure success by your ability to repurpose hardware, software, and licenses from legacy solutions. Once established on a consolidated BI system, you can measure success in terms of deliverables, KPIs, financial metrics such as revenues or cost savings, or other standards.

Collaboration is King

While the initial project can thrive with the support of just one executive sponsor, collaboration across the organization is key for the long-term success of your BI project. Project managers should make it a priority to build a network of collaborators that will sustain the project.

“There has to be 100% collaboration. One of my recommendations is to put together a collaborative process, including iterative reviews with executives and meetings with business analysts and super users involved in the business case. Instead of sending emails back and forth, you have to put them all in the same room and let them work on the solution together,” says Ferguson.

Creating an ongoing collaboration is especially important considering the wide range of areas touched by a comprehensive BI solution. One of the drivers of a BI solution is to enforce consistency of metrics and KPIs across the company, so it is essential to define requirements based on a common understanding of the company’s needs.

“When you’re referring to metrics such as net sales and net revenue, are those the same as gross sales and gross revenue? If not, you must be sure that the master data associated with the metrics clearly articulate the difference,” says Ferguson.

Create a Technical Roadmap

Once you have a business case and executive sponsorship, you should define an overall strategy roadmap for your BI solution. The roadmap should map out the next two to three years of the BI solution and describe how it will be integrated into various areas within the company. This is a necessary step toward fulfilling the potential of any BI solution, according to Ferguson.

“The technical roadmap is not to say what you’re going to deliver in two to three years. It’s a roadmap of where you see the solution evolving and maturing as you add additional functionality to it,” he says. “You’re never going to reach the end of the roadmap, because it will be constantly changing, but having a roadmap in place will help drive day-to-day decisions on your BI solution.”

Offer Incremental Deliverables

While the overarching aims of a BI initiative are typically comprehensive, Ferguson cautions against rolling out too much functionality too soon. The best approach is to target specific needs within your company and roll out functionality in quick succession. At many SAP companies, this process is similar to the phased-in approach to global rollouts.

“The big bang approach just doesn’t work for BI. You need to provide deliverables every three to four months at the latest,” says Ferguson. “Once you have an executive sponsor, and have defined a business case and your overall roadmap, you then define incremental deliverables in alignment with the roadmap. I typically look to deliver a solution every two or three months, whether it’s a minor enhancement or a major release,” says Ferguson.

A phased-in rollout of BI functionality offers several benefits. Not only does it boost the visibility of the BI initiative, but encourages buy-in from other areas of the business.

“Once you deliver the first few successful solutions, you’ll see a snowball effect from others within the organization that will want to jump on the BI bandwagon,” says Ferguson.

Consider BI Holistically

While the best approach is to craft a BI solution around a particular issue in your company, you have to be careful to keep the big picture in mind. Especially if the project’s initial sponsor is affiliated with a specific group within the company, a BI project runs the risk of becoming dominated by the needs of that group.

It is important in these situations to ensure that you have other areas of the business involved in the early stages. Because many of the metrics and data are shared among multiple groups within the organization, it is important to bear in mind the effect of BI solutions on the entire organization.

“If your initial sponsor is focused on finance, you want to deliver on their requirements, but you have to look at it holistically. There are a number of facts, areas, dimensions, and metrics that are used not only by finance but other groups as well,” says Ferguson.

Make a Decision Tree

Most BI solutions include several different tools for reporting and analytics. For example, SAP BusinessObjects offers applications such as Xcelsius, Crystal Reports, SAP BusinessObjects Web Intelligence and others that have the ability to perform overlapping functions. To determine which tools to use for which jobs ? and to keep those decisions consistent internally ? Ferguson recommends creating a decision tree for evaluating different tasks.

“If you get a request for a report that’s for a few front-line analysts, the decision tree will walk you through the decision process to determine the best solution to deploy ? whether it’s Crystal Reports, BEx, Xcelsius, or another tool,” says Ferguson. “The decision tree will help the technical analysts or business analyst make the best decision on which report to deliver.”

Measure the Success of Your BI Initiative

As with any company-wide initiative, it is critical to track the success of your BI project. Ferguson recommends several ways to do this.

Because BI functionality should be rolled out in sequence and not all at once, Ferguson stresses the importance of speed when delivering new functionality or enhancements. Time to market is a critical metric for measuring the success of your BI project for several reasons.

“Time to market is about adaptability. In a most cases, companies tend to find the IT group to be very rigid and structured with the documentation process, and time to market tends to be lengthy. For organizations that are looking to shift operating priorities at the drop of a dime, the IT groups needs to be agile enough to deliver and adjust priorities and deliver a solution rapidly,” he says.

The speed at which the BI solution delivers on the company’s operations priorities is another critical factor. Executives want to know how the BI solution is helping the company shift its priorities, so you should be prepared to demonstrate those successes by month, quarter, year, or other standards.

Finally, you should be prepared to track the BI solution’s impact on the bottom line ? whether it increases revenues or helps in other areas, such as improved margins due to savings accrued by dropping maintenance payments on legacy solutions, repurposing hardware for other uses, and reducing the headcount needed to support older solutions.

Davin Wilfrid

Davin Wilfrid was a writer and editor for SAPinsider and SAP Experts. He contributed case studies and research projects aimed at helping the SAP ecosystem get the most out of their existing technology investments.

If you have comments about this article or publication, or would like to submit an article idea, please contact the editor.