This article originally appeared on the BeyeNETWORK
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
For the past few years, analyst firms and industry experts have confirmed that business intelligence initiatives rank at the top of CIO priority lists. As business intelligence initiatives gain momentum, visibility and focus within the energy industry, companies such as ExxonMobil, Royal Dutch/Shell and BP will face tremendous challenges integrating and analyzing data from global operations and diverse business units. To ensure successful outcomes when companies of this nature address BI strategic initiatives, it’s imperative to align with a simple but essential best practice to maximize investments: a phased delivery approach.
Historically and even most recently, new business intelligence initiatives that follow a “big bang,” “single waterfall” or all-encompassing approach fail because organizations attempt to deliver enterprise capabilities and functionality without a solid initial business intelligence foundation in place. Essentially, they take on more than can be delivered successfully in a single phase resulting in “over promising” and “under delivering.” Therefore, when new BI initiatives are addressed, it is imperative to begin with a modest and achievable start, envision enterprise capabilities and functionality, and evolve over time by delivering capabilities through multiple iterations or phases – ideally prioritized to meet the most pressing business need, even as those business needs change.
The benefit of this approach is that success is realized very quickly on an incremental basis. It also provides a foundation and structure that promotes leverage and economies of scale as future phases arise. And, perhaps most importantly, it builds momentum for the BI initiative and executive support as tangible business value is realized.
Figure 1: Phased Delivery Approach
For most IT managers and directors who face stringent budgets and scrutiny to approve spend, the phased delivery approach accommodates data warehousing “on a budget.” Cost reduction is an attractive benefit of starting with a very specific and well-defined scope that evolves over time. A challenge faced when defining an appropriate scope is finding the perfect opportunity that can be delivered quickly but will also provide value to the business.
Phased deliveries promote cost reduction in several ways including compressed project durations, smaller team sizes and the reduction of potential rework. The very fact that scope is limited and well defined indicates that project durations will be reduced because the efforts to deliver small, tangible results are far less than trying to accommodate all business requests or needs within a single phase of work.
Significant cost savings are also recognized because smaller initial efforts demand smaller, more focused teams. Therefore, the amount of spend on man hours and expenses required to deliver a final product are dramatically reduced.
The cost and risk associated with potential rework to resolve gaps between requirements and finished product will also be mitigated or eliminated with the phased delivery approach. This mitigation occurs because the likelihood and number of gaps identified throughout the project will be substantially less than those normally associated with an initiative that tries to accommodate all business needs within a single phase of work.
Return on Investment
Return on investment in today’s information technology world is more critical than ever. By adhering to a phased delivery approach, a business intelligence project’s return on investment can be obtained much more quickly than efforts following a “big bang” approach. Several reasons contribute to a faster return on investment when following the phased delivery approach: a reduction of required man hours, reduced times to market, and the ability to react to business demands quickly.
The number of man hours needed to produce reports or analytics will drop more quickly when using a BI solution implemented in a phased versus “big bang” approach. Because these efforts and workloads are decreased quickly with a phased implementation, the cost savings are abrupt and return on investment is recognized immediately. The phased delivery approach also reduces time to market; therefore, project durations are shorter and less costly. Because projects are shorter and less costly, the time needed to realize return on investment is also dramatically reduced. As a result of embracing the phased delivery approach, shorter project durations and reduced costs give any team the needed advantage to succeed.
Another key benefit of the phased delivery approach is that it equips a project team with the capability and capacity to meet the demands of the business in a timely manner. With this newfound capability, a business intelligence initiative can meet the speed and frequency of business demands while delivering quality solutions. Because the phased delivery approach equips the business with tools to identify cost savings and market opportunities sooner than a “big bang” project, this will likely result in cost savings and profitability that positively impacts a quick return on investment. All of the phased delivery benefits that influence return on investment complement and justify the decision to move forward with a business intelligence initiative.
The most important and biggest challenge of any business intelligence initiative is that momentum and credibility must be established quickly and then maintained within the business community and the ranks of management. The phased delivery approach facilitates this large and challenging task by delivering quality tools and capabilities quickly. This ensures that the business intelligence initiative gains momentum and builds credibility in a short period of time. By delivering results and capabilities faster, political criticism and doubts are diminished by addressing the questions and doubts that exist within management and the business community much more quickly than a project that tries to address all the requirements in one, long project. In addition, the phased delivery approach also will help to identify an evangelist for the data warehouse early on, thereby assisting the process of growing and promoting the business intelligence efforts throughout the business community.
Economies of Scale
As a business intelligence initiative grows by following a phased delivery approach, economies of scale are a direct result and tremendous benefit of starting small and evolving over time. “Economies of scale” refers to the leverage that is established as each phase of work is completed. This leverage can be defined as reusable objects, techniques, methods, control processes and common master data elements that are established as a foundation in the early phases of an initiative and can be utilized by all subsequent phases. Economies of scale and leverage can also introduce other benefits, such as reduced efforts and shorter project durations, which reduce cost and spend.
Delivery excellence and quality are tremendous benefits of starting modestly and delivering in phases. Delivery excellence and quality will be recognized when adhering to the phased delivery methodology because it promotes quick, focused build phases that permit versions of a product to be presented to the business very early in a project’s life cycle. The presentation of a working product to the business early in the project forces the identification of any gaps between requirements and design so that these issues can be resolved quickly and easily before too much time or money is invested in something that will not meet expectations. Early presentation to the business also promotes feedback in regard to capabilities and functionality of a product that may have been difficult to communicate during the initial requirement-gathering and design phases without actual data and a working product demonstration. This early communication with the business allows the team to address gaps and incorporate business feedback into the final product, helping to ensure delivery excellence and quality for each delivery phase as those iterations continue.
Avoid Data Landfills
Many times when organizations approach new business intelligence initiatives in a manner that tries to accommodate all possible business needs or questions, the end result may turn into a “data landfill” versus a healthy, efficient data warehouse. A data landfill is essentially a data warehouse that contains data and structures that are not used or needed for analytical or management reporting, but was created with the mind-set that the business may have this specific need at some point in the future.
The phased delivery approach inherently helps prevent the creation of data landfills in several ways. The most significant reason why the phased approach eliminates the possibility of data landfills is because scope is very well defined and is intended to address specific, needed and immediate business requirements. Therefore, all objects and structures created within a phased data warehouse project will be utilized in some manner for reporting or analytical needs, thereby reducing the chance that a data landfill will evolve and increasing the ability to keep the design closer to the business as needs change.
Phased Delivery in the Real World
To provide an example of the tangible benefits reaped by phased delivery, one of our global energy clients implemented an enterprise business intelligence capability by adhering to the concept of starting modestly and evolving. The trading business unit within the company had a critical business issue in need of immediate resolution. The issue originated within the back office and was primarily focused on the monthly challenges of cash flow forecasting and variance analysis. The entire process was manual and required approximately eighty man hours a month to gather, assimilate data, and make any necessary adjustments or assumptions so that this information could be delivered to management, trading personnel and the risk management team. As you can imagine, the organization needed information that was accurate and delivered quickly; however, because the existing process was cumbersome and error prone, the information need was never appropriately addressed and the delivery time was approximately fifteen days. The business unit decided to launch their business intelligence initiative by addressing this specific critical need although other demands and requests existed within other groups of the organization. Once the back office trading solution was built and delivered, it was quickly determined a success and the organization then leveraged the tools, techniques and methodologies as they began to deploy solutions for other groups within the business unit. Although the company’s initiative originated within the trading organization, it quickly penetrated the other four business units, and the original efforts put forth became the cornerstone and foundation for the entire company’s business intelligence capability.
Figure 2: Real World Example
The next time a new business intelligence opportunity presents itself, it is imperative to begin with a modest start, envision enterprise capabilities and evolve over time by delivering through multiple iterations or phases. If future business intelligence initiatives are approached with this perspective, success will be imminent regardless of how complex or challenging the proposition may be. Success will be guaranteed because quality solutions will be delivered, efforts will be on time and under budget, business demands will be satisfied and, most importantly, you will win the support of management who will become the ultimate evangelist. As the day-to-day delivery battles arise, remember to keep a laser focus on your goals and adhere to the principles and benefits of a phased delivery approach to reach them. After all, Rome wasn’t built in a day.