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1. Gartner for IT Leaders Building the BI Business Case: Getting the Sponsor on Board Unless otherwise marked for external use, the item(s) in this Gartner for IT Leaders Toolkit are for internal noncommercial use by Gartner for IT Leaders clients. The materials contained in this Toolkit may not be repackaged or resold. Gartner makes no representations or warranties as to the suitability of this Toolkit for any particular purpose, and disclaims all liabilities for any damages, whether direct, consequential, incidental or special, arising out of the use of or inability to use this material or the information provided herein. The instructions, intent and objective of this template are contained in the source document. Please refer back to that document for details. Notes accompany this presentation. Please select Notes Page view to examine the Notes text.

2. The BI Discrepancy Assumptions: • BI is not seen as an organization-wide initiative and is synonymous with reporting • Executives do not understand BI • End users cannot articulate their requirements • Nobody is responsible for the BI program • For three years in a row, BI has been quoted as the No. 1 technology domain for the CIO*vs. • Random surveys among Gartner clients indicate that only 2% actually have a BI strategy *Source: Gartner EXP Surveys, 2005-2007

3. Objectives • Increased Awareness of Information and Funding Silos • Funding usually governs how a BI solution is ultimately built. Control of the budget frequently creates bias in every aspect of final design • Overcome Skepticism to Resume Funding • The creation of silos leaves the impression that BI at the enterprise level is difficult, if not impossible. What is different now?

4. Benefits: New revenue streams Enhance revenue channel Alleviate cost pressure Invigorate partner relationships: Enhanced SCM management Help partners eliminate cost/waste Vendor-managed inventory Soft costs: Enhance decision process Reduce IT hours BI Benefits Rise From the Management of Risk, Revenue and Cost Must meet risks to: • Life • Revenue • Resources • Compliance • Responsibility • Authority Restricted to protect areas of: • Liberty • Privacy • Advantage Opportunities: • Technical infrastructure (vendor or supplier extension) • Revenue, new market

5. Information Integration and Analytics Happen All Day, Everywhere • All day, every day • Formal meetings • Informal conversation • BI tool diversity • Data transfer • Data file preparation • …in e-mail, over the phone, at the coffee station

6. Case: Grocery wholesaler spent an average of 208 hours for each SKU rationalization on 2,000 SKUs every two years — reduced to 16 hours Example: 16 spreadsheets created in different departments by two headcounts at 12 hours each month, used in four hours of resolution and planning meetings for 16 department heads 2,000 SKUs x $100 burdened rate x 208 hours vs. 16 hours; OR, $41,600,000 vs. $3,200,000/2 = $19,200,00 FTE relief per year Hypothetically: Single report, produced in five minutes on-demand (approximately 16 times), shortens meeting to one hour for planning only; OR, ((16(2x720 minutes))+((16x240 minutes))x12 vs. ((16x5)+(16x60minutes))x12 12,480 minutes (208 hours) vs. 322,560 minutes (5,376 hours) OR 336 hours per annum for each department head How Much do ThoseMeetings Cost? What could your effective leaders do with an additional 336 hours per year?

7. Spreadsheet BI: Where Those Meetings Come From… • Spreadsheets have an unacceptably high percentage of errors • Attempts to add data to provide market insights, transactions or corrections result in a bad version of the truth • Some users deliberately attempt inappropriate or illegal activities The usefulness, flexibility and convenience of spreadsheets are undeniable, but enterprises must nonetheless regard their use as a high-risk business practice

8. Optimization Predictive Modeling Forecasting Interactive Visualization Analysis and Drill-Down Alerting Ad Hoc Reporting Production Reporting Where to Find the Business Case There is hardly any business case just for reporting What benefits can we gain? What is going to happen next? What should we expect? Where is potential? Why did it happen? What just happened? Who did what? What happened? Value

9. The ROI Discussion • Sponsors and budget holders regularly ask IT for the ROI from the BI initiative • Unless the IT department engages in platform rationalization and standardization efforts, it is not in a position to calculate direct benefits • It is called "business case" because the business needs to prepare a BI justification, including ROI • BI infrastructure components, including the data warehouse, rarely generate their own ROI • Any ROI calculation for BI is based on a set of assumptions

10. Common (Challenged) Single business unit Data mart, needs IT oversight IT-funded Low buy-in, end-user interface challenges Simultaneous with application package Reporting without much analytics CIO/CTO initiative Well-funded but low buy-in Reaction to catastrophic event Focused on past instead of future Best Business C-level initiative Focused on strategic objectives Cross-department "super fund" Forces almost automatic subject matter expert coordination External business need Compliance or vendor/supplier leveraging Anticipating catastrophic event Resources committed early Best Funding Practices vs. Most Common

11. Objectives • Increased Awareness of Information and Funding Silos • Funding usually governs how a BI solution is ultimately built. Control of the budget frequently creates bias in every aspect of final design. • Overcome Skepticism to Resume Funding • The creation of silos leaves the impression that BI at the enterprise level is difficult, if not impossible. What is different now?

12. "Spinach E.coli traced to nearby cattle ranch" 102 (51%) hospitalized. 31 (16%) developed hemolytic-uremic syndrome (HUS) — kidney failure. Three (five) dead. Traced back to a single field. See "2006 Spinach Recall: Roots of a Tragedy," USA Today, 21 September 2007 UniCredit Bank Simulation models and anticipates risk managing customer portfolios. Key performance indicators continuously monitored by the business stakeholders. BI is the information backbone to execute the new business model. Data attributes centrally managed by metadata environment. From Reactive to Proactive…Investigation to Prevention http://www.cdc.gov/foodborne/ecolispinach/100606.htm

13. The Issue Is Funding Silos, Not Design or Tools • The No. 1 reason for failure is "lack of executive-level sponsorship" • Enterprise-level funding is rare • Enterprise-initiated activity is rare • The No. 2 reason for failure is either: • Data quality is not addressed, or • No alignment with strategic objectives • It is almost never (less than 8%) down to the database or other tools A little help?

14. What Is Sponsorship? • A sponsor is at risk • Power and prestige • Funds and resources • Staff or personal employment • The budget is owned • Authority • Responsibility • Not fast food • Not 1,000-year-old egg either Are you just involved — Or, are you committed?

15. Good Reporting needs across two departments Show relationship of financial results across business units Marketing campaign results Cost reductions Bind the Sponsor to the Justification Better • 360 degrees of customer service • Partner channel leverage • Resource and asset optimization • Maximize revenue streams Best • Introduce "forks" to in-line operations • CFO legal and public statement support • Preserve "life and limb" • Identify new revenue The creation of dozens or even hundreds of internal metrics should always be tied to a strategic objective that is under the responsibility and authority of your sponsor. However, the collection and amassing of data should be associated with business processes

16. Attract and Retain Customers Attrition Product Referrals Agility and Innovation Retention Prospect Service Levels Experience Improve Workforce Effectiveness Product Third-Party Information Delivery Agreement Collaboration Workflow and Process Availability Predictive Modeling Procurement Profitability and Effectiveness Customer Satisfaction Real-time Resource Allocation Effective Analysis Employee Retention Compatible Reports Suppliers Compatible Reports Cost, Revenue and Risk Management Interact — the Funding Approach Should "Cross Over" Risk

17. Components of a Good Business Case • Quantifiable metrics associated with financial performance metrics • Design responsibility and funding authority influence each other • Political issues recognized as material barriers and addressed • Reasonable chargeback model matches culture 1. IT Performance Metrics 2. SLAs • Starts with the customer's view of service • Focuses on outcomes Customers Process A Step 1 Process A Step 2 Process A Step 3 SLA Outcome A Service Process B Step 1 Process B Step 2 Process B Step 3 Outcome B SLA

18. Don't 1. Create a data integration "engine" for IT 2. Enable manipulation of reporting numbers 3. Initiate BI to solve data quality issues 4. Assume the prepackaged BI/DW solution is adequate 5. Build BI as one-off project 6. Ask the outsourcer to include BI 7. Focus on an interface or tools Do 1. Identify a business opportunity 2. Review opportunity with sponsor 3. Identify the risk of inaction 4. Convert opportunity and risk into economic value 5. Align with strategic goals 6. Identify end-user market 7. Market to end-user management 8. Design metrics for strategic alignment 9. Evaluate the availability of data 10. Obtain FTE and financial commitment The Business Case Dos and Don’ts Many organizations leap into planning a BI project before they have aligned strategic goals with BI capability

19. Recommendations • Identify the current sponsor for each project. • Determine a senior management "center of gravity." • Compare existing project objectives to strategic goals (financial performance metrics and so on). • Identify requirements suspended due to funding issues. • Review requirements for suspended efforts and across existing efforts to determine if existing funds can be used to revive those suspended efforts. • For new projects, do not only repeat the process in seeking leverage, but also recognize the importance of linking to strategic objectives.