Data Agility Eim
Data Agility Eim
Data Agility Eim
JANUARY 2006
A WHITE PAPER
Table of contents
Executive summary 3
1 Introduction 5
3.1 Background 10
3.3.4 Enabling genuine business KPIs through the disciplined use of data 14
Further information 17
Annex B Endnotes 18
Corporate overview 19
Organisations in the public and private sectors have rapidly growing data on customers, products
and activities. The key business drivers for the EIM agenda are:
• sales and marketing growth
• supply chain efficiency
• operational cost reduction
• security/identity capability
• regulatory reporting effectiveness.
The table below summarises what is important in EIM internationally and nationally and the actions
being undertaken by leading Australian organisations in this area.
5. Semantic Medium Developing metadata and master data strategies and tactics
reconciliation Deploying metadata/dimension data solutions
3
There is significant focus nationally and internationally on enterprise and data architecture. This is
seen as core to EIMʼs ability to respond to market and organisational change. Organisations are
developing architectures for their enterprises that are much more responsive to the needs of the agile
business, enable the true metrics of the business and allow near real-time responses to events.
Often described as operating in a ʻsea of dataʼ but with little information, enterprises are seeking
to leverage their data assets to gain a clear and accurate picture of their operations, customers,
supply chain and financial performance. They are also seeking to derive significant returns from
their business intelligence capabilities to devise better tactics and plans, respond more effectively
to emergencies and capitalise more quickly on new opportunities and threats.
Ineffective data management practices have lead to poor data quality undermining execution
of marketing, sales and operations. There is now substantial focus on data quality and many
organisations in Australia are currently back ʻup-streamʼ fixing their data before extending complex
analytical and data-driven insight capabilities.
Australian experience with data warehousing is similar to that overseas. While the data warehouse
has become a critical business tool, implementation and usage have been challenging. The
Australian experience in the deployment of a major data warehouse initiative shows that the
critical factors for success are:
• clarity of vision and clear articulation of the purpose of the data warehouse
• executive leadership commitment to what is often a lengthy delivery cycle
• knowledgeable and committed business users who drive and embrace the new
capabilities provided
• technical competence within the organisation and a well-defined technical
and data architecture
• high calibre resources applied at the right time in the implementation
• effective enterprise/vendor relationships
• defined and agreed internal charging model for the data warehouse
• governance framework to manage data quality, usage, access and security.
In Australia few executives and senior officers are satisfied they have achieved the highest
standards in data management and recognise the need to improve performance in quality, validity
of use, security and privacy. Many have or are developing plans to bring all these threads together
and thereby enable superior business performance.
For the purposes of this report EIM is defined as “the processes, technologies and tools needed
to turn data into information, information into knowledge, and knowledge into plans that drive
profitable business action.”1 The focus is on structured data within an enterprise — that which
is typically created and captured in systems and includes customer, product, account and activity
data. It does not include unstructured data such as email and electronic documents or models
for inter-organisational collaboration. As depicted in Figure 1 below EIM encompasses data
integration, data warehousing, business reporting and analytic tools.
Data Source
5
As set out in the EIM component framework below, EIM responsibilities encompass the
full information delivery lifecycle from data acquisition and integration, transformation and
consolidation, through to the provision of business intelligence and analytical capabilities to an
end consumer as a tool or a service.
Data Agilityʼs national and international research identified eight key trends in EIM. These trends,
a summary of the challenge they present and indicative response, are set out below. While
presented in order of importance there are strong links between each element and Data Agility
recommends that organisations consider each element in its direction setting.
Challenge
The increase in data sources and volumes, the need to integrate data across
disparate systems, and the move to squeeze latency out of decision-making
processes demand a more strategic approach to information management.
1 Information
architecture Response
Responding to these challenges requires a compelling vision for information
architecture that sets some basic standards for information management and
governance, as well as promoting the idea of ʻdata as
an assetʼ throughout the organisation.
Challenge
Poor data quality practices result in lost productivity, poor customer service,
faulty business decisions, and an inability to effectively manage compliance
and risk or capitalise on new opportunities. At a project level data quality
remains a significant challenge for EIM initiatives and is a major reason for the
2 Data quality failure of these projects.
and governance
Response
Focus is turning to tackling what can seem like intractable data quality
problems in nearly every business domain. The completeness, validity and
accuracy of data is being widely addressed. Organisational accountability and
governance mechanisms are key elements of the response.
Challenge
A significant component of the EIM effort is consumed by data integration
issues. In many large organisations integration among disparate applications
has been achieved via custom-developed interfaces.
3 Enterprise Response
data integration
With the growing demand for integration services and the need to reduce
latency in information delivery, organisations are moving to a standard set of
integration services. In addition organisations are addressing architecture,
standards, processes, and structures that will support an enterprise approach
to their data integration efforts.
7
Challenge
The distinction between transactional and analytical activities is diminishing.
Improvements in technology have raised the bar on the performance of
business processes moving decision support into the operational domain.
As more businesses strive for the ideal of the real-time enterprise, there is
growing interest in reducing the latency of information delivery. Making faster
4 Information decisions based on more real-time information can benefit enterprises seeking
latency and faster and more efficient operational processes.
real-time
intelligence
Response
The advent of business activity monitoring (BAM) and real-time intelligence
uses data warehouse and business intelligence capabilities to optimise
transactional systems, and embed decision-support capabilities into
operational processes.
Challenge
Most large organisations have hundreds of separately developed and
implemented applications, many of which contain information that must be
shared among them. As data sources proliferate, a complex problem has
emerged — achieving what is often referred to as ʻsemantic reconciliationʼ.
This is the state in which users and applications that are involved with data
5 Semantic
reconciliation have a persistent and consistent interpretation of that data3.
Response
Various technologies and directions around metadata, master data, and
the ʻsemantic webʼ are each seeking to address aspects of this complex
reconciliation challenge. The majority of successful data warehouse initiatives
include formal metadata management facilities.
Challenge
Recent innovations in database technology and hardware performance have
effectively eliminated the need to fragment data to accommodate tradeoffs
between size and speed.
6 Infrastructure
standardisation
Response
This new freedom enables organisations to consolidate their current EIM
investments to remove duplication and inefficiencies introduced through a
historically siloed approach to their decision support activities.
7 Platform Response
performance
As performance challenges are removed from the EIM equation new
opportunities exist to realise platform consolidation and integrated business
intelligence, and to deliver a service-oriented approach to information
acquisition and business analytics.
Challenge
Most large organisations have many similar tools delivering, at high cost,
fragmented and often undisciplined usage of data.
Response
8 Tool
standardisation To achieve economies of scale and drive down IT support costs organisations
are standardising reporting and analysis tools. While consolidating to a single
suite can be challenging, organisations are adopting a standard for each tool
category — for example analytic or reporting. Profiles of end-user communities
are then developed to map the appropriate tools to their business needs.5
Figure 3 below indicates where the categories line up and make significant impact on the EIM
stack. Data Agility recommends that organisations consider this ʻwhole of EIMʼ view in its data
warehouse direction setting.
STANDARDISATION
Enterprise Business Intelligence Tools
REAL-TIME INTELLIGENCE
INFORMATION ARCHITECTURE
LATENCY
STANDARDISATION
QUALITY SEMANTICS
Data Source
9
3 EIM — an Australian perspective
3.1 Background
Much of the research references overseas experiences and trends and particularly those of North
America and Europe. This means that it is based in organisations and markets that are frequently
much larger than those in which most Data Agility clients predominantly operate — Australia and
New Zealand.
While it has many similarities to other geographies Australia has its own market characteristics.
Recognising this Data Agility has sought to identify key trends within Australiaʼs market as well as
those internationally. Accordingly Data Agility engaged with:
• senior officers at some of Australiaʼs largest organisations (and greatest data users) to get
their views on the direction of EIM
• senior officers of the local operations of global organisations to see how they apply themselves
to the Australian market and regulatory conditions in the context of their parent companyʼs
requirements and regulatory environments
• representatives of the Australian and Asia Pacific research and university community.
Data Agility is extremely grateful to this group of high performers whose frankness and openness
reflect both the reason for their achievements and the recognition of the challenges before them.
• Emerging national and international regulatory reporting requirements are forcing many into
new systems, new data and new processes providing consolidated reporting at group level.
For some of the Australian operations of international organisations this is a real challenge as
they update their infrastructure, applications and data under the scrutiny of the US Securities
and Exchange Commission.
There is also a maturing understanding of data management and its principal components of
data consolidation, the enablement of reporting and ʻrear viewʼ analysis. Additionally there is
more interest in enabling the organisation through the application of predictive capability and the
application of artificial intelligence. It is noted however that while interest is growing in artificial
intelligence applications are not widely used and trust in ʻblack boxʼ applications is not yet at a
high-level.
Using the example of Data Agilityʼs retail customer data maturity model the table following sets out
an example of how many Australian organisations are approaching the data challenge.
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Level 1: Level 2: Level 3:
Maturity level Coordinating Understanding Predicting
the current the past the Future
The Australian experience shows that while many of the organisations Data Agility engaged with
have sought to achieve Level 3 these endeavours have only been partially successful. Major issues
have emerged with the quality of the data, the tools and the discipline with which they are applied.
Many in the Australian IT community recognise that their efforts to ʻsupport business agilityʼ,
ʻenable the businessʼ or ʻprovide the data the business needsʼ have not been completely effective.
Several senior IT officers stated that in their view the business regarded IT as too slow, too
expensive and to unresponsive. In effect, they were not enabling the data-driven enterprise.
These remarks were often made by senior members of the IT community who would be widely
viewed as exceptionally ʻcustomer-centricʼ in their behaviours and engagement with the business
community. An underlying issue may be that the IT function in some organisations may have
become so ʻcustomer-centricʼ that it has sacrificed some good IT management principles and
good practice which in turn has lead to the greater complexity and cost and eventually a less
responsive and effective IT operation. An effective Australian analogy may be Ansett Airlines,
which collapsed under the burden of an aircraft fleet that met every route and passenger need
perfectly but couldnʼt be managed or maintained.
The more widespread appreciation of the need to focus on the data has for some clarified that their
business/technology relationship had become unbalanced and that much of the true business
opportunity is still to be achieved at this interface.
It is also acknowledged that there are significant opportunities to deliver better business
outcomes by improving communication within an enterpriseʼs IT community. It was evident that
there continues to be a described gap between ʻbusinessʼ and ʻtechnologyʼ communities in many
organisations.
The creation of these roles has to a significant degree been driven by the developing
understanding:
• of the value of data
• of the challenge of large growth in data volumes
• that data is not just an IT systems challenge
• that the value cannot be delivered solely by integrating systems. It is about integrating and
consolidating data and having a coherent view of the customer, product, account, relationship,
operations, finance and supply chain.
These roles have impacted the balance of power in the business/technology relationship adding
a new component to the relationship.
For some of those on this path the IT function has been asked to focus on designing and delivering
a cost effective architecture that supports ʻbusiness agilityʼ and responds in a consistently timely
manner to business change request.
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3.3.4 Enabling genuine business KPIs through the disciplined use of data
Data Agility Australian research found a widespread desire within the data and technology
community to enable the Good to Great6 perspective of confronting the brutal facts and focusing
on genuine business KPIs.
Research also found the community senses there is widespread undisciplined use of data. One
executive stated that in a recent audit he identified that his organisation had over 1000 Microsoft
Access databases and he had little understanding of their contents, usage or value. He observed
that much of this activity appeared to be focused on maintaining data for individual rather than
corporate agendas. Another executive spoke bluntly of Microsoft Excel as ʻthe enemyʼ due to
its proliferation and undisciplined usage. While typically the language used was less provocative
it does reflect a widely held view. An extremely powerful tool Excelʼs usage amongst a
burgeoning analyst community was uncontrolled leading to high analytical staff costs, and often
questionable (and perhaps self-serving) ʻfactsʼ being used in business decision making. An issue
that emerges is that data is often viewed as a free resource and therefore undervalued and applied
without discipline.
While there are a wide variety of needs to be met, from controllable audit and regulatory functions
to more nimble entrepreneurial activities, the data itself was on occasion becoming the ʻvillainʼ.
Widespread access and undisciplined usage is in a number of instances undermining trust in
the data.
It was acknowledged within the community that while ʻdata high-jackingʼ did occur some of the drivers
of these business behaviours lie with ITʼs inability to be sufficiently responsive to business needs.
The overall requirement was to clarify and enable the true metrics of the business. This will stem
the ad hoc analysis cost blow out afflicting so many businesses and enable genuinely focused
application of EIM.
The reasons for the data quality issues were many involving business processes, ETL process,
and data integration and consolidation issues. Establishing a data quality culture throughout the
enterprise is widely regarded as a major challenge requiring significant changes in behaviour in
business and technology. Australian research confirmed this as a major element in building trust
in data and improving the discipline within which it is applied.
Improving data governance was picked by many as a significant issue and as an important
component in an effective data culture. Many organisations are engaging business people through
governance boards and forums and in the development of data quality policy and procedures.
Many have also found that data skills at senior levels are often lacking — not just on the business
side. Data is often not well understood on the technology side. Currently data understanding
is on the agenda of the ʻrightʼ people but they often donʼt have the skills need to execute the
responsibilities. This intellectual depth is being built.
A point that was made on a number of occasions was to beware of over consolidation. It is also
understood that to genuinely support business agility, consolidation should not be undertaken for
consolidationʼs sake and consolidation should not take place above a decision point.
It was also noted that while data storage costs are falling this should not be used as an excuse to
store unwanted or unused data.
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3.3.8 The semantic layer
The growth in understanding of data, the recognition that much data goes unused and that the
benefits of aggregated data are enormous is driving much greater understanding of metadata,
master data management, dimension management and the discussion of the semantic layer. This
is driving a strong desire for enterprise data models and tools to enable metadata management.
However in many organisations the level of understanding is uneven and there is still significant
discussion of basic definitions such as ʻwhat is a customer?ʼ.
In some organisations discussion is being lead by the data and technology leadership. However
there is also evidence that in other organisations the agenda is being driven by sophisticated
business users who understand the business benefit.
Experience within Australian enterprise also indicates that the semantic discussion is well
understood by consultants who operate at a project level but application and impact falls away as
initiatives move into an operational arena where core staff do not have the same understanding
and commitment.
Many organisations data warehouses have been provided by the leading vendors such as Oracle,
IBM and NCR Teradata. The experiences within the Australian community vary widely. Two
approaches to data warehouse implementation were described: a ʻbig bangʼ, which replaces
existing capability, and an organic growth approach, which migrates capability over a longer time.
Success with either approach was largely a reflection of the clarity of vision for the warehouse and
level of executive leadership support.
There is evidence that business users have in some cases lacked confidence that bold projects
would succeed and some users have resisted losing direct control of ʻtheirʼ data. This has led
to users seeking to retain existing reports and data fields rather than seize the opportunity to
review and revise business objectives and KPIs. This means that some have found it very
difficult to switch off existing capability thereby diminishing the value delivered by warehouse
implementations.
Several organisations saw lack of depth of technical implementation resources in the local
market as a particular concern. A number also spoke of local implementation teams being weakly
supported by overseas headquartered vendors and expensive, expert resources only being
engaged when deployments hit crisis point.
Sound technical and data architectures are a platform for success though it was noted that vendor
industry data models were not always a good fit with Australian organisations. Technical clarity
of the upgrade path for the warehouse was viewed as very important for a full understanding of
the total cost of ownership.
Further information
The information provided here summarises Data Agilityʼs research.
For further information on any of the topic areas please contact us at:
Ascential — Master Data Management – 2005 Delphi — Taxonomy and Content Classification – 2002
Ascential — On Demand Data Warehousing – 2004 Delphi — The xEnterprise Architecture – 2003
BearingPoint — Charting the Path to Enterprise Agility – 2005 FirstLogic — Implementing Data Quality as a Corporate
Service – 2004
BearingPoint — Enabling the Holistic Enterprise with Web
Services and SOA – 2004 Forrester — Change Data Capture Gives Data Integration
Greater Scale and Speed – 2004
BearingPoint — Making IT Systems Development Agile and
Adaptive – 2005 Forrester — Creating the Information Architecture Function
– 2004
BearingPoint — The Agile IT Architecture – 2005
Forrester — Grading BI Reporting and Analysis Solutions
BearingPoint — The Process Driven Enterprise – 2005
– 2004
BearingPoint — The ROI Behind a Converged Approach to
Forrester — How to Evaluate Enterprise ETL – 2004
Data – 2005
Forrester — IT Consulting and Integration Services Continue to
Business Objects — Metadata Management Solution – 2004
Commoditise – 2004
Cerebra — Enterprise Information Management – 2005
Forrester — Real-Time Datawarehousing - The Hype and the
Cerebra — The CIOs Guide to Semantics – 2004 Reality – 2004
Data Agility — Forecasting and prediction: Data-driven insight Forrester — The ETL Tool Market is Back and Growing – 2004
– 2003
Gartner — Business Activity Monitoring BAM Architecture
Data Agility — Customer relation management assessment – 2003
– 2004
Gartner — Data Integration forms the Technology Foundation
Data Agility — Data management maturity – 2005 of EIM – 2005
Data Agility — Metadata concepts, benefits, applications and Gartner — Data Quality Firewall Enhances Value of the Data
tools – 2005 Warehouse – 2004
Delphi — Insight for Business and Technology Leaders – 2004 Gartner — EIM is a Core Element of Your IT Architecture
– 2005
17
Gartner — Emergence of EIM Drives Semantic Reconciliation Informatica — How to Design and Implement an Integration
– 2004 Competency Center – 2004
Gartner — ETL and Application Integration Suites Convergence Informatica — Integration Competency Centers WP – 2004
Continues – 2004
Intel — Metadata Management - The Foundation for Enterprise
Gartner — Magic Quadrant for Customer Data Integration Hubs Information Integration – 2004
– 2005
Kaledo — An Architected Approach to Information Integration – 2004
Gartner — Service Oriented Business Applications Require
Knightsbridge — Top 10 Trends in BI and DWH – 2005
EIM Strategy – 2005
OMG — Common Warehouse Metamodel 03-03-02 – 2003
Gile — Business Processes are Important to BI Applications
– 2005 OMG — Oracle 10g Integration - Business Activity Monitoring – 2004
Human Inference — Compliance and Data Quality – 2005 Stratature — The Case for Enterprise Dimension Management – 2005
IBM — Banking Data Warehouse - General Information Manual TDWI — Best Practice in Business Performance Management – 2004
– 2004
TDWI — Building the Real-Time Enterprise – 2003
IBM — Banking Data Warehouse Brochure – 2001
TDWI — Development Techniques for Creating Analytic Applications
IBM — Information FrameWork - Critical Business Process – 2005
Models – 2002
TDWI — Evaluating ETL & Data Integration Platforms – 2003
IBM— Information FrameWork Objects Model – 2002
TDWI — Strategies for Consolidating Analytic Silos – 2004
IBM — Introduction to BI Architecture Framework and Methods
TDWI — The Rise of Analytic Applications – 2002
– 2004
TDWI — The Secrets of Creating Successful Business Intelligence
IDC — Managing Master Data for Business Performance
Solutions – 2003
Management – 2005
Teradata — Enterprise Event Management in Banks – 2005
IDC — Oracle Builds Comprehensive SOA Platform – 2005
The CDI Insititute — Customer Data Integration - Market Review &
IDC — The State of Business Analytics – 2005
Forecast – 2004
IDC — Why Consider Oracle for Business Intelligence – 2004
The Nucleus of Enterprise Integration – 2005
Annex B Endnotes
1
The Data Warehouse Institute, The Rise of Analytic Applications: Build or Buy?
2
The Data Warehouse Institute, Smart Companies in the 21st Century
3
Gartner, Emergence of EIM Drives Semantic Reconciliation
4
IDC, Oracle Builds Comprehensive SOA Platform “Grid computing involves the leveraging of a
virtual pool of resources (servers, storage, devices, databases, network devices, etc) to support
enterprise workloads. These resources can be allocated to different, and parallel, workloads
depending on priorities. Grid computing is enabled by a collection of software services that
automatically manages this workload supply and demand”
5
Forrester, Grading BI Reporting and Analysis Solutions
6
Jim Collins, Good to Great, Random House 2001, Chapter 4: Confront the Brutal Facts
Services
Data management
Many organisations now have a proliferation of data together with warehouses, marts and tools to
manage it. Data Agilityʼs approach and methods enable organisations to achieve their business
goals by leveraging these often complex data assets.
Data-driven systems
Data Agility deploys an end-to-end structured framework for developing and enabling systems
that focus on access and application of data. The framework is focused on developing service and
system components for a common business function across multiple business processes such as
single view of price or single view of customer.
Data-driven insight
The Insight Service consists of tools and process that drive insight from an organisationʼs data.
It provides executive and business management with unfiltered access to data supporting/enabling
strategic and operational decisions. It is deployed as a solution within an organisation or provided
as a bureau service.
Project services
Data Agilityʼs project managers have long experience in managing business and IT projects
that deliver real business benefit. This experience means they apply solid project management
disciplines — risk management, cost control, resource management, change control and
communication — within Data Agilityʼs methodology.
Clients
Data Agilityʼs clients Include Amgen, AAMI, ANZ Banking Group, Australian Tax Office, British
American Tobacco, Charles Sturt University, Coates, Department of Employment and Workplace
Relations, Epworth Hospital Group, GlaxoSmithKline, Insurance Australia Group, InsuranceLine,
NEC, News Limited, PMI and Telstra.
Partners
While vendor independent Data Agility has relationships with many of the worlds leading technology
providers. Further details are provided at www.dataagility.com.
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ENABLING THE DATA-DRIVEN ORGANISATION