Operational BI: Getting to the Next Level
Whether used for reporting, analysis, or some other type of decision-support activity, business intelligence (BI) technology has become one of the most pervasive types of software in the business world. But are today's companies using BI to its full potential?
In most cases, BI has found a home at two primary levels: among senior executives who need to obtain strategic information, and among line-of-business managers responsible for departmental reports and tactical analysis activities. However, these common uses of BI only scratch the surface of its potential within the
enterprise – involving perhaps 5 percent of the users and 10 percent of the available data.
The next horizon for BI involves extending actionable business information to many different types of employees throughout the enterprise – as well as to external partners and customers. This is known as operational business intelligence (OBI).
While most BI systems are designed to solve specific analytical problems, operational BI systems can provide input and feedback to everyone in the enterprise – not just to managers and business analysts. When properly constructed, operational business intelligence systems become fundamental enablers for optimizing
the performance of key business processes.
Shortening the "time to discovery" is the guiding principle of OBI systems. This is an important concept, since it affects how BI systems are designed and integrated with the entire information infrastructure. Rather than using decision support tools after-the-fact to analyze problems, they must work in conjunction
with the operational systems that run the business.
Understanding the OBI Progression
Achieving this level of organization-wide intelligence requires BI managers to take a hard look at how different people use information. Senior executives need highly consolidated information at a strategic level, rolled up from all the various lines of business. They typically demand highly summarized, functional
reports delivered through a portal or dashboard. This sounds simple, but in order to make it intuitive and truly useful there is a lot of integration work that must be performed behind the scenes.
The next level down includes line of business managers in charge of sales, marketing, quality assurance, and other corporate domains. Typically, they are analyzing the performance of their departments and asking questions about why certain events occurred or did not occur. Often these analysis activities take place
on a periodic basis – such as weekly, monthly or quarterly – and thus can be generated from a data warehouse. Why did we miss our revenue goals? Let's drill down and find out. It turns out we lost 20 key customers due to customer support problems. This level of analysis is often referred to as tactical or
back-office research. It's where business intelligence grew up in most organizations, and where it still dominates today. Tactical analysis activities often generate important information, but for the most part that information is isolated from the rest of the enterprise. That's because most companies don't do a
very good job of linking analysis activities among various departments.
Operational BI includes individuals across and down the organizational chart as well as customers, business partners, and other external constituents. It requires BI tools that can leverage many kinds of data, including data warehouses and real-time information from production systems.
Extending Data Warehouse Assets
In many cases, operational information is already available, but simply not being used to its full extent. RBC Financial Group is a prime example. Until recently, personnel at the bank's operations service centers had to laboriously reconstruct personal transaction statements by combining information from legacy
information systems with microfiche records. It was costing the bank millions of dollars each year to provide this service, and customers were not getting information in a timely manner. This situation changed when RBC released Bankbook Reconstruct, a WebFOCUS application that automates the process of constructing
and printing bank statements. Operations personnel use the system to instantly reconstruct consolidated statements in English or French, containing up to six years of transaction history for any one of their 12 million personal banking clients.
Prior to the Bankbook Reconstruct project, the enterprise data warehouse was not used as an operational system, but only for trending and ad hoc reporting. By envisioning a new usage for the data, the bank was able to improve its customer service. "Now that we can easily access and analyze the data, there are many
different possibilities for using it," says Andy Hanna, a project manager for report management and distribution at RBC.
This type of external-facing OBI environment is becoming more and more common. Travel and Transport (www.tandt.com), the eighth-largest travel-management company in the nation, worked with Information Builders to create a self-service reporting environment for analyzing corporate travel purchases. Customers at about
300 corporations use the reports to analyze their travel spending on a daily, weekly, monthly, quarterly, and annual basis. The Web-based system helps companies like Kimberly-Clark, MetLife, and American Family Insurance plan, track, analyze and budget their travel expenses more efficiently – saving them millions of
dollars each year (see related story).
The take home point is clear: you can maximize your investments in BI technology by delivering the information you have to more people. Especially where existing data stores are involved, this can generate a return on investment that was never before realized.
A Proactive Mindset
Issues of compliance and disclosure are encouraging organizations such as BC Housing to develop and deploy OBI systems. This social service organization, which manages and administers a wide range of subsidized housing services throughout British Columbia, is using technology from Information Builders to determine
the risk levels of housing providers and develop comparative benchmarks for monitoring financial compliance and performance. Using WebFOCUS and iWay, BC Housing has created better methods for calculating housing subsidies, assessing risk, and reviewing the activities of more than 600 housing providers across the
province. "Our new business intelligence environment makes our staff more efficient all around," says Eileen Tiessen, manager of program operations at BC Housing.
In other instances, operational BI involves how you process incoming information. For example when orders are taken by an order entry system or a bill of material is updated, these events might notify other applications within the enterprise. Sometimes called Business Activity Monitoring (BAM) systems, these OBI
applications use software listeners and agents to provide aggregated insight to executives involved in strategic planning. When properly constructed, these information systems enable users to look across multiple business applications and accept events from multiple sources, such as those supporting customer
relationships, the supply chain, and sales transactions. Information about a business process can be propagated from any information source – real-time ERP transactions, warehoused data, business-to-business systems – and delivered to line managers, executives, or automated business processes.
Gartner's Bill Gassman believes these real-time monitoring applications represent a fundamental component of operational BI. "Unlike traditional BI users, such as business planners and executives who monitor slowly moving indicators and trends, users of operationally focused BI applications cannot afford to make
decisions based on 'stale' data," he says. "Instead of understanding the past, they must understand the present."1
Many state and local governments use this type of OBI system to identify trends and facilitate collaboration among agencies. For example, the New York City Department of Health (DoH) has developed a first-response system that facilitates collaborating with hospitals, emergency workers, and the Centers for Disease
Control to proactively monitor the outbreak of diseases. Nearly three-dozen New York hospitals routinely feed patient data to the DoH, which uses iWay and WebFOCUS to combine and analyze the information. The same data-sharing partnership applies to the city's 911 emergency system. As information comes in from both
sources, the DoH uses business intelligence and cluster-modeling tools to spot trends that indicate a disease cluster might be occurring in specific neighborhoods, a process known as syndromic surveillance.2
Managing Performance
Operational business intelligence can also influence worker productivity. For example, TELUS is using OBI technology to help monitor and improve the performance of about 3,000 field-service personnel (see cover story). Having detailed information allows managers to improve
systems and processes to further drive efficiencies in operations. In addition to boosting productivity, the company has an invaluable database of information about labor trends, which helps them determine how to allocate staff for certain areas and times of the year.
Another trend driving BI down to the operational level is an insistence on the part of CIOs to adopt corporate technology standards that make it easier for diverse groups of users to access information. Web-based BI portals reduce infrastructure costs and make it easy to control access to confidential information –
two factors that motivated Henry Ford Community College to select WebFOCUS as its reporting standard. Since installing the software two years ago, developers at the college have generated hundreds of self-service reports for administration, enrollment, registration, financial aid, HR, accounting, and security. The
college also shares Web-based reports with external companies as part of its Trade and Apprentice program, and plans to integrate WebFOCUS into its student information portal as well.
Right Tools, Right Approach, Right Results
To satisfy the needs of today's enterprises, BI tools must function at the strategic, tactical, and operational levels. The real hurdles are technical ones: the BI tools must be able to deliver complex functionality through a simple interface and have an architecture for deploying information on a broad scale in a
cost-effective way. In addition to accessing data from a data warehouse, operational BI systems must be able to extract real-time data from production business processes (see related story, "Integration Matters").
How do you get there? There are technical issues and cultural issues. Technically, you need BI tools with strong integration capabilities and a superior architecture that can deliver information to thousands or even tens of thousands of people efficiently. The tools must be able to present
information to a diverse user base in a usable way. Most employees are not comfortable using sophisticated analytical tools. OBI systems present information using familiar tools and utilities that are already ingrained within the organization.
Information Builders has worked for years to refine its self-service reporting paradigm. The overriding premise is simple: deliver complex functionality through a simple interface and make it easy to deploy on a broad scale in a cost-effective, manageable way. WebFOCUS applications utilize an autonomic server that
is capable of running itself under varying circumstances and workloads by continuously adjusting its resources, making OBI applications self-aware, self-healing, and self-optimizing in large production environments.
Of course there is more than just technology at stake here. OBI implies many cultural issues as well. Managers need to buy into the importance of involving rank-and-file users in their operational processes. There is an element of trust involved with enabling employees to make these kinds of decisions. Of course,
the BI tools must be able to enforce security at multiple levels.
Information Builders' training and support organizations are intent on helping customers understand the potential of OBI technology within the enterprise (see related story, "Supporting the Needs of OBI Customers"). These professionals are adept at helping customers apply
an operational perspective to BI initiatives.
When you analyze your business process, ask yourself how you can remove the paper from the process or simplify the number of touch points. How can you automatically deliver information to the people involved in those processes? How can you add triggers and listeners to your workflow processes so managers can
intervene at key junctures? At most companies, BI plays a static role: executives receive reports and then start asking questions. This is a reactive way of running a business. OBI helps you turn that around so the people directly involved in a business processes can take charge of operational activities.
Related Information
1. Gassman, Bill, "BAM Enhances Operationally Focused Business Intelligence," (Gartner Research DF-23-0697, July 9, 2004).
2. Colkin, Eileen, "Data-Sharing Partners Square Off With Bioterrorism," (InformationWeek, March 25, 2002).
 
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