In the recently released FY 2012 budget, the White House is requesting a $1.5 billion increase in IT spending. This is good news for the 10 federal agencies that will see budget increases but bad news for the 17 agencies that will see cuts. While the issue is complex, one of the primary drivers for losing budget is IT’s failure to deliver business value. This is particularly important for business intelligence and data warehouse (BI/DW) projects.
As business intelligence consultants, we have seen many federal agencies besieged with vast amounts of data and uncertain with what to do with it. Many buy costly software tools and hardware platforms but still find themselves flooded with data. Turning this data into actionable business information is a key challenge in which BI/DWs solutions are well suited. But just throwing technology at a business problem rarely solves it. Instead, a well thought out and methodological approach is needed to focus your efforts on achieving the maximum business value with the least amount cost.
Articulating Business Analytical Needs
The first step is to work with business users to determine their analytical needs. This will help reduce your sea of data into manageable pools. We have seen many agencies copy all of their source system data into separate analytical databases. But all they have done is move the problem, not solve it. The ever declining cost of storage and the rise of specialized (but not inexpensive) storage appliances increase the temptation to just copy the data. Resist this temptation – determine the analytical needs of your users first. Then, design an information architecture to meet those needs, implement data pumps to move the critical data from the source systems into the data warehouse and analytical data stores, and finally provide your users with analytical tools to access this business information.
Delivering Organizational Insight
Now that you have this pool of critical business information accessible via analytical tools, the next step is to make this information useful to your business users. This does not mean recreating their existing reports with the fancy new BI tool. It means training the business users on how to use business analytics to gain insight into what is really happening in the organization. This is a hard step since it requires somewhat of a paradigm shift from legacy reports, which focus on what happened in the past, to analytical reporting, which focus on what is happening now, and more importantly, what could happen in the future.
Analytics in Action: Operational Management
For example, let’s say that your agency delivers citizen-facing services and you measure how long it takes to complete a particular workload. Based on your new BI application, you know that it takes 85 minutes on average to process an initial claim. But what exactly does this mean? Is this good, bad or average? Is it getting better or worst? How does an individual office compare to this average? Is the office getting better or worst?
The power of BI is the ability to answer these and a myriad of other business questions in a quick and easy fashion. To exploit this power, these analytics must be used by managers and executives in making critical business decisions – this is where your agency will get the maximum business value. Buying an expensive storage appliance alone will not get you the same return – you must also know how your agency will leverage the resulting analytics in making business decisions.
Analytics in Action: Performance Management
Continuing with the previous example, a good business analyst will look beyond the simple average work time and try to uncover trends and correlations (e.g., average work time is increasing in the western region), discuss their interpretation of why it is happening (e.g., there are more entry level clerks in the western region) and suggest corrective actions (e.g., reassign senior clerks to the western region). Once management takes action, the analyst can use the BI application to determine if the intended result is happening (average unit work times should be decreasing in the west). This is the essence of performance management – improving organizational effectiveness by setting goals and tracking performance against those goals. Again, the critical first step is understanding business user’s analytical needs (and again, not copying data from one platform to another).
Smooth Sailing Ahead
As federal agencies grapple with managing the data flood, the best of them look at leveraging technology to reduce this sea of data into manageable pools of business information. Smart business analysts make sense of this information and provide it to managers and executives to help in making business decisions. By starting with business analytical needs and then using technology to get business analytics to business users, the data flood will be tamed.
The Data Warehouse Institute (TDWI) is holding their spring World Conference in Washington, DC April 3-8. Nancy Williams, DecisionPath’s BI/DW Vice President, will be speaking about aligning business performance management and business intelligence. There will also be a special government summit on managing the public sector data explosion.