Editor's note: This article is the companion article to "A Guide to Costing BI and BPM Implementations," which was featured in the July issue of DM Review.
Why Do I Want To Do It?
The current trends for an enterprise using information technology dictate that to move forward in today's competitive business climate, instantaneous access to information using a business intelligence (BI)/business performance management (BPM) set of tools will provide a key competitive and strategic advantage. While few arguments can be made to counter the point that access to information highlighting key performance indicators is not important, enterprises jumping on the bandwagon should be aware that the implementation of these solutions is not cut and dry. Careful planning is required, along with an extremely watchful eye to seek possible hidden implementation costs.
Undoubtedly, today's economy demands high accountability, and everyone knows that there are, potentially, very dire consequences for executives and businesses who continue without the benefit of tools and applications that ensure total veracity and verification of their information. The BI/BPM vendors have kept a vigilant eye on the marketplace and have quickly learned how to exploit the newfound fears and the media coverage of the past year to the financial problems of major companies, taking great care to use this information as reinforcement for new solutions and applications. While the new standards force more accountability and personal liability, this is not a reason to move recklessly toward technologies that promise quick fixes and miracle cures at very little costs.
Access to information is a legitimate and important business goal. Companies are able to derive significant benefits from existing and evolving BI/BPM technologies. Analytics that can predict the right product mix for manufacturing; that can help you understand and anticipate your customers' needs, and that enable you to provide the right product or service at the right time to the marketplace will definitely drive business and revenue targets. BI/BPM vendors can no doubt be key partners; but as is true of all technological solutions, vendor solutions are merely tools which will serve and provide benefit only if the deployment is well thought out, well managed and their implementation is consistent with the original purpose driving the needs for the solution.
What is BI/BPM?
BI/BPM is not an out-of-the-box product. No salesperson can sell you a handful of "BPM CDs" and solve your company's reporting and analysis problems. Rather, BI/BPM is a set of business rules, practices, processes and philosophies coupled with technology components implemented as information gathering and analyzing applications. The total solution and resulting applications create demands that data be in certain formats; that individuals understand the data and, more importantly, that someone who is familiar with the information can interpret the results. Recently, looking through the many Web sites dedicated to the open user discussion of BI/BPM tools, it was amusing to see a user post about implementing a vendor's BPM - defined by the poster as "business project management" - and asking if anyone else had done it. One of the replies explained that the acronym BPM actually refers to "business performance management" to which the original poster responded, "Not sure what it is, but we're taking a crack at implementing it."
Understand What You Are Implementing
The golden rule of BI/BPM selection: understand what you are purchasing and the demands and consequences of implementation of the selected vendor solution for your organization. Every solution demands something from your organization, and those demands have a price and a real dollar value. Very few individuals will purchase an automobile without carefully scrutinizing the key features. Selecting and implementing a BI/BPM solution should be no different. Failure to ask the right questions and understand the solution's real requirements to the organization can be one of the most costly mistakes any enterprise makes.
A BI/BPM implementation project has many similar characteristics to any technological project. It requires strong project management and a vigilant eye that understands the "big picture." However, it also has some very marked differences from traditional operational-type implementations. For instance, a BI/BPM solution generally has significantly more involved data sourcing requirements, such as the need to integrate data from many source systems, databases, desktop repositories and subsidiary companies. In addition to the volume of data, you must also be aware of the data cleansing, standardization and quality assurance needs of the BI/BPM solution. Further, a BI/BPM solution generally garners much greater visibility and legal impact than any other implementation in business today. Contrast these specifics with those of a "standard" IT operational system where the bulk of the data is generated by the application with minimal input from other systems, and the systems tend to be more departmental in scope. No CEO or CFO has ever been charged with a felony for an incorrectly entered sales order. Ignoring these differences will cost your enterprise significant dollars.
Don't Underestimate Required Manpower
From a management perspective, a BI/BPM implementation is similar to any other technological solution. However, the degree of management vigilance and involvement required by a BI/BPM implementation is significantly higher. Further, the manpower requirements are also much more intensive than for "standard" IT projects. A company implementing a BI/BPM "solution" needs to understand that the deployment is not straightforward and simple. Resources cannot be casually assigned. A consistently overlooked cost during a BI/BPM implementation is utilization of key manpower.
The main reason to undertake a BI/BPM project is to provide access to vital information to the right people in the organization who can use this key indicator information in strategic decision making. During a BI/BPM project, it is therefore an absolute requirement that the people who understand and use the required information be involved during the implementation to perform extensive verification and validation of the information resulting from the solution. Therefore, if these individuals are heavily involved in the implementation, who is going to do the full-time duties they already have?
Many of the solutions are multidepartmental and slated for long implementation cycles, and the day-to-day business must continue while the implementation is taking place. The involvement of key personnel will definitely have an impact on the performance of their daily assigned duties. Failure to take this into account will either hinder daily operations or implementation or both. Plan for the involvement of key personnel in the project plan; and then anticipate the inevitable -- that the key personnel will be drawn into other tasks, which will likely limit their dedication to the BI/BPM effort.
While it is difficult to dedicate the identified key resources, this is a necessary evil. The last thing a company wants is a BI/BPM solution completely deployed by a vendor as a turnkey solution. What happens when senior management generates the next strategic information request? If the solution was built in a vacuum without any significant involvement by the company's IT and/or MIS personnel, then the vendor must be reengaged to develop the necessary extensions to the solution. One of the most obvious benefits of BI/BPM is the ability to easily generate key business metrics for your strategic planning using a proven solution that easily extends with the growth of the business. Without a solid understanding of how to deploy these solutions using in-house personnel, the solution will grow with the enterprise, but only at the expense of additional consulting contracts.
During an implementation of a BI solution at a large financial institution that reported risk and profit analysis, a key player was unavailable to assist in the design of the solution to perform verification of the source data and validate the information coming out of the final implementation. After a 90-day effort by a three-man implementation team, the product was rolled out and turned over to the client at the project manager's direction. To the horror of everyone, the project's deliverables did not provide the required reporting functionality that would have made the application useful to the entire organization. As a result, an additional six-week effort was required to rewrite the application. This additional effort cost the client more than $125,000 and at least twice that amount to the vendor. The lack of dedication to the project by key personnel caused major cost overruns and a large client investment in lost time and effort (as well as a rebuke of the project manager for not making scheduled deadlines).
Understand the Politics and Environmental Limitations
From personal observation and involvement in several BI/BPM implementations, another area of underestimated cost identification is the failure to understand or take into account the political climate at the implementing organization. Implementers start major projects by gathering the requirements that drive the need for the solution and applications. Often, it is learned that there is a significant gap between what is required to satisfy the true needs of the major stakeholders versus what the project sponsor - usually someone in a management position - sees as the needs.
Before undertaking implementation, an organization must be internally synchronized and in agreement; otherwise, the resultant solution will satisfy the sponsor but fall short of satisfying the organizational needs, or vice versa.
In addition, in many cases, the management sponsor comes to the table with a set of preconceived notions based on budget constraints or previous life experiences that drive software and hardware preferences. These preferences are not necessarily reflective of the best hardware and software to optimally implement the solution. When tallying the true cost of implementation, these preferences must be taken into account as well. Issues resulting from these preferences may involve securing knowledge capital that is not currently available in the organization or cost overruns because the selected vendor or hardware alternatives may not support a key feature upon which the original purchase decision was based.
A defense contractor selected a BI tool because of its ability to interact with the Oracle database containing 850M rows of data required to build the cube. The implementer did not take into account the additional hardware needs of the selected solution. Also ignored was the fact funding for additional hardware was not available; therefore, all of the servers and tools as well as the Oracle database were forced to reside on the one server machine. The resulting cube build took many hours and locked users out of the Oracle database because two very memory- and CPU-intensive processes - Oracle and the cube-building software - were constantly competing for existing resources. The application created the required results, but not in a reasonable time frame to be useful or meaningful because it failed to meet the operational processing window.
Vendor Assessment During Sales Cycle
Everyone who has ever undertaken the purchase of a technical solution dreads the vendor meetings. Everyone has seen the television ads where the software vendor wants to know how many units of his product you want to buy. Therefore, the real question is: "How many meetings with a sales rep does it take to drive a customer crazy?" BI/BPM solutions invariably involve long, complex sales cycles involving several meetings and innumerable phone conversations just to narrow the list of final vendors to a manageable number. Then, the meetings with the finalists begin anew; only now, they involve significantly more resources from your company - IT support personnel, business users, project managers and project sponsors. Additionally, the vendors now bring a team to convince you that their solution is the one that will be the cure for all the organizational ills you are suffering - "Tell me, what is your pain?"
Now we have a roomful of people, all with different agendas, different needs and different goals, listening to what the solution is going to do for them. It is not at all uncommon for all these people to interact, make elaborate presentations, converse, ponder and cajole -- all the while not one person really listening to anyone else in the meeting. Often, the end result is a diverse set of requirements detailing what the client needs and a client with a diverse understanding of what the vendor solution really does.
Once the finalists are selected, the first step must be to ensure that a common vocabulary and set of definitions is established and understood by all the participants and stakeholders. To use a vehicle purchase example, you want to ensure that the model selected meets all of the needs of the family. Not taking the time to force an enterprise-wide consensus will get the mother of three a two-seater sports car instead of the required SUV or van.
For instance, you meet with your vendor and are presented with a "reporting solution that will satisfy your management reports." What does this really mean? From some vendors, this means, "I have a batch report writer that makes Excel look pretty." From others, it may mean, "I can implement a total infrastructure to take your financial data into my proprietary data mart environment and provide a custom Web-based reporting engine on top of the data mart." Be clear, and decide if you need to purchase the Yugo or the Porsche (so to speak). And, once you decide on the vehicle, make sure you walk into the correct dealership with your check.
Complicating the situation are the inevitable misunderstandings that occur when the sales tactics commonly employed come into play. The sales rep has heard what you said, assessed your pain and is going to push to convince you that the proposed solution solves all of your problems. A key step to avoid unanticipated costs is to listen and question the vendor to ensure understanding of your current and future requirements and to compare these to your understanding and force resolution of the gap.
In addition, remember that because sales reps are in a competitive environment -- they will attempt to shortcut the investigative discussions of the process and jump straight to the close. When this occurs, it is likely that key pieces of information will be lost or neglected when the deal is priced for the all-important final proposal. While the proposed solution may be fully functional and meet the entire spectrum of users' business requirements, it is not likely that all of the key success factors will have been included in the proposal, making the likelihood of cost overruns significant.
During a recent project, the sales rep had a limited window of opportunity to close business with a large manufacturing company. The rep's perception was that the sale was a close race between himself and another vendor. While each vendor provided a solution for the business problem, the solutions greatly differed in complexity and capabilities. Rather than heeding the client's assertion that price was not going to be the sole deciding factor and presenting the true requirements for a realistic and representative solution, the rep priced the solution to directly compete only on price.
The resulting proposal was presented as a realistic estimate of the implementation services required for the client's solution. The proposal called for a total of $15,000 in services costs. When the winning vendor's implementation team conducted the initial detail design meeting, it became evident that the implementation cost for services was closer to $200,000 in services.
After several uncomfortable conversations with many levels of client management, a compromise between services costs and final deliverables resulted. In this case, the client was willing and able to marginally increase the budget to support the additional services required to perform a realistic implementation. In most cases, however, implementation budgets are requested once and are then set in stone once the sales proposal is formally presented to the project sponsorship. Be aware that as the client, you need to make sure that you've disclosed all pertinent facts and relevant information. There is a significant time and effort expense in vendor selection, and once the implementation is in progress, changing or selecting a new vendor is neither practical nor reasonable. Vendors understand this, and as the buyer, you must understand this as well. The difference between the quoted solution and the reality of the required infrastructure needed to support the solution can be sizeable and so can the cost overruns.
It's Your Data
Perhaps one of the most unanticipated and devastating hidden costs in a BI/BPM project revolves around data integration and project requirements having data dependencies. Because you use your information on a daily basis, you are the "data expert," and you make basic assumptions that your data is available and can be extracted as needed and required. Assuming that a vendor understands all the ins and outs of your data infrastructure can be a very expensive mistake. It is imperative that the person coordinating the implementation of your BI/BPM project either has first-hand knowledge of your data or has access to subject matter experts (SMEs) who understand your data infrastructure.
This rates as one of the most misunderstood and underestimated areas of BI/BPM implementations. During the sales cycle, the sales rep is fixated on making the sale and, therefore, focuses on product functionality and how the tools of the proposed solution solve your high-level business problems. Details such as where the information to feed the solution will come from are discussed at a high level but not to the detailed level required to make an adequate estimate of the effort required for successful data mobilization. Sales reps are focused on keeping the initial cost of their solution down to make it the best and least costly, and anything that might muddy the waters is put on the back burner.
You may ask: "Does your tool work with a relational database?" And the truthful answer is, "Yes, it does." In a recent project, the implementation team came into a large manufacturer that had their data in a relational format. The catch was that the data required for the financial analysis resided in more than 40 different relational systems. No one took into account that the tool could only interact with one relational source at a time and that a whole data mart structure would be required to cleanse, hold and integrate the information. Luckily, each of the relational structures was built using the same schema and that the data storage rules were relatively consistent; otherwise, the resulting cost overrun would have been significantly more than the additional $150,000 required for completion.
Another issue revolves around understanding what your data is and how your data is created. A recent implementation for a large funds clearing client had a requirement that changes and new records to the database be identified and processed to model daily investment changes. The third-party company that housed and maintained the operational mainframe database extracted the entire data set every night and provided it to the client. The extract and build process would then rebuild from scratch the in-house SQL data repository, which was the underlying source for the analysis cubes. Short of checking each of the more than 25 million records in the extract file with the previous night's database, there was no reasonable way to check what records had been changed, which data elements were updated or what records were added or deleted from the previous day. The result was that the project had dependencies on an analytical requirement that the data set didn't support, and new tools or additional effort were required to support the project. The identified tools and effort required would have cost more than the enterprise's budgets could support, and the project was deferred thus significantly delaying any strategic improvement in data analysis for an entire budget cycle.
What's the Pain and What's the Gain?
If what you've read so far has discouraged your desire to undertake a BI/BPM implementation, understand that the benefits you can derive from such a project far outweigh the negatives. Unfortunately, the competitive nature of the sales cycle and the zealousness of the sales force play a significant role in these projects and it is up to you, the client, to ensure that your interests, goals and objectives are protected during these projects.
A BI/BPM project requires a significant time investment during the selection process and during the project definition. These projects must be run with the same care and attention to detail that any other significant corporate undertaking requires. Additionally, even if you outsource, the brunt of project definition lies with you. Before undertaking an implementation, you should have clear and distinct objectives. By implementation time, you should have identified and quantified all the obstacles to success and conduct a detailed risk analysis.
You should also have a firm set of evaluation criteria defining features as necessary or desirable. Most important, you must have a solid understanding of your total infrastructure because these implementations have a way of touching and affecting every part your organization. From these key pieces of information, you should compose a detailed set of questions designed to uncover any hidden requirements - software, hardware, product revision level dependencies, data formats, etc. - that the proposed solutions may impose. You should also solicit from the vendor a detailed mitigation process for all of the identified risks.
Keys to Succeeding
The key to successful, on-time and within budget implementations with BI/BPM is understanding how the vendor's solutions work and how they will interact with your environment. Only you can determine what the best solution is for your situation, and a tool that has very desirable features but is not a good fit for your environment is going to cost you during implementation because you will have to significantly modify the way you are currently doing business - and, as we all know, organizational change is the most difficult and costly part of any implementation, especially when it is unplanned and unaccounted for during the project planning. Understanding and matching solution requirements with your infrastructure will allow you to create a gap analysis to which you can assign an actual dollar value and that will serve as part of the project cost evaluation.
When you do decide to embark on a BI/BPM implementation, be sure to start the process with a short "strategic assessment" of your organization and your business needs. This assessment will aid in the definition of the short- and long-term business goals for your company, identify the required and desired product specification, and ensure the solution decided upon will grow with your organization. By keeping all of the intangibles in mind throughout the project inception, project definition, product selection and sales cycles, and the life of the implementation itself, you will be better able to identify the project deliverables, quantify the actual projected tangible and intangible implementation costs, and control cost overruns during the implementation.
While there are many pitfalls that can derail an on-time, on budget BI/BPM implementation, enterprises should not be afraid to move forward. The derived benefits and increased capabilities that these tools and applications provide can prove invaluable for strategic planning and facilitate significant growth and profit enhancement.
As with any project, the real key is a detailed, well thought out implementation strategy that has a firm technical foundation and the proper support levels from the management team. Even more so than with other projects, which tend to be more forgiving, the BI/BPM project must have clearly defined objectives and goals that are measurable and carefully monitored. Deviation from the original plan during implementation can be extremely costly and provide undesired results.
Ensuring success involves understanding what you want to do and communicating those goals to the implementation team in a clear, concise and detailed manner. Monitoring the team to ensure that the progress is in line with the expected results is imperative. These applications involve complex data movement, retrieval and manipulation; and without a vigilant eye, the outcomes will produce an application that produces very different results than those expected. Never is the expression "time is money" truer than with these implementations. They do not lend themselves to piecemeal methodology because creation of the analytical cubes can involve long calculation and run times.
Watch out for the pitfalls that have been discussed and remember to involve key personnel so that the knowledge capital amassed during implementation can be reused as additional needs arise. Learning the peculiarities and requirements of the selected tools will allow creation of efficient and useful applications that will grow with your enterprise and give you the competitive advantage that drove the enterprise decisions to select and move forward with the BI/BPM toolset. A BI/BPM solution represents a significant investment in time and money, and as with any other corporate asset, you need to preserve and protect it to maximize your gain with as little pain as possible.
In short, be in control, be firm, be smart and be practical. You are the client, and you have a right to demand full accountability -- but only if you have done your part. A half implemented BI/BPM solution leaves you no better off than no solution at all.
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