You've often heard the expression: "It takes money to make money." Unfortunately, that saying holds true for reaping value from IT investments. I recently had a discussion with the CIO of a large global company, and he told me that his company was spending $80 million annually on its enterprise reporting function alone. For some very large companies, the figure could easily surpass $100 million.
What triggers these massive expenditures? Common cost-inflation issues I've encountered include nonintegrated source systems used for enterprise reporting and the lack of a common interface for accessing critical information. These two issues often lead to inconsistent information and the inability to glean a single version of the truth about enterprise performance, which, in turn, can require companies to spend millions of dollars on information reconciliation efforts.
Other problems can include bloated reporting structures that require too many resources to support as well as a morass of reporting and BI applications that all have roughly similar functions. These can lead to inefficient utilization of organizational resources and redundancies in operations that can burn through money rapidly - a problem that most companies just can't afford.
With all those precious IT dollars at stake, I believe it is absolutely essential that companies recognize what they truly spend on IT - especially when it comes to BI initiatives. One good way to help accomplish this goal is to conduct a reporting environment and data architecture (RDA) assessment. The RDA assessment comprises an examination of four key processes: data acquisition, report generation, report delivery and information consumption.
The examination of the data acquisition process has two key components: 1) an analysis of the source systems that feed reports and 2) the filters, or business rules, applied to that data before it is loaded into intermediate data stores such as repositories or data marts. The data acquisition process looks at components of the data architecture, such as systems integration, information assets, the enterprise data model and business rule categories, to help determine how data is organized, collected and stored across the enterprise.
The second process, report generation, focuses first on intermediate data stores, such as repositories, data marts and data warehouses, and then on reporting groups and applications. Initially, the analysis focuses on identifying data dimensions, facts and subject areas as well as transformation and loading mechanisms and data model characteristics. Then, the focus changes to include a census of reporting tools and technologies, metrics and report types supported, resources needed to support report generation and the actual number of reports generated.
The report delivery process analysis is an examination of the tools, technologies, delivery mechanisms and delivery formats used to put information in the hands of end users. It is focused on both uncovering redundancies and variations in information delivery and determining which tools and technologies are functioning effectively - and which are not.
The analysis of the process by which information is consumed is somewhat more intangible than the other three analyses, but nevertheless, I believe it is very critical to better understand the flow of enterprise information. This analysis focuses on determining usage levels, types of users and numbers of users of reports generated by enterprise information systems.
The RDA assessment is quantitative in nature. It should help determine and document actual numbers of systems, subject areas, dimensions, report types, applications, metrics and reports. Why? Simply because you are only able to derive tangible costs with quantitative information.
If you know how many source systems, subject areas, dimensions, reports, resources and users you have, you can apply costing models to that information to help determine how much it actually costs to produce needed information. You can also take the cost analysis a step further and better determine, based on the RDA assessment, just how much money you're spending on inefficient or redundant systems, processes and reports.
I can't predict what you'll find when you conduct your RDA assessment, but I can tell you this: you'll be surprised by what you're spending, but you'll also have the information you need to help you begin reducing the redundancies, inefficiencies and operational variations that produce the high-cost number.
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