CFOs positioned to drive BI integration: two major CFO challenges--improving performance management and improving access to information--can be achieved through seven keys for creating value that link initiatives enterprisewide.

CFOs and finance organizations have historically been stewards of data and information. Indeed, nearly 70 percent of the respondents to an IBM CFO survey viewed information as a major asset justifying significant investment, and nearly as many (64 percent) believed that they could manage information better. Thus, information is viewed as a critical, yet underutilized corporate asset.

In the same survey, CFOs ranked "improving performance management" as their top opportunity and challenge (see figure 1). "Improving access to information"--which is tightly linked to improving performance management--is also a significant concern.

Moreover, CFOs expect to continue to shift their workload away from transactional activities, which will be increasingly automated or outsourced, toward decision support and performance management, thus providing much greater value to their organizations. Yet, their enterprises continue to struggle to glean insight from an abundance of data.

Managing data and information is improved by technology. So, in recent years, organizations have invested heavily in business intelligence (BI) initiatives, but many are not realizing the anticipated benefits. Lured by the promise of enhanced business performance, many are mired in a fragmented, overgrown BI environment and frustrated by lackluster results.

As a consequence, these organizations still face the challenges that triggered their initial BI investments, including inconsistent data, impaired visibility, data redundancy, information overload and delayed delivery of information. Too often, the benefits from BI initiatives are not quantified or articulated. What's more, BI efforts may not be aligned with an organization's objectives or individuals' roles.

Though many organizations have diligently laid the initial groundwork, their BI initiatives lack a common framework. Typically, there are gaps in relating information to decisions/actions, a lack of overarching methodology and disparate approaches to discover and measure the value of BI initiatives.

Another IBM survey of finance professionals shows a mere 9 percent rated themselves "excellent" at gathering, interpreting and conveying information in a way that drives profits. Contributing further to this problem, 50 percent stated that, while information is plentiful, it is not focused, relevant or suitable for taking action.

Clearly, CFOs and finance organizations are wrestling with how to generate more value from the fragmented information their organizations generate. Simply put, how can they create more value through their BI initiatives?

The Journey to Creating BI Value

Given the advances in BI methods and technology and related previous investments, many organizations are poised to achieve the level of capability maturity necessary to extract enhanced value. To reach this level, they need to embark on a deliberate journey that consists of seven keys.

1. Apply BI governance for better BI management. BI governance is a discipline of efficiency, effectiveness and control--managing information as an asset, not just to provide visibility into past operations, but to provide a future vision to guide an organization's strategic decision-making.

BI governance affords the authority to establish, direct and monitor the making of policy surrounding BI data, technologies and processes. Because BI governance helps provide visibility into the organization, it raises awareness of the capabilities and impact of BI activities.

Not until these capabilities are understood and harnessed can information be linked to action across the enterprise, enabling people to take the right action at the right time. Common pain points include streamlining tools and technologies, streamlining key performance indicators and creating enterprise data standards. This requires a different level of management and governance of information resources than most organizations have experienced.

To turn their data into usable information, organizations need to embed analytics into BI data, technologies and processes. They also should provide controls for the use of information and verify the information is available when and where needed.

2. Establish BI sponsors. Executive-level commitment is a "must-have" to verify corporate buy-in at the highest levels. Additional BI sponsors should be established to help guide, promote and unite BI efforts.

BI sponsorship also can provide confidence that information resources are being used to support the overall corporate strategy. Executives can confirm that the top-most measures align with strategy, as well as with measures used for reporting and accountability.

An organized BI program is critical to unite companywide BI efforts. Those with localized programs created to serve single departments lack an enterprise view, resulting in fragmented BI efforts, wasteful spending and redundant or inconsistent information.

Without a defined management structure, combining the silos of information from a single department can be a challenge, and attempting to integrate information across an entire organization can be monumental. Therefore, companywide BI sponsorship is critical to enable improved coordination of BI activities and to facilitate delivery of a single message.

With increased BI sponsorship, firms have achieved a new level of visibility into the amount of corporate BI "spend," and identified clear opportunities to optimize resources across initiatives.

3. Define/Refine your vision. Articulating a vision--in terms of the behavioral changes enabled--is vital. Intelligence is worth nothing unless it is acted upon. A well-defined vision will help encourage role-based intelligence, create an aligned, accountable culture and enable better decisions faster. In today's competitive environment, an expanded knowledge base allows companies to anticipate future events and trends.

The focus thus moves from the information itself to what people can do with the information to improve performance and enhance value. Such value might include improved customer satisfaction and relations, more intelligent marketing and increased sales.

It is important to leverage forward-looking measures to anticipate and shape future trends, versus using a traditional, rearview-mirror approach. Aligning performance metrics and relevant analytics can provide individuals at all levels with the insight and empowerment to make better decisions to positively impact company performance. To deliver on this vision, organizations need to develop capabilities in the areas of data management, integrated technologies, organizational change and business process.

4. Establish a common integrated enterprisewide BI framework. A common BI framework is essentially a shared "point of view" and taxonomy to reduce project delays stemming from a lack of understanding or ambiguous language. Such a framework helps to avoid fragmented efforts and redundancy among projects, encompassing data, tools/technology and people/process/organization.

Given the evolution of BI within organizations, there often are varying definitions and approaches in the company regarding how to address BI needs and solutions. To help ensure consistency among stakeholders and facilitate progress, an enterprisewide BI framework supports the basic building blocks of planning, managing, analyzing and adapting the business via several elements:

Common language: Accelerates cycle time from concept to reality because common definitions support better communication among organizations, stakeholders, partners and vendors.

Strategy: Describes the organization's vision regarding performance management, governance, management reporting, integrated analytics, information management and solution architecture.

Roadmap: Defines the path toward the vision outlined in the BI strategy, addressing core capabilities required to succeed, and helps ensure that strategy, process, data, technology and organizational work efforts are addressed in parallel.

5. Manage data as a corporate asset. It is no secret that quality, timely data is critically important to the success of a BI program. However, most organizations fail to truly manage data as an enterprisewide corporate asset, and confine it, instead, within a particular business unit or function.

With heightened scrutiny of regulatory compliance, information integrity affects all aspects of an organization, impacting external stakeholder relations and, ultimately, the bottom line. Poor data quality can lead to delayed decisions, crippled operations, expensive rework, diminishing sales and a tarnished business reputation.

Verifying consistent data company-wide can reduce redundancy and costs and also improve data quality. Many companies are undertaking "master data management" initiatives to address these challenges.

Mature organizations are moving to implement enterprise data management programs. The overwhelming majority of BI initiatives focus on data management. However, as the enterprise data management capabilities of an organization mature, efforts shift to activities such as analysis, interpretation and action planning.

6. Identify benefits and measure value. It is critical to BI success that an organization realizes benefits that are aligned with business objectives. Organizations will need methods to identify these benefits and measure value to facilitate the allocation of strategic funding.

With links established among BI initiatives and the business objectives, project managers can more easily articulate project ROI to stakeholders and end users. Being able to clearly communicate and demonstrate this value helps overcome resistance, fosters buy-in and creates demand for additional BI initiatives.

Before embarking on the integration of existing or new BI initiatives, teams should seek to identify potential benefits through building a benefits case with agreed-upon metrics. To measure value, organizations should embed benefit realization tracking into their teams' activities and should assign accountability for delivering benefits through individual and team performance measures.

7. Organize for success. To help ensure success of BI transformation initiatives, organizations should establish a comprehensive change program. This may be difficult without organized efforts to smooth the way, as people are naturally resistant to and fearful of change.

Incentives that are aligned to the desired culture change will help encourage acceptance and use of the enhanced BI environment. Rewarding culture change helps avoid the natural tendency for resistance to cross-department BI initiatives, since a department that "owns" information is likely to resent "outside" efforts to change the status quo.

Activities geared toward changing organizational culture should be formal--planned and funded as part of the investment in BI implementations. Leveraging executive sponsors to spread the word in a structured, top-down manner communicates the importance and value of BI transformation for the entire organization.

Starting the BI Journey

Organizations can use the seven keys above to unlock the value in their BI investments and recharge their enterprises. Moving toward BI integration and governance should be viewed as an ongoing journey. Setting short-term, mid-term and long-term BI goals along the way should help verify that goals are aligned with business strategy and strategic objectives.

Organizations can gain momentum by using a phased approach to achieve quick wins, then building on those successes to gain further support of BI initiatives. It's better to concentrate on achieving local successes that can be extended rather than trying to create a global system all at once.

Additionally, organizations with mature BI environments should experiment with their BI transformation initiatives and take calculated risks, as better BI is as much an art as a science. This experimentation might include building predictive models and applying new analytical techniques to squeeze incremental uplifts in business performance. Leading organizations will remain flexible in their funding and designate sufficient funds to explore promising hypotheses as part of their ongoing BI transformation efforts.

As a steward of financial and, increasingly, nonfinancial information, finance is a natural stakeholder in the success of enterprise BI efforts. In their role as strategic partners to the C-suite, CFOs should look to excel at gathering, interpreting and conveying information in a way that drives profits. And, as the nexus of business strategy, process and information, CFOs and finance organizations are uniquely positioned to be key sponsors in driving the BI integration journey.

The three co-authors are all with IBM Business Consulting Services (www.ibm.com/services). Stephen B. Rogers ([e-mail]) is a Managing Consultant, responsible for conducting research on a variety of financial management topics for IBM's Institute for Business Value. Karen D. McDonald ([e-mail]) is a Managing Consultant in the Strategy and Change practice and Valerie A. Brown ([e-mail]) is the Global Business Intelligence Program Director.

RELATED ARTICLE: takeaways

* As the stewards of data and information, CFOs view information as a major corporate asset, yet believe they could manage information better.

* Frequently with business intelligence (BI) initiatives, the benefits are not quantified or aligned with an organization's objectives or individuals' roles.

* A process of seven keys can help organizations achieve the level of capability and maturity necessary to extract enhanced value from their BI investments.

* Along the way, companies should set short-, mid- and long-term BI goals to verify that their goals are aligned with business strategy and objectives.

Figure 1. Top five challenges in delivering objectives and meeting the
needs of the business, by percent.

Improving performance management                 52
Improving governance, controls, risk management  43
Improving competencies/skills                    42
Improving planning/forecasting and budgeting     42
Improving access to appropriate information      38

Source: IBM Business Consulting Services 2003 Global CFO Survey.

Note: Table made from bar graph.