Using business intelligence to drive performance through accuracy in insight

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P E R F O R M A N C E & T E C H N O LO G Y

Using business

intelligence to drive performance through accuracy in insight

A DV I S O RY

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terabytes of data or spanning multiple geographies – it can still lack business value. BI tools that efficiently process and deliver vast amounts of data often fail to produce actionable insights, making it all too easy to focus on the wrong information.

©2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other

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Using business intelligence to drive performance through accuracy in insight 1

The problem is one of accuracy and lack of insight. All too-many BI tools make it easy to focus on the wrong things and draw the wrong conclusions. By one estimate, 70 percent of companies use BI metrics that aren’t reliable or statistically valid*. BI has yet to completely displace the spreadsheet, a 30-year old technology.

The Issue

When aligned with business goals and well executed, BI enables an organization to harness performance drivers and risk and to make better, more timely decisions. Used effectively, BI provides insight into many facets of a business – from financials to customer satisfaction, from supply chain efficiency to marketing and sales performance.

The result: increased control, greater responsiveness, and better performance.

That’s the goal. Yet today, decades after the first spreadsheet transformed the way we do business, BI remains beset with limitations. Managers find

themselves without the information they need – and often don’t realize that their current BI tool is the culprit.

Running a business and effectively competing in the marketplace demands timely, reliable, and relevant insights. And while Business Intelligence (BI) emerged as one of the most promising answers to this longstanding need, delivering on its promise remains a challenge, despite significant investments by many organizations.

Costly, difficult-to-use systems; siloed, hard-to-access data; confusing, indecipherable metrics; and a

dependence on over-burdened resources are just part of the story. A more critical issue is poor alignment between the dynamics that drive a business and the underlying analytical models employed by BI solutions.

Even when a BI implementation represents a significant technical achievement – processing terabytes of data or spanning multiple geographies – it can still lack business value. BI tools that efficiently process and deliver vast amounts of data often fail to produce actionable insights, making it all too easy to focus on the wrong information.

Frequently, managers are left perplexed by forecasts that fail to materialize, penalized for acting on incomplete or inaccurate information, or paralyzed by a lack of confidence. In response, they turn to spreadsheets – the same spreadsheets their BI solution was intended to eliminate. This only exacerbates the problem by creating separately controlled domains of knowledge and choking off the flow of information.

* “Coming Up Short on Non Financial Performance Measurement,” Ittner and Larcker, Harvard Business Review, 11/03

©2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

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Case Study: Introducing a new governance model to increase productivity

Amajorautomotivedistributor neededtoreducespreadsheet proliferationanddecrease decisionerrors.KPMG’sBI professionalsstructuredamulti- phasedprogram,building towardthegoalofintegrated andefficientreportingwith transparentgovernancethat

hasaprojectedROIof

US$6.2millionoverthreeyears.

KPMGAdvisorypracticebelievesit’s imperativetoshiftthefocusbeyondthe efficientdeliveryofinformation–a technology-centrictacticalapproach–

andmovetowardaccuracyininsight–a strategicapproachthatplacesgreater emphasisontheinformationitself.

OurBIservicessupportyoureffortsto:

• Defineandutilizethosemetricswith thegreatestimpactonbusiness performance

• Identifythefactorsandsourcesof dataandinformationthatcanuniquely driveyourorganization’ssuccess

• Recognize,filter,andextractvalueout offinancialandoperationaldatato makebetter,moretimelydecisions acrosssignificantaspectsofyour business

• Provideeachbusinessunitwithits ownviewofthedatathattrulyworks foritsneeds

• Advanceacultureofdecisionmaking thatmakesuseoftheinformation andanalytics

Withoutcompleteconfidenceinthe underlyingdata,assumptions,processes, models,andbusinesscontext,youcan’t haveconfidenceintheresults.Youshould besureyou’relookingintherightplace toachieveaccuracyinyourinsights.

Howwecanhelp

KPMG’sBusinessIntelligenceservices canhelpyoutransformyour

organization’sinformationand intelligencecapabilities,whetheryou havebusiness-focusedstrategicissues, technicalimplementationneeds,ora mixofrequirements.

BI/business strategy alignment Businessstrategyalignmentisthe linchpintoBIsuccess.Asolidapproach isonethat’sdesignedtosupportoverall organizationalgoalsandstrategies.It’s imperativethatanyBIapproachlinks measurestooutcomes,yetthiskindof alignmenthasprovedtobethe

stumblingblockformanyorganizations.

KPMG’sBusinessIntelligence professionalscanassistyouwith linkingyourBIsolutiontoyourstrategy, enhancingorcreatingtherightKey PerformanceIndicator(KPI)standards tobetterdeterminethepathto successandevaluateprogresstoward yourvisionofthefuture.Wecanhelp youdiagnoseproblemsthatcanlead

togapsinvisibilityandcontrol.

Value creation

Anyorganizationhasahostof opportunitieslockedwithinitsexisting information.

Butwithouttherightconnections betweensiloeddatasources,itisdifficult toidentifythosepossibilities.Wecan helpyoureduceinformationoverloadand establishacultureofinformeddecision making.Theimplementationofabetter governancemodelcaneliminate surprisesandallowyoutotrustyour decisions.Revenue-generating

opportunitiesbecomeeasiertoidentify, asdowaystolowercostsandincrease operationalefficiencies.Riskis

harnessedbytyingittoperformance.

Ratherthanacostlydistraction, compliancerequirementscanbeturned intoanopportunityandaninvestmentin thebusiness.

Proficient, precise and pragmatic execution

TacklingBIproblemsisadaunting challengeformanyorganizations.The arrayofavailabletools,processissues andcompetingprioritiescanleaveany companypuzzledaboutwheretobegin.

Wehelpyouremovebothprocessand technologybarriersthatkeepinformation isolated,workingtowardsintegrated systemsthatincreasecapabilities, reducecostsandbringconsistencyto results.Experiencedprofessionalsfrom KPMG’sBusinessIntelligencepractice workwithyouasyouseektoselectthe righttoolsandtechnologiesandbuildan infrastructurethat’soptimizedtomeet yourneeds.

©2009KPMGInternational.KPMGInternationalisaSwisscooperative.MemberfirmsoftheKPMGnetworkofindependentfirmsareaffiliatedwithKPMG International.KPMGInternationalprovidesnoclientservices.NomemberfirmhasanyauthoritytoobligateorbindKPMGInternationaloranyother

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Using business intelligence to drive performance through accuracy in insight 3

Potential of existing BI investments realized

To achieve an integrated approach, frustrated organizations may feel that they must start over to achieve BI success. But this isn’t true. Existing investments in tools and processes need not be abandoned. KPMG’s BI

practitioners can help you identify issues that prevent your systems from delivering their expected value, whether from inconsistent linkages to business goals, organizational barriers or problems in design or implementation. Additionally, we can assist you in seeing not only what needs to change but help you determine how to change it.

What we offer

To help you realize the full value of BI, we have created a six-part BI framework that takes a broad approach to developing your strategy to meet your particular needs – whether leveraging existing investments or starting anew. Each service offering within the framework can be delivered individually or as part of an integrated package, based on your particular needs.

Business strategy alignment: The strategic foundation

These offerings help you establish the vision for BI and translate it into a framework that communicates and measures business strategy at all levels of the organization. Critical success factors are identified, and KPIs are defined to track each objective.

Governance: The guiding principles These offerings support you in designing a governance structure that includes a clear articulation of the roles and responsibilities for BI. You can establish principles, processes and the organization structure required to ensure integrity and alignment of information to meet business needs.

Performance management process and reporting: The pivot point

A framework is built for business-unit and enterprise-level performance

management based on four key steps:

measurement, performance reporting reviews, tracking and remediation, and rewards and compensation. These offerings focus on the delivery of information that can change business performance outcomes.

Integrated information management:

The lexicon and blueprint

These offerings deliver an architecture and process for integrating business, process, and functional measures through master data management and KPI standardization, including data cleansing and Extract, Transform, and Load (ETL) design.

BI platform: The looking glass These services provide the linkage between the data dictionaries and business reporting requirements by designing the visual and functional aspects of reporting dashboards. Where applicable, BI tools are evaluated and recommendations provided.

Infrastructure: The toolkit

A complete assessment of current hardware and software infrastructure is conducted. These services assist you in developing enterprise standards for infrastructure, security, metadata capture, and data accessibility.

How we’re different

KPMG’s Business Intelligence

professionals apply the same principles and techniques to BI that are applied to all engagements. It’s a fact-based approach. We don’t assume that your challenges are like everyone else’s nor do we apply cookie-cutter strategies to address problems.

Case Study: Articulating a clear information management strategy

An international brewery business was undergoing an extensive transformation of its back office functions – finance, HR and procurement. KPMG’s Business Intelligence

practitioners helped them develop an information strategy and a BI architecture that allowed them to reduce 30 ERP instances to one. This, in turn, has reduced report duplication, provided better data transparency, and increased the speed at which they get information.

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We draw from deep industry experience and understanding of business issues and BI technologies.

We bring diverse teams of KPMG member firm professionals who specialize in functional areas such as information technology, business process, governance, change management, master data management and many others.

We tailor the project team by carefully selecting professionals with specialties that match your unique circumstances.

KPMG member firm professionals can access a broad set of competencies and experience in accounting, tax, regulatory issues, transaction services, forensics, compliance, and financial risk.

We have experience across a wide range of standards, technologies and vendors. We’re impartial and objective, with the freedom to help you select the right options for you.

Our only interest is defining and deploying an effective and efficient BI solution that meets your needs – not ours or a third-party vendor’s.

We employ a collaborative and team- oriented work style, an approach that helps you maintain the appropriate leadership and involvement and promotes the transfer of knowledge back to the appropriate personnel in your organization.

And we’re truly global. With KPMG member firms in 144 countries, we have global breadth and local-market knowledge of business conditions and capabilities; a broad understanding of the issues that impact specific industries; and experience with the legal and regulatory requirements affecting business processes and information technology.

Our goal is to help you realize the true economic and business value of your information assets. We understand that leveraging information to maximize business value is a strategic imperative and a competitive necessity today.

Case Study: Improving existing BI system performance and value

A large energy company was experiencing long and inconsistent planning and forecasting cycles partially as a result of poorly configured planning technology.

KPMG’s Business Intelligence professionals helped them reduce data and system proliferation by decreasing the total number of applications by more than 50 percent and the total number of reports from over 700 to less than 125. With this significant reduction in application complexity, support hours were reduced by 15 percent and their planning cycles are five days shorter.

©2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other

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For more information, please contact:

Global

Jeanne Edwards Johnson Principal

Advisory Services

KPMG in the United States Office: 212-872-5570 Mobile: 704-661-1605 [email protected]

Americas U.S.A.

Linda Imonti Principal

Advisory Services

KPMG in the United States Office: 312-665-2913 Mobile: 312-972-2649 [email protected]

Canada Paul Curitz Associate Partner Advisory Services KPMG in Canada Office: 416-777-3397 [email protected]

EMA

Steve Gallagher Partner

Advisory Services

KPMG in the United Kingdom Office: +44 (20) 73113881 [email protected]

Herman Heyns Partner

Advisory Services

KPMG in the United Kingdom Office: +44 (20) 73114478 Mobile: +44 7775822674 [email protected]

Bernd Trautwein Partner

Advisory Services KPMG in Germany Office: +49 (89) 9282-1825 Mobile: +49 (172) 8519788 [email protected]

ASPAC Wah Lee Ho Executive Director Advisory Services KPMG in Singapore Office: +65 (6411) 8008 Mobile: +65 9748 1398 [email protected]

Simon Martin Partner

Advisory Services KPMG in Australia Office: +61 2 9335 7415 Mobile: +61 401 718 171 [email protected]

Randy Wong Director

Advisory Services KPMG in Australia Office: +61 (2) 9335 8046 Mobile: +61 424 140 728 [email protected]

KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Document code: AD085 The information contained herein is of a general nature and is not intended to address the circumstances

of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate profes- sional advice after a thorough examination of the particular situation.

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