building the business case for business intelligence and ... · confidential and proprietary 2...

Building the Business Case for

Business Intelligence and Analytics

DiscussionSeptember 11, 2009

2Confidential and Proprietary

Agenda

• Changing the business

• Finding business value– Example: Understanding Customer Behavior

• Beyond simple financial metrics – (ROI, IRR, NPV)

– Credible value added methods

• Building the business case– Relevant

– Authoritative

– The “Sticky“ or defensible position

• Ten essential elements you will need

• Sample method (example)


Changing the Business

• People, not Technology

• Process, not Project

• Value, not Cost

• Insight, not Data (Data ≠ Information)

• “Yes you can…”


Changing the BusinessUnderstanding key concepts

People - Insight and Visibility Throughout an Organization

Customer support repCustomer support rep

“I need better access to information to make better decisions on cross-sell and up-sell opportunities.”

“I need to have the right demographic information so I can better target my opportunity prospecting.”

Sales repSales rep

Chief executive officer (CEO)Chief executive officer (CEO)

““I need to know that the people in my I need to know that the people in my organization have the right goals in place organization have the right goals in place to understand to understand and execute on the execute on the strategic initiatives of the company.strategic initiatives of the company.””

VP, operationsVP, operations

“I need better visibility into my cost of operations so I can target specific cost reduction opportunities that won’t have a negative impact.”

Chief financial officer (CFO)Chief financial officer (CFO)

““I need to improve our analytics I need to improve our analytics capabilities so we so we can understand our current business performance can understand our current business performance and do a better job of planning for the future.and do a better job of planning for the future.””

Source: “Creating the Office of Strategy Management” by Robert Kaplan and David P. Norton, Harvard Business School, April 2005

VP, sales and marketingVP, sales and marketing

“I need better visibility into our pipeline performance so I can focus on deals that help me grow business with my most profitable customers.”

Gross Margin?Profit Margin (EBIT, EBITDA, NOPAT)?Operating Expenses?Asset Turnover?Working Capital Management?GMROI?Actual Employee Turnover Costs?

Debt to Asset Ratios?Debt to Capitalization?Interest Coverage?Burden Coverage?Cash Flow? Cash Flow / Share?Return on Total Net Worth?Return on Common Equity?

Earnings Per Share?Share Prices Appreciation?Dividends Per Share?Price to Earning Ratio?Market Book Value?Value Drivers?

Our Market Share?Effectiveness of Campaigns?Selling Together?Not Selling Well?Selling in What Market?

My Customers?Their Competition?My Next Sales Opportunity?What is Selling Now?


People – What Is Needed

• Address the human-side systematically

• Obtain top level support

• Involve every layer

• Clearly communicate the business case

• Create ownership, install change agents

• Clearly and continually communicate the message

• Assess the cultural impacts and issues

• Prepare for the unexpected

• Define WIIFM (What's in it for me?) for each role or individual


33%

23%

77%

40%

36%

65%

8%

23%

Have significant decision-support/analytical

capabilities

Value Analytical insights to a very large extent

Have above average analytical capability within

industry

Use analytics across their entire organization

Source: Competing on Analytics, Thomas Davenport

Insight – The Competitive Edge

Low Performers

High Performers

High performing companies are more likely to use analytic information strategically


Think Process, Not Projects


Taking Action – Reducing Opportunity Costs


Value of Information

Information Management Life Cycle


Finding business valueQuantify and translate findings


Finding Business Value


Increasing Burden of Proof


Difficulty in Predicting Impact

Where the significant opportunities are found


What to Measure?


§ Reduced time to market

§ Reduced time to process orders, returns and change orders

§ Reduced time to respond to customer inquiries

§ Improved order accuracy

§ Improved accuracy of logistics information to enable faster and more specific order changes (lot, palette, store location, etc.)

Value Service x Quality

Time x Cost=

§ Reduced personnel time lost to manual processing and customer inquiries.

§ Reduced costs of transportation through improved use of capacity and routing

§ Reduction in inventory held and while achieving target customer service levels

§ Improved use of warehouse space through improved collaboration with customers

§ Increased timeliness and visibility into critical information

§ Improved accuracy on order changes and returns

§ Consistency of service

Delivering Business Value

The magic formula:Productivity = Value Created / Resources Consumed

§ Focus has been on denominatorProductivity = Value / (Resources – 15% Head Count) - Diminishing returns - Exclusive reliance on resource reduction is dangerous

§ Numerator is where significant opportunities existProductivity = Value Innovation / Resources- Difficult to quantify- Requires deep understanding of the business- Not subject to the hard constraints

Productivity

Align with business drivers

Findings - Sample Engagement

*Based on 2080 annual hours of available work. FTE Hourly Rate $50.00

Essential non-value added costs discovered during fieldwork …

Department

Knowledge

Workers

% Time

Gathering Annual Hrs Gathering *

Information Management 2.50 28% 1,456

Inventory Control 10.00 40% 8,320

Finance 10.00 90% 18,720

Purchasing 30.00 40% 24,960

Sales/Operations 244.00 20% 101,504

154,960

Translates to approximately $7,748,000 of spend annually on activity that could be redirected to creating

higher value-added work product…

0 20,000 40,000 60,000 80,000 100,000 120,000

Information Management

Inventory Control

Finance

Purchasing

Sales/Operations

Annual Hrs Used Gathering Data

for Analysis/Action


Finding business valueUsing customer as an example


• Fortune 500 companies lose 50% of customers in 5 years.

• It costs 7-10 times as much to acquire a new customer as it does to retain an existing customer.

• Long-term customers buy more, take less of a company’s time, and are less sensitive to price.

• A 5% increase in retention can increase profits 60-100%.

• Up to 50% of existing customer relationships are not profitable.

• The average company communicates 4 times per year with its customers and 6 times per year with its prospects

Understanding Customer Behavior

Sources:

1:1 marketing, inc., Yankee Research, Fred Reichheld, AMR Research study. NCDM, Direct Marketing Association (DMA)


Know the value of your Customers

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rev

enue

Per

Acc

oun

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id-T

o-W

in R

atio

Avg

Opp

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Dea

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Lead

Qu

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Rat

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Acq

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osts

(%

of

reve

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Mar

ket

Shar

e

Best In Class

Average

Laggards


Results - What this really means…

Source: Sales Intelligence, Aberdeen Group, January 2009

How organizations leverage sales intelligence to affect overall sales productivity (300 organizations, Oct-2008)

Classic business process improvement opportunity red flags:

§ Manual information processing steps

§ Information on paper (or in text format, e.g., e-mail)

§ Information stall points/bottlenecks

- Currency (Late Data) Reports or Files arrive late

§ Information update/notifications lags

- If you only knew then what you know now!

- Inaccurate Data - Facts are wrong or don't balance

§ Application focus – multiple hand-offs, duplicate processing

- Transformation Required Information in wrong media or format

- Incomplete Data - Not all data needed is there

§ Departmental silos (versus process focus)

- Not Shared - Someone else has but does not share

- Outside - Data resides outside department (or company)

Opportunities


More than Financial MetricsBeyond Simple ROI


Beyond Simple Financial Metrics

• Traditional financial metrics

– Return on Investment

– Internal Rate of Return

– Net Present Value

– Payback Period

• Value, yes but…

• Beyond simple ROI

– Business Value Index

– Total Economic Impact

– VAL-IT

– Applied Economics

“One of the key contributors to poor investment performance is an unbalanced approach taken by executives at the project approval stage. Too often, the overriding emphasis is on quick payback or demands for the return on investment (ROI) to be demonstrated in financial terms.”

Gartner, “Total Value of Opportunity — The Real Measure for BI”


Issues using simple financial metrics

• Many to choose from– Wide variety of measures in use (ROI, NPV, IRR, EVA, payback period)– Multiple interpretations, results in using different measures in the organization

• Imply a false precision that doesn’t exist– Creates a false sense of credibility; estimates based on assumptions – Accuracy is only as good as the underlying assumptions

• Often fail to account for intangible benefits– Investment provides both direct (tangible) and intangible benefits– Intangible benefits, (customer satisfaction) difficult to measure, often ignored completely

• Ignore Future opportunities (capability)– Investments can produce both immediate benefits and provide opportunities for future benefit Future opportunities to layer HR, supply chain, or provision infrastructure for a BI system extensions for additional systems

• Risk– Significantly underestimate risks or the fail to account for risk at all– Business case key assumption is the project will be delivered on budget – Risk estimates tend to be subjective and not consistently applied


Value, yes but… how about a little balance?

• Measure business value using both

– tangible and

– intangible benefits

• Measure efficiency impact to the organization

– How well a project complies or “fits”

– Are we gaining or improving new capability in the business?

• Measure financial attractiveness (Financial criteria)

– Clearly distinguish business value from financial value.

– Uses at least three financial metrics in determining financial attractiveness (NPV, IRR, and payback period)

• Measure and Adjust Findings for Risk

– Estimates translated into a range of potential outcomes

– Risk-adjusted costs and benefits used to communicate a risk-adjusted outcome measure (e.g. ROI)


Beyond Simple ROI

Value Methodologies Compared

Source: Forrester Research

• Business Value Index

• Total Economic Impact

• VAL-IT

• Applied Information Economics


Building the business caseTen essential elements…


Ten essential elements


Demonstrate the investment has value

§ Identify and quantify tangible and intangible benefits

§ Address the five essential elements every business leader understands and manages to on a daily basis:1) Cash Flow

2) Margin (profitability)

3) Velocity (cycle time compression)

4) Growth

5) Customer (responsiveness, intimacy, and alignment)

§ Address the investment decision and burden-of-proof1) Reduce Hard Costs

2) Improve Capacity (Knowledge Workers, Operations)

3) Lift Existing Revenue

4) Create New Revenue

5) Reduce Portfolio Risk


Identify all necessary components and services

§ Product Breakdown Structure § Software Components§ Production Support Services § Customization Projects§ Personnel (Professional Services)

§ Organization Breakdown Structure

§ Work Breakdown Structure§ High Level Value Add based activities


Estimate immediate and extended program costs

§ Identify immediate and extended costs of building and operating the new environment

§ Fixed, Variable

§ One-Time and Recurring

§ On-going operational expense (One-Time vs. Recurring Operational Costs)

§ Include supporting schedules§ Product Licensing and Support Services

§ Software Development and Customization

§ Personnel

§ Pass-Through or Third-Party

§ Travel (Ancillary)


Use a dynamic cost benefit analysis model

Source: Intel Corporation

Flexible and adaptive to changes in data driven assumptions and weighted criteria.


Forecast when the business realizes the benefits

730,470

2,605,757 2,634,261

2,276,403

1,406,871

2,177,759

0

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

1,750,000

2,000,000

2,250,000

2,500,000

2,750,000

3,000,000

2000

2001

2002

2003

2004

2005

Non-Discretionary Totals

Non-Cash Expenses

Totals

Discretionary Totals


Clearly define the approach and scope


Impact to the organization’s capability to deliver

Do not try to build a system whose complexity

exceeds the organization's capabilities


Describe how the program will be properly managed

Program Structure and GovernanceProgram Structure and Governance activities involve

the design and execution of how the program will be

directed, coordinated, and monitored. Key elements

include governance and program office structure,

oversight meetings and agenda definition, and role

and responsibility development.

Scope ControlScope must be closely linked with Work and

Resource Planning as both will be affected

by any changes to work efforts. Scope

control activities include: 1) Periodic Project

Team Meetings & Program-wide reviews, 2)

Monthly Steering Committee Meetings for

escalation of project issues, 3) Deliverables

based on orientation, and 4) Formal

Business Case required for Scope Changes.

Risk ManagementIdentifying and responding to potential events that

threaten program success. Key activities include:

1) Risk Identification – identify and categorize risks,

2) Risk Estimation – estimate the chance and

consequences of the risks, 3) Risk Planning – Plan

methods to control and mitigate risks, and

4) Risk Management – Control risk through

protection and monitor actual risks, contingency

execution, and refine plans as required.

Cost ManagementCost Management ensures that the program is

completed within the approved budget through

cost estimating and cost control processes.

There is also a tight linkage with planning

processes given changes in schedule and

resources will affect overall program budget.

Work Planning and SchedulingWork planning and scheduling activities involve

the development, communication, and

management of structured and integrated

program work plans.

Quality ManagementQuality Management ensures that

standards are developed and followed

that will be sued to evaluate and monitor

project performance.

Issue ManagementIssue Management ensures that issues are

identified, evaluated, resolved and

documented. Escalation mechanisms are

implemented in order to facilitate timely

decision making.


Projects are undertaken in the optimum sequence


Publish project charter to stakeholders

Table of contents

1. Executive summary

Background

2. Current business

Description/economics

3. Proposed project

Description/strategic fit

4. Options evaluation

5. Timescale and investment

analysis

6. Standard management practices

7. Appendices

Supporting material

• Analysis of benefits• Analysis of costs• Financial spreadsheet• Metrics – ROI, NPV, etc.

• Risk analysis and mitigation• Alignment• Project change mgmt• Quality assurance• Project finance• Reporting• Governance


Building Case DevelopmentSample Method


Program Method


Business Case Development


Business Case Development

Sa les Operations

RevenueAnalys is

Sales

ForecastM odel

Canc el lation

Analy sis

Dis connectAnaly sis

OperationAna ly sis

O rder In terv alAnaly sis

Head Count

Ana ly sis

Bi l led RevenueAnaly sis

Pene trationAnalys is

Bi ll i ngD is pu tes

Cred itsAna ly sis

Identi fy PotentialCus tom ers

As semb le Customer

Product Ma tri x

Sa les Orders &Custom er s Forecast

Products &

Equ ipment Fo rec as t

Sa lesPerfo rm ance /

Productivi ty

N etworkTopology

Analys is

Profi tab i li ty

Ana ly sis

Order EntryReso lution

Con test

Ana ly sis

Prom o & Specia lOffers Ana ly sis

Identi fy Sales RepCoun ts

N ew Order s Value

Forec as t

Booked & Bi lledR ev enue Forecast

Sa les Stati sti csForecas t

Bui lding Lev el

Pene trationAna lys is

M ark et Lev el

Bu ild ingPenetra tion

MobilePoint MobleGramH Q Server (NT)

BMS E-Mail S erver(C C Mail)

Sales Administrat ion(WI ndow s 95/ NT)

Market ing(WIndows 95/ NT)

Color ist Satis factionAdminis tration

(WI ndow s 95/ NT)

Salon D atabase Serv er(HP U nix , Oracle DB)

D ivision H eadquarters:

* Sales Adminis trators - 4 Developm ent, 12 Production

Field Sa les Force (Continental U .S.):- 6 Dis tric t Managers

- 66 Field Consultants

Et hernet

Field Cons ult ant(MobilePoint Devic e)

BMS I ntranet Serv er(FIrew al l)

Dis tr ict Field Sales Management(WI ndow s 95/ NT)

MobilePointA rchive

TelemarketingPac kage

SalonReporting

# 1 # 2

# 4

# 5 # 6 # 7

# 8 # 9 # 10

Corporat e S ales ManagementLapt op (W indow s 95)

# 3

Assessment Activ it ies Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7

1.0 Project Initiation

2.0 Document Initial Findings & Recommendations

2.1 Business Architecture Review

2.2 Information Analysis Architecture Review

2.3 Technical Architecture Review

2.4 Initital Data Stewardship Program

2.5 Organizational & Project Management Review

3.0 Develop Implementation Plan

4.0 Develop Final Report & Presentation

5.0 Conduct Presentation

M4

M2

M1

M3

M5

Mark et Grow th

Resources

(MGR)

Cus tomer

EducationEducat ion Materials

Sys tem Cont rol

ProgramI ndividual

Order

Management

Business Party Informat ion

Sys tem

Management

Strategic Salon

Sys tem

Cus tomer (D irect)

Product

Sales

Promotion Informat ion

MobilePoint

Sales

Adminis tration

Busines s Party, Geography, Call, Turnover

Order, Campaign Information, E vent

Busines s Party, Geography, Call,

Turnov er Order, Campaign, Event

Mark eti ng

Salon Informat ion

Salon Informat ion

Sales Order (Direc t)

P romotion

Management

Sales Strat egy (Campai gn), Promot ion

Ret urn Authoriz ation (D irect)

Advert ising (Direct)

Inc entive Point s

Employ ee

I ndividual

Sales

Operations

Revenue

Analysis

Business

Analyst

Order

Entry

Business

Analyst

Sales

Performance

&

Productivity

Business

Analyst

Sales

Forecast

Modeling

Business

Analyst

Daily Sales

Report ing

Business

Coordinator

Assessment Activ it ies Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7











M4

M2

M1

M3

M5

Assessment Act iv ities Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7











M4

M2

M1

M3

M5

IBM M ainfram e VAX Mainf rameIBM Risc IBM AS400 Micro VaxLAN or PC

Da tabases

MDPSDictate dReports

(HL7 Flat F iles)from Aan

Propriet ary DB

Discharge

Instruct ions(RDB)

CFPCar diology

Reports

LAN Prop rietaryDB

SunquestLabs,

B lood Bank,Anatomical

Pathology

(M umps)

DMI

Rad io lo gy

(MUMPS)

SMSOrd er

Entr y

( VSAM )

F uture SMSPat ient Data

(Med sAdministra tion,

I & O's

etc)

ClinicompBed side

Do cumentatio n

(Pr oprietar y LANSQL DB)

Clinical Data Sources

Coded and T ext data

CLASS

Materials

MgtAS400

Cod ed and T ext

ORIS/ORPT

Ope rating Room(Mainfr ame

DB2)

Coded an d Textdata

Transplant

Research

LAN DB( Par adox)

CCLT ranspla nt

MedicalPr oprietar y LAN

DB

OCISBMT Data

( MUMPS)

GCRC

Research

MicroVax(RDB)

Clinical Research Systems( Receive HL7 ADT & Lab Data)

Coded an d Text da ta

ADMITPa tie nt Visit

(BDAM )

IDXOutp atient

Visit

Boston Vax(Mump s)

Coded and Text Data

PatientDemographic/Visit

META

MedicalRcds

DX & Pr ocedure(VSAM)

Patient

AccountingFinan cial

Data(BDAM)

Financial, DX, &Procedure

Coded (future Scanned

Data)

OHACom parativeOhio Hospital

Data( DB2)

Code d data

Pa tie ntSa tisfa ctio n

PC DB

Coded and T ext

Data

Various Qu alit yImp rovemen tDataba sesL AN DB

Co ded and Text

Data

QI & Comparative Databases

Lifetim eClinical

Record(Mainf rame DB2)

Clinical View of Data

EAD

Master

Patient Index(Mainf rame DB2)

Healthcare TermDictionary

HCC

Contract

M anagementOr acle DBIBM RISC

Financial View of Data

HCCCost

Account ingOra cle DBIBM RISC

Financial DecisionSupport

Outreach

Database( Mainfra me

DB2)

Code d and T ext

da ta

Marketing

DB

( Par adox)( In Chicago)

Code d and T extdat a

ONCOLOG

Tum or RegistryPro prietar yLAN DB

Coded a ndTextd ata

IOUOncology

Clinca l T rials(MIIS)

Coded and T extdata

Various

Speciali zedResearch

Databases

Coded and Te xtdata

Clinical Research Systems(Not Interfaced)

Data may change af ter transfer

Tape LoadProgram

PharmakonInpa tie ntPha rmacyIBM RI SC

Co ded and Textdata

Lant isRadiati on

OncologyLAN DB

Coded an d TextData

Ancillary Systems(Receive HL7 ADT Data)

Radi ol ogyIm age Syste m

LAN DB

(Sybase)

Images

Outpat ientPharmacy

Micro Vax

Co ded and Textdata

Ancillary Systems(Not Interfaced)

Peopl eSoftGener al Ledger

(Or acle DB)

Code d data

ANSOS

ProprietaryLAN DB

Co ded and Textdata

Peoplesof t

HumanResources( Or acle DB)

StaffingData

HL7 HL7 FT P ?HL7 HL7

CIS

(RDB)

CurrentSystem

No Order Ent ryor F uture

ApplicationDa ta

Deci sionSupport

CurrentSystem

QMF

Sa les Operations

R evenueAnalysis

Sa les

ForecastM ode l

C ance lla tion

Ana ly sis

Disc onnec tAna ly sis

O perationAna lys is

Order Inte rva lAna ly sis

Head Coun t

Analys is

Bil led Rev enueAna ly sis

Penetra tionAna ly sis

Bi ll i ngDis pu tes

Credi tsAna lysis

Iden tify Po ten tia lCustomers

Ass em ble Cus tomer

Produc t M atri x

Sa les Orde rs &Customers Fo recas t

Produc ts &

Equipm en t Fo recast

SalesPerfo rmanc e/

Productiv i ty

NetworkTopology

Ana lys is

Pro fi tab il i ty

Analys is

Orde r En tryRes o lu tion

Con tes t

Analys is

Prom o & Spec ia lOffe rs Ana lysis

Iden ti fy Sa les RepC ounts

New O rde rs Va lue

Forecast

Book ed & Bi lledRevenue Fo rec as t

Sales Sta tis tic sForec as t

Bui lding Lev el


M ark et Lev el

Bu i ld ingPene tration


Business Case Development (cont’d)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

I ncrease Market Share 12 4 5 4 5 5 5 5 1 5 5 2 4 4 4 4

Increase Shareholder Value 20 3 3 3 4 4 4 3 2 4 3 2 3 3 3 3

Increase Brand Image 7 5 1 4 2 2 5 5 1 4 2 4 5 5 5 5

Increase Revenue (and Profit ) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5

Increase Com pet itive Position 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4

Increase Associate

E ffectiveness/Satisfaction14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5

Satsify Customers 18 5 4 4 3 3 3 5 1 5 4 5 5 5 5 5

Business Value Score 100 343 371 394 358 358 421 460 249 439 421 354 439 439 439 439

Availability, Completeness, &

Reliabil ity of Source Data20 2 1 4 4 4 2 2 1 2 3 2 4 4 4 3

Tim e/Ef fort/Cost to Extract , Transform, Integrate, & Load Source 20 1 4 1 5 3 2 4 1 4 5 1 4 4 4 1

CUD Process Definiti ons 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1

Completness of Application Data

Models & Functional Specs10 1 5 2 5 5 2 5 2 4 5 2 4 4 5 1

SLA Requirements Achievabl e 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1

IT Inf rastructure Preparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1

PMO & SDLC/SDM Maturity 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1

Data Gov. Organizational Readiness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1

Feasibi lity Score 100 180 290 230 390 350 190 360 210 340 400 140 360 350 430 140

Business Process

Business Value & IT Readiness

Criteria

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15




Increase Revenue (and Profit) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5

Increase Com pet itive Posit ion 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4

Increase Associate

E ffectiveness/Satisfact ion14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5





Tim e/Ef fort/Cost to Extract, Transform, Integrate, & Load Source 20 1 4 1 5 3 2 4 1 4 5 1 4 4 4 1

CUD Process Def initions 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1

Completness of Applicat ion Data

Models & F unctional Specs10 1 5 2 5 5 2 5 2 4 5 2 4 4 5 1

SLA Requirements Achievable 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1

IT Inf rastructure P reparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1


Data Gov. Organizat ional Readiness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1


Business Process


Criteria

Weighting

Factor

Cold Leads

Product , Prici ng, & Promotio n St ructures

Cancel lation Reports/Data

Dail y Sales Report

Hea

d Co

unt

Ord

er C

an

cels &

Ab

orts

Disc

onne

cts &

Cre

dits

Re

venu

e F

low

An

alysis

Rep

orts

Cu

stome

r Su

rveys

Ho

t Le

ads

Order Entry Backlogs

Order Interval Reports

Build

ing N

etw

ork Ca

pac

ity (Fu

ture)

Wee

kly

Sa

les

Rep

ort

s

Mon

thly

Sa

les

Rep

orts

Bu

ildin

g P

ene

trat

ion

Re

port

s

Da

ily S

ale

s R

epor

ts

M arketing

Sales Operations

Billing

Operations

(Sales to

Revenue

Team )

IT -

Enterpri se

Report ing

Human

Resources

Custom er

Service

Fi nance

Vendor

Leads

(D&B,

ABI)

Engineering

Hot

Leads

Vendor?

Order

Operat ions

Sales

M anagement

Nat ional

(Fi eld)

Sales

summarizes by that Time Period

is summarized by

is summarized by

sum

mariz

es b

y that

Sale

s Geogra

phic

Com

pon

ent

summarizes by that Sales Organization

is summar ized by

is summarized by

summarizes by that Promotion

is sum

mariz

ed b

y

sum

mariz

es b

y that P

roduct

Promo & Sp ecial Of fersKPI Set

Sales Geography

Sales Organizat ion Time Period

Promotion Product

Parent Product Code

Parent Product Name

Produc t Code

Produc t Name

Produc t Type Description

Promotion Code

Promotion Desc ription

Promotion Effec tive Date

Promotion End Date

Bui lding Code

City Name

Market Name

Region Name

Month

Quarter

Year

Field Sales Resource Name

Field Sales Role Desc ription

Managing Field Sales Resource Name

Managing Field Sales Role Description

Subordinate Field Sales Resource Name

Subordinate Field Sales Role Description

Adjus tment Charges

Credit Charges

Estimated Revenue

Finance Char ges

Gross B il led Revenue

MRC Charges

Net B illed Revenue

NRC Charges

Orders Count

Pending Or ders Count

Term Charges

Total Order s Count

Usage Charges

Sa les Operations

RevenueAnalys is

SalesForecast

M odel

Canc el lation

Analy sis

Dis connectAnaly sis

OperationAna ly sis

O rder In terv alAnaly sis

Head CountAna ly sis

Bi l led Revenue

Analy sis


Bi ll i ngD is pu tes

Cred itsAna ly sis

Identi fy PotentialCus tom ers

As semb le Customer

Product Ma tri x

Sa les Orders &

Custom er s Forecast

Products &Equ ipment Fo rec as t

Sa lesPerfo rm ance /

Productivi ty

N etworkTopology

Analys is

Profi tab i li tyAna ly sis

Order EntryReso lution

Con testAna ly sis

Prom o & Specia l

Offers Ana ly sis

Identi fy Sales RepCoun ts

N ew Order s Value

Forec as t

Booked & Bi lled

R ev enue Forecast

Sa les Stati sti csForecas t

Bui lding Lev elPene tration

Ana lys is

M ark et Lev el

Bu ild ingPenetra tion

Cu

stom

er

Sat

isfa

ctio

n

Re

ntal

Beh

avi

or/

Ha

bits

Mar

ket

Re

sear

ch

Ch

ann

el P

erfo

rma

nce

Su

b-C

han

nel

Pe

rform

ance

Mar

ketin

g P

rog

ram

Eff

ectiv

nes

s

Cu

stom

er

Pro

filin

g/S

egm

ent

atio

n

Co

st/B

ene

fit R

ela

tion

ship

Mar

ket

Sha

re (

vs

Co

mpe

titio

n)

Acc

oun

t Pe

rfor

man

ce

Ope

ratio

nal I

mpa

ct (

e.g

.,

Tal

k T

ime)

Mai

ling

Lis

t G

ene

rati

on

Tel

em

arke

ting

Lis

t

Gen

era

tion

Acc

oun

t Lis

t G

en

erat

ion

E-M

ail

Lis

t G

ene

ratio

n

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15




Increase Revenue (and Profit ) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5

Increase Com pet itive Position 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4

Increase Associate

Effectiveness/Satisfaction14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5





Tim e/Ef fort/Cost to Extract , Transform, Integrate, & Load Source 20 1 4 1 5 3 2 4 1 4 5 1 4 4 4 1

CUD Process Definiti ons 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1

Completness of Application Data


SLA Requirements Achievabl e 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1

IT Inf rastructure Preparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1


Data Gov. Organizational Readiness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1


Business Process


Criteria

Weightin g

Factor

Oracle Customer Mgmt

Modify Customer

Data WarehouseBizTalk

Transform to Oracle

Trasform to Normal

Transform to Normal Message

Transform to ERP

Send to ERP

Post to DW

Post Event

Log Error

Branch ERP

Create Response

Crea te Error Msg

Process Update

Log Handler

: OracleCustMgmt01Not ificat ion

OracleCustResponse: OracleCustMgmt01

: CustomerMgmt01Normal Notif ictaion

CustNormalResponse: CustomerMgmt01

: CustomerMgmt01Normal Notific taion

: ERPCustMgmt01ERP Not ificat ion

: MessageSta tusCustModError

ERPCustResponse : ERPCustMgmt01

: ERPCustMgmt01ERP Notif icat ion

: MessageStatusCustModEvent

: MessageStatusCustModError

[more ]

[Er ror]

[Success ]


Rela ti ve Ti meline (Weeks)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1 8 1 9 2 0 2 1 2 2 2 3 24 25 26 2 7 28 29 3 0 31 32

Ini tia ti ve/ Phase

1. Impl ement Tel emarketi ng Package Soluti on

1.0 In iti ati on

1.1 De velop Strategi c Salon Sy st em Archit ecture

1.2 Con duct Telemarket ing Pa ck age Pil ot

1.3 De velop Telemarket ing Pa ck age Proto type

1.4 Con duct Telemarket ing Nat ion al Laun ch

2. Impl ement Tel emarketi ng Extension Enviro nment

2.0 In iti ati on

2.1 De velop Telemarket ing Ext Arch ite cture

2.2 Con duct Telemarket ing Ext Nati onal Laun ch

3. Impl ement Data Di stri bution

3.0 In iti ati on

3.1 Impl emen t M obi lePoin t HQ Server (In House)

3.2 De velop In terim Rep ort in g

3.3 De velop Common API App ro ach3.4 De velop Mob ile Poi nt Sy nchroni zati on Trans

3.5 De velop Telemarket ing Sy nchroni zatio n Trans

3.6 Con duct Dat a Synch ron izat ion Syst em Int Test

3.7 Con duct Dat a Synch ron izat ion Nat iona l Laun ch

4. Impl ement Decisio n Support Enviro nment4.0 In iti ati on

4.1 De velop Salon Repo rt ing Dat abase En vironment

4.2 Con duct Basel ine Sal on Reporti ng Data Qual it y Assess

4.3 De velop Test B ase lin e Salon Repo rt s

4.4 Con duct Prod uct ion Baseli ne Salo n Rep ortin g Laun ch

Process Risk Matrix

0

250

500

0 250 500

Feasibility

Bu

sin

ess V

alu

e

1 - Customer Satisfact ion

2 - Rental Behavior/Habit s3 - Market Reasearch

4 - Channel Performance

5 - Sub-Channel Performance6 - Marketing Program Ef fect iveness

7 - Customer Profiling/Segmentation8 - Cost/Benefit Relationship

9 - Market Share (vs Compet ition)10 - Account Performance

11 - Operat ional Impact

12 - Mailing List Generation13 - Telemarketing List Generation

14 - Account List Generation15 - E-Mail List Generation

1

23

45

6

7

8

9

10

11

1213

1415

Cu

sto

mer

Sa

tisfa

ctio

n

Re

nta

l Be

hav

ior/

Ha

bits

Mar

ket R

ese

arc

h

Ch

anne

l Pe

rfor

man

ce

Sub

-Cha

nne

l

Per

form

anc

e

Mar

ketin

g P

rog

ram

Effe

ctiv

ness

Cu

sto

mer

Pro

filin

g/S

egm

enta

tion

Co

st/B

enef

it R

ela

tions

hip

Mar

ket S

har

e (v

s

Co

mp

etit

ion)

Acc

ou

nt P

erfo

rma

nce

Op

era

tion

al I

mp

act

(e.g

.,

Tal

k T

ime

)

Mai

ling

List

Gen

era

tion

Tel

em

arke

ting

Lis

t

Ge

nera

tion

Acc

ou

nt L

ist G

ene

ratio

n

E-M

ail

Lis

t G

ene

ratio

n

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

I nc rease Market Share 12 4 5 4 5 5 5 5 1 5 5 2 4 4 4 4

Increase S hareholder Value 20 3 3 3 4 4 4 3 2 4 3 2 3 3 3 3

Increase B rand Image 7 5 1 4 2 2 5 5 1 4 2 4 5 5 5 5

Increase Revenue (and P rofit ) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5

Increase Compet itive P os ition 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4

Increase A ssoc iate

Ef fect iveness/Satis facti on14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5


Business V alue Score 100 343 371 394 358 358 421 460 249 439 421 354 439 439 439 439

Accessiblity /Availability of S ource

Data15 2 1 4 4 4 2 2 1 2 3 2 4 4 4 3

Tim e/Effort/Cost to Ext ract ,

Transform, & Integrate Source Data20 1 4 1 5 3 2 4 1 5 5 1 4 4 4 1

Source Data Reliabl ity and

Com pleteness15 1 5 1 5 5 1 4 1 3 5 1 5 4 5 1

CUD Process Def initions 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1

Com pletness of Application Data


SLA Requirements Achievable 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1

IT Infrast ructure Preparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1

PM O & S DLC/SDM Maturit y 5 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1

Data Gov. Organizat ional Readiness 5 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1

Feasibili ty S core 100 110 310 150 395 355 145 335 120 320 385 120 340 315 385 115

Business Process

Business V alue & IT Readiness

Criteria

Weighting

Factor

Business Case Development (cont’d)

Questions and reference links

• Business Value Index (Intel)

– http://www.intel.com/au/directions/current-issue.htm

– http://www.intel.com/au/directions/pdf/bv-demo.zip

• Total Economic Impact

– http://www.forrester.com/pdfs/1,2712,3964,00.pdf

– http://www.forrester.com/Events/Content/0,5180,1738,00.ppt

• VAL-IT

– http://www.isaca.org/Template.cfm?Section=COBIT6&template=/ContentManagement/ContentDisplay.cfm&ContentID=25060

• Applied Information Economics

– http://www.hubbardresearch.com/dotnetnuke/Default.aspx

– http://www.federalelectronicschallenge.net/resources/docs/aie_desktop.pdf



Thank You…


Mr. Parnitzke is a hands-on technology executive, trusted partner, advisor, software publisher, and widely recognized database management and enterprise architecture thought leader. Over his career he has served in executive, technical, publisher (commercial software), and practice management roles across a wide range of industries. Now a highly sought after technology management advisor and hands-on practitioner his customers include many of the Fortune 500 as well as emerging businesses where he is known for taking complex challenges and solving for them across all levels of the customer’s organization delivering distinctive value and lasting relationships.

Contact:[email protected]

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