business at your fingertips the real time value

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© 2010 Aberdeen Group. Telephone: 617 854 520

www.aberdeen.com Fax: 617 723 789

February, 2011

Business Answers at Your Fingertips:The Real-Time Value of BI

Today's business decision maker is challenged by a multi-dimensional andcontinually evolving competitive environment. In one dimension, theevolution of technology and the subsequent acceleration of information flowhave created an environment that handsomely rewards timely generation ofbusiness insight. In another dimension, the volume, disparity, and overallcomplexity of that information is expanding at an alarming rate. Aberdeen'sDecember 2010 benchmark report, Data Management for BI: Fueling the

Analytical Engine with High-Octane Information, supports this assertion in

demonstrating that the average company sees a 41% year over year increasein data volume. This growth in volume is then compounded by an averageof 15 unique data sources that feed into their business intelligence (BI) andanalytical systems. Today's top performing organization has developed astrategy to manage the growth in data volume and complexity while at thesame time exploiting that data to create quicker business insight.

This Aberdeen Research brief hones in on the critical time element of aBest-in-Class BI strategy. The research shows that these top performersare leveraging real-time or near real-time analytics in order to proactivelymanage their business and drive substantial performance improvements.

Business ContextWhile the definition of "real-time" may vary from company to company,Aberdeen's August 2010 benchmark report, Operational Intelligence: Boosting Performance with "Right-Time" Business Insight, demonstrated the simple factthat Best-in-Class companies generally need information in a shorter timeframe than their peers and are also far more likely to get actionableinformation within that decision window (Figure 1).

Figure 1: Quenching the Thirst for Faster Insight

43%

27% 26%

10%

20%

30%

40%

50%

Information is needed withinthe hour or faster

P e r c e n t a g e

o f

R e s p o n d e n t s

Best-in-Class Average Laggard

93%

72%

34%

0%

25%

50%

75%

100%

Percentage of informationavailable on-time

A v e r a g e P e r c e n

t a g e

n = 269

Source: Aberdeen Group, August 2010

Research Brief

Aberdeen’s Research Briefsprovide a detailed explorationof a key finding from a primaryresearch study, including keyperformance indicators, Best-in-Class insight, and vendorinsight.

Summary of Recommendations

Key recommendations forcompanies looking to improvereal-time visibility and createfaster business insight:*

√ Start measuring "time-to-information"

√ Develop programs tocoach/train/developanalytical talent in-house

√ Investigate technologies toimprove data quality

√ Combine real-time data withpredictive modelingapplications

* Recommendations discussed in

more detail on page 8.

http://www.aberdeen.com/aberdeen-library/6692/RA-data-analytics-management.aspx




http://www.aberdeen.com/aberdeen-library/6528/RA-operational-business-intelligence.aspx








Business Answers at Your Fingertips: The Real-Time Value of BI



The research also demonstrates a marked narrowing of that decisionwindow over the past few business cycles. Survey respondents areconsistently asked to define their decision window - the amount of timebetween when a business event occurs, and when they need informationabout that event in order to make an informed decision - answer choicesranging from true real-time (sub-second latency) all the way up to weekly ormonthly. A sample of data from 2008 shows that 28% of companies needactionable information within the hour or faster. Fast forwarding to 2010shows that number increasing to 42% with more companies reporting aneed for near-real time insight (within seconds or minutes).

This increase in the need for quicker business insight engenders theinevitable question - where is this urgency coming from? Is it an internalmandate to become a more nimble organization or is the pressure comingfrom the external environment? A slice of the data showing only companiesthat report a need for real-time or near real-time business insight shows

that the top pressure is indeed coming from the external customerlandscape (Figure 2).

Figure 2: Top Pressures Driving Real-Time Analytics

24%

32%

39%

10% 20% 30% 40%

Operational data is under-

utilized

Operational decisions are basedon inaccurate / incomplete data

Customers demand timely andaccurate response to queries

Percentage of Respondents, n = 269

Respondents with Real / Near RealTime Access to Information


In an age where it generally costs more to acquire a new customer than todevelop an existing account, good customers are as good as gold andcompanies are doing everything in their power to engage, retain, and drivenew business from their customer base. This effort begins and ends with

timely response to customer needs and requests, and not surprisinglyconstitutes the top pressure driving a need for real-time analytics. Theother top pressures are mainly internal as companies are looking to real-time analytics to help drive more informed operational decisions with theuse of accurate supporting information. This could be applied towardtraditional front-office use cases like customer support as discussed above,or toward back-office functions such as procurement or inventorymanagement. Another key pressure revolves around the increasingimperative to extract the maximum value from business data. All too often,

Fast Facts

Top business functionsaddressed with a BI / analyticalstrategy*:

√ Finance / Accounting - 69%

√ Corporate Mgmt. - 68%

√ Sales - 68%

√ Customer Service - 61%

√ Product Marketing - 44%

* Best-in-Class respondents






Case Study — A CPG Manufacturer

next morning to make modifications. It also enables them to match theirmanufacturing levels more closely to demand by tuning their productionup or down based on fluctuations upstream.

From a sheer numbers perspective, the ability to improve efficiency andreduce their scrap rates by even 1-2% could lead to tens of millions ofdollars in cost savings. Overall, the biggest benefit to the organizationwill be in their ability to expand their profitability analysis capabilities byextending executive-level visibility all the way down to the shop floorlevels and building an understanding of how single shop performance isaffecting the overall bottom line for the organization.

Anatomy of a Best-in-Class CompanyThe benefits of a well executed analytical strategy can extend to multiplefunctions within the organization as well as many job roles, particularlywhen the information is delivered on a real-time basis. From a salesperspective, real-time visibility and analytical methodology can helpstreamline the sales pipeline to generate more revenue opportunities. Moreprospects can be identified in a shorter period of time, those prospects canbe qualified and funneled more efficiently, and new accounts can be sold atan improved rate. From a customer perspective, the ability to find the"needle in the haystack" information that a client needs can make or break arelationship and real-time analytical tools enable that on-time response.

Best-in-Class companies are leveraging these tools and techniques in orderto drive substantial performance improvements in these key operationalareas of the organization (Figure 3).

Figure 3: Best-in-Class Performance Enhancements

40%

14%

8%

0%

10%

20%

30%

40%

Growth in SalesPipeline

A v g .

Y / Y

C h a n g e

Best-in-Class Average Laggard

95%

87%

74%

70%

80%

90%

100%

On-time customerresponse rate

A v g .

P e r c e n t a g e 22%

6%

3%

0%

5%

10%

15%

20%

25%

Increase inInventory Turnover

A v g .

Y / Y

C h a n g e

n = 269


Extending these ideals to the non-customer facing roles, operationalintelligence and real-time analytics can be extremely valuable in many backoffice functions. The supply chain is typically fraught with an abundance of

Fast Facts

Best-in-Class companiesachieved:

√ 16% year over year increasein operating profit/EBIT

Compared with

√ 8% increase for the IndustryAverage

√ 1% decrease for Laggards






data from component and raw material providers and the ability to connectthat data with the demand side can have a material impact on the ability tomove product and boost inventory turnover, another key business metricwhere Best-in-Class companies have seen substantial year over yearimprovement (Figure 3, above).

The Value of Organizational Maturity

The ability to achieve the performance improvements listed in Figure 3 isnot a birthright, nor is it easily attained. Top performing companies drawon a diverse portfolio of organizational capabilities and leverage theappropriate technology enablers in order to create a holistic BI strategy thatallows for greater access to data, more efficient generation of businessinsight, and more effective delivery of that insight.

From an internal capability standpoint, Best-in-Class companies have put theright processes, skill sets, and knowledge management techniques in place inorder to deliver faster insight. This process often starts with the mindset ofthe organization. Top performers are more likely to report an "informationculture" that values evidence-based or data-driven decision making.Leveraging this culture, Best-in-Class companies are also able tocommunicate across business functions in order to gather and incorporateanalytical data needs into the BI systems (Figure 4).

Figure 4: Key Organizational Capabilities

70% 66% 64% 63%58%

47% 44%

31%26% 35% 25%15%

0%

25%

50%

75%

Decision-makingculture that

values the use ofsupporting data

Establishedprocess forcleansing &

enriching data

Real-timemeasurement of

operationalmetrics

Ability to assessdata needs

across businessfunctions

P e r c e n t a g e o f R e s p o

n d e n t s

n = 370Best-in-Class Average Laggard


When it comes to process, the top performers are also intimately familiar

with the "garbage in, garbage out" philosophy and are taking steps tocleanse, enrich, and generally increase the value and usability of their data.Finally, delivering on the promise of real-time analytics implies that decisionsare made and actions are taken in a truncated timetable, usually within theday, if not faster. In order to do this, Best-in-Class companies recognizethat they can't improve what they can't see, so they are also more likely tomeasure key operational performance metrics in real or near real time sothat they can make quicker adjustments (Figure 4, above).

Fast Facts

Percentage of company datathat is accessible by the BIsystems:

√ 63%: Best-in-Class

√ 50%: Industry Average

√ 32%: Laggard






Aberdeen Insights — Managing Big Data

Aberdeen research consistently supports the concept that organizationsof all shapes and sizes are not immune to the challenges of data growthand complexity. While this is true on an average aggregated basis, theconcept is even more germane to certain organizations and industriesthat, by their very nature, are subject to larger than average volumes ofdata. The challenge for these companies is not just capturing that dataand making it available, but running complex queries against enormousvolumes of data - on the order of multiple terabytes - and returning ameaningful answer in a very short period of time. The research showsthat Best-in-Class companies falling into this category are able to addressalmost twice the volume of data in a single BI instance or analysis session(Figure 4).

Figure 5: Addressing More Data in Less Time

30.6

18.2

10.0 15.0 20.0 25.0 30.0 35.0

Best-in-Class

Average and Laggard

Average # of Terabytes (TB), n = 370

2.1

22.3

- 5.0 10.0 15.0 20.0 25.0

Best-in-Class

Average and Laggard

Average # of Minutes, n = 370

Maximum

Addressable

Data Volume(TB)

Query Time

for Max DataVolume(Min.)

Source: Aberdeen Group, December 2010

While having the ability to address big data is crucial for certainorganizations, it is limited in value without the vital dimension of time. Alarge volume query could run for hours, or even days, without the

proper tools and techniques in place, such as the ability to generate highperformance queries and use the tools in the right way. The Best-in-Class have found the right formula for advanced analytics as the researchshows the average query response time for the top performers is lessthan one tenth that of all other companies.

While it is not the only piece of the puzzle, technology plays an importantrole in enabling real-time business insight. The activities involved with thecreation of that insight can be bucketed generally into three categories:






• Data Collection - Finding and capturing data, organizing it in ameaningful way, and cleansing/appending/enriching it for moreefficient metabolism by the analytical systems.

• Information Assembly - Asking questions of the information,applying business rules and modeling techniques to assemble it intousable business insight.

• Insight Delivery - Gathering and disseminating business insight tothe key decision makers within the organization in anintuitive/visually appealing way.

The research shows that Best-in-Class companies are deploying theappropriate technologies within each category in order to create anenvironment that supports faster decision making. On the back-end, topperformers are operational or transactional data warehouse technology tobetter organize their most transient information for better analysis. In

order to make better use of that information they're leveraging operationalBI tools (real or near real time reporting and analysis technology) to applythe right business modeling and analysis to create usable business insight.On the front end, the Best-in-Class are also more likely to use tactical oroperational dashboards for better daily, hourly, or real-time visualization ofthe metrics that support their decision-making process (Figure 6).

Figure 6: Best-in-Class Real-Time Technology Enablers

62%58% 56%

45%

32%

40% 38%

30%

5%

25%

45%

65%

Operational BIPlatform

TransactionalData Warehouse

Tools

Tactical /OperationalDashboards

BI or DataWarehouse"Appliance"

P e r c e n t a g e o f R e s

p o n d e n t s

n = 269Best-in-Class Average & Laggard


Another technology that has gained steam in certain circles of analytical useris the BI or data warehouse appliance. This technology is described as a

combination of data management or data warehouse software optionallypackaged with BI / reporting software residing on pre-configured or industrystandard x86 hardware. For the type of user that struggles with largequantities of data and needs the ability to ask questions of that data in ashortened timeframe, as described in Figure 5, a data warehouse appliancecan be an appropriate solution. As the rate of innovation in the softwareworld has accelerated, so too has the refinement and standardization ofcomputing power from both a processing and memory/storage perspective.In addition to the analytical firepower that these solutions offer, the recent

Fast Facts

Top inhibitors to efficient datamanagement*:

√ Lack of IT resources - 52%

√ Software and services aretoo expensive - 45%

√ End-users have not providedwell-defined informationneeds - 42%

√ Lack of top managementcommitment to projects -38%

√ Business need is not high

enough - 24%

*all survey respondents






others. But from a simple and practical standpoint, the data alsoneeds to be clean, free of corruption, duplication, and missingelements. One of the most logical uses of technology comes in theform of data quality assurance. Best-in-Class companies are morelikely to use tools like data cleansing and hygiene technology, as wellas data enrichment / append / matching tools. The top performersare 20% more likely than Industry Average companies to use bothof these types of technology. Having a higher degree of data qualityreduces wasted time and effort, increases trust in the data, andallows for a more efficient analysis to be performed as a result.

• Combine real-time data with predictive modelingapplications. For Best-in-Class companies, the final piece of thepuzzle involves leveraging their real-time visibility and quality data,not only to make better timely operational decisions, but to reactquicker to previously unforeseen threats and opportunities. These

top performing companies are more likely to be using technologieslike predictive modeling and analytical software to create "what-if?"scenarios, visualize how transactional changes can affect theirbusiness model in the long term, and make key adjustments on thefly in order to transform their organization from reactive toproactive.

For more information on this or other research topics, please visitwww.aberdeen.com.

Related Research

Operational Intelligence: BoostingPerformance with "Right-Time" Business Insight; August 2010

Self-Service BI: Empowering the Line-of-Business Manager ; May 2010

BI for the SMB 2010: Unlocking Hidden Business Insight to Drive Profit; October2010

The TCO View of Business Intelligence; April 2010

Author: Michael Lock, Senior Research Analyst, Business Intelligence([email protected])

Since 1988, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Havingbenchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provideorganizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's whyour research is relied on by more than 2.2 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% ofthe Technology 500.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targetedmarketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates thestrategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.comor call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologiesprovide for objective fact-based research and represent the best analysis available at the time of publication. Unlessotherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not bereproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by

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