Businss Analytics as a Managed Service - a CxO study by Numius

Business Analytics as a Managed Service

Numius Platform Services as the first step...

Business Analytics as a Managed Service

Introduction Numius is a professional service provider in the area of business intelligence, performance management and business analytics. Numius is based in Belgium but is connected to international business partners to deliver products and services throughout Europe and North America. As part of its ambition to expand its service offering as well as its geographical reach, Numius set out to define a new service offering in the Business Analytics services arena. Numius’s vision is to add a professional Platform-as-a-Service offering to its existing offering of Business Analytics Vision Definition, Project Delivery and its internationally appreciated Academy. Adding a professionally managed Business Analytics Platform will enhance the capability of Numius to deliver services with a focus on what really matters: “the added value of data that allow decision makers to make faster and better decisions”. The new platform will do away with the waste of energy that is poured into hardware, software and other commodity discussions that tend to deviate the attention in a Business Analytics project from its true objectives. However, before launching such a platform, Numius undertook a qualitative market survey with a set of neutral CEO’s, CFO’s, CIO’s, Academics, e-Entrepreneurs, Opinion makers. Numius prouds itself of its long relationships with its clients and before launching yet another service into the crowded Business Analytics market space, Numius wanted to listen and learn. Discover what our respondents said and find out what we learnt.

Business Analytics as a Managed Service

Methodology The survey was conducted in a very personal and direct manner, using the technique of a structured interview. The interview started by situating the new initiative within the strategy of Numius. That strategy aims to position Numius as a full-service, geographically unrestricted, long-term provider of Business Analytics Solutions and Services. The interview continued by pointing out that the new Platform-as-a-Service offering aimed to be a corner stone between classical Business Analytics project services, the market’s tendency towards server consolidation, the market’s demand for Analytical Solutions and the demand of organizations to deploy new Analytics initiatives faster and to larger audiences. From that corner stone upwards, clients will be able to subscribe to Fully Managed Business Analytics Services from Numius, leveraging on the experience that Numius has been building for more than a decade in this field. Finally, a set of topics were presented to the interviewees and the interviewees’ opinions were registered. These topics were centered around the question: “Would these topics rather incite you to keep Business Analytics on an internal platform or would they rather motivate you to go for a Platform-as-a-Service offering?”.

The topics presented to the interviewees were the following: 1. Data security 2. Cost of ownership and the creation of new opportunities 3. Technical performance, query speed 4. Added flexibility and its impact on total cost of ownership 5. Reliability and Service Level Agreements 6. Analytics in External Communication 7. Mobile decision making 8. Other - free to complete by the interviewee All remarks were registered. In order to ensure confidentiality, the written report of these interviews is rather based on general statements that the participants introduced, it is not a chronological report of every single conversation.

Business Analytics as a Managed Service

Participants Participants were selected to form a reliable and neutral panel of CFO’s, CIO’s, CEO’s, e-business entrepreneurs, business consultants, academics. Only a small part of the participants has an existing client relationship with Numius. The objective was not to have the Numius points of view confirmed, the objective was to elicit neutral points of view from the market. Our gratitude goes out to the following participants who were so generous to lend us some of their precious time but more importantly, to let us tap into their brains. After all, sharing insights amongst peers is the quintessential definition of Business Intelligence. In alphabetical order: Mr. Luc Botten Director of Finance and Administration - Red Cross Flanders Mr. Dany Braeckman Managing Director - ABBB Mr. Johan Bruynseels Director Enterprise Architecture & Business Solutions - Volvo Financial Services Mr. Renzo Caponi CEO - Care Consulting Services Mr. Luc Chauvin ICT Manager - Flemish Government Mr. Bart Desloover Group ICT Manager - Balta Industries Mr. Jan Doumen Program and Application Manager - Allianz Insurance Ms. Regina Flebus Senior Manager - Accenture Prof. Dr. Apr. Ann Gils Professor in Biomedical Sciences - K.U.Leuven Mr. Luc Lathouwers Secretary-general - Flemish Government Mr. Hans Leybaert CEO - UnifiedPost Mr. Kurt Spitaels ICT Manager - Flanders Investment & Trade Mr. Bart Rogiers ICT Manager - VAL-I-PAC Mr. Kurt Tierens Director Finance & Human Resources - Fost Plus Mr. Luc Van de Vondel Financial and Administrative Director - VAL-I-PAC Ms. Katja Van der Vekens IT Manager - Fost Plus Mr. Benny Vanspringel Contract Manager - Flemish Government Prof. Dr. Jan Vanthienen Professor in Information Management - K.U.Leuven Mr. Jan Verbeke CIO - Hessenatie, Senior Partner - AE

Business Analytics as a Managed Service

Additional acknowledgements A special acknowledgement should go out to a lot of persons at IBM Software Group, but in particular to four of them for having rekindled and having boosted this initiative at the IBM Information on Demand Conference in Rome, 2010 and for their moral and abundant practical support for this venture afterwards (in alphabetical order). Mr. Boris Bialek, Program Director, Technology Ecosytems, Information Management, IBM Software Group Mr. Paul Burton, Director of Business Development, IBM Software Group Mr. Kitman Cheung, Senior Manager, Infosphere & Optim Technology Ecosystem, Information Management, IBM Software Group Ms. Melody Ng, Senior Manager, Ecosystem Partnerships, Information Management, IBM Software Group The Belgian IBM sales and partner enablement team has been and will continue to be an essential supporting factor in turning this vision into reality. We thank the management and technical teams of I.R.I.S. for the solid partnership and the shared vision during the implementation and sustainment phase of this solution. Without the vision, the expertise, the dedication and the inspiration of the entire Numius team, ventures like these would not be possible. They are the ones that turn your Business Analytics vision into reality.

Business Analytics as a Managed Service

Traditional Business Intelligence services under pressure For the past decade, companies such as Numius have prouded themselves to be at the vanguard of business innovation and technology adoption. After a first five year period of preaching about the added value of Business Intelligence - that is what we have been calling it for the last 10 years - came another five years of diligently implementing projects to deliver the needs that we had identified together with our clients. Or easier still, implementing the needs that our clients had defined in our stead. Building, growing and sustaining a team of project consultants that could carefully listen to the clients’ needs and could then diligently and accurately implement these needs into working systems, was the critical success factor. It was - and still is actually - all about people. Demand was on the grow, the challenge was to recruit, train, retain, retrain, ...

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However, over the same ten years a new generation of business users, business managers and IT managers has been warming up to take over. At the same time, the global financial crisis overthrew a series of common practices. Surfacing from this crisis, with new collaborative visions, more agile business requirements, investment costs under constant pressure, the demand for classical Business Intelligence - or Performance Management Services as it was dubbed later - is beginning to move from slow bespoke projects towards agile, hit-andrun, analytics focussed missions. The new solutions need to clearly demonstrate a quick time-to-market potential, as well as a demonstrable return on investment (ROI).

The new solutions need to demonstrate a time-to-market potential, as well as a demonstrable return on investment Our interviewees thaught us that they expect full end-to-end capabilities and that the end-to-end capability, from vision creation all the way down to day-to-day operations in a Managed Services mode, will become a more important capability than being able to provide part of the required services for all kinds of technologies.

As a Business Intelligence or Business Analytics company, you need to stay ahead and innovate We learned that organizations in the market in general, and current clients in particular, expect from Numius to lead the way in terms of innovation. Our interviewees clearly expect that a Service Provider, as part of its service, keeps track of innovations in the market, acts as a filter and distills new offerings out of the multitude of innovations that are out there. Not only do they expect us to inform and educate them about new technologies, more important is that they expect us to assemble new services from these new technologies. These new services must allow our interviewees to rather focus on their services towards their clients. Much less time is available nowadays to the CIO’s, CEO’s, CFO’s to spend at defining the “back-end” processes, i.e. the processes and services of their suppliers. They are all focussing on the “front-end” processes, i.e. the processes and services for their clients. Interviewees stated that, although the proposed technological concept is not new - it is based on the cloud computing model - they appreciate the initiative to turn this technology into a tangible offering in the Business Analytics arena.

Business Analytics as a Managed Service

If you build it, they will come The market survey was partly intended to determine whether the initiative to start offering a Platform-as-a-Service offering for Business Intelligence and Business Analytics, would not be too premature. Premature investments into such an offering would lead to a waste of human and financial resources and would create a platform that would be obsolete by the time it became relevant. Realizing that this type of offering is not to be launched “at the expense of the first customer” (no single customer is going to fall for that), we set out to find whether they would come, should we build it. All of our interviewees were in agreement. To quote a few of the participants: “The time is now!”, “This is going to be a hit!”. These enthusiastic responses were confirmed by the less extroverted participants who confirmed that now is the time to raise market awareness and to convince organizations to move towards this model. The motivation that was given by our respondents was the following: 1. Cloud computing is by now well known. The concept has moved from the living room into the board room. There may be a psychological resistance towards “data in the cloud” but considering the Numius Platform Services are clearly situated in a private and well secured surrounding, this resistance can easily be neutralized. 2. Business Intelligence is seeking a second life, Business Analytics is about to be (re) born. Combining these two findings makes the timing for a Platform Service or a more sophisticated Managed Business Intelligence / Business Analytics Service offering perfect. In the Gartner Hype Cycle paradigm, cloud computing may still be at the Peak of Inflated Expectations and Business Intelligence may be moving steadily up the Slope of Enlightenment, the objective of this offering is to solidly bridge the Through of Disillusionment for all new Business Intelligence and Business Analytics projects.

VISISBILITY

CLOUD COMPUTING

BUSINESS INTELLIGENCE

PEAK OF INFLATED EXPECTATIONS

PLATEAU OF PRODUCTIVITY SLOPE OF ENLIGHTENMENT TROUGH OF DISILLUSIONMENT

TECHNOLOGY TRIGGER

MATURITY Free Numius interpretation based on Gartner

Business Analytics as a Managed Service

I am no longer interested in your complex architectures and your licensing schemes If there is one thing we have learned at Numius the last couple of years it’s this: “clients who have their sights set on getting results out of Business Analytics, truly detest negotiating about technical architectures, servers, networks and about licenses”.

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Clients who have their sights set on getting results out of Business Analytics, truly detest negotiating about technical architectures, servers, networks and about licenses. And indeed, the market survey showed that none of the interviewees considers these subjects to have any added value to their mission at all. None of the CIO’s, none of the CFO’s, none of the CEO’s,... At best, they want to pay for the value these aspects bring, but they detest the time and energy it consumes to get through the discussions and acquisition processes. Unfortunately, these issues typically need to be tackled at the start of a project, thereby effectively postponing any positive effects they expect to get from their Business Analytics projects. Today, cost is not only measured as an out-of-pocket cash flow, it is more measured as “opportunities lost” while beating around the bush. So more than the “net cost” side of architectures and licenses, the lost time debating about them is what all types of interviewees want to get rid off A.S.A.P.

In a modern organization predictable flexibility is key. Managers want flexibility within certain bounds. Predictable flexibility is exactly what the Platform Service should be about. Interviewees expect to be able to adjust their user population on a frequent basis (e.g. monthly) to cater for seasonal fluctuations or to be able to grow in the exact same pace as the business is growing. In an internal set-up, this is impossible to achieve because organizations need to acquire hardware (CAPEX) and need to acquire software licenses to go with the hardware (also CAPEX). Although people fall under the category of Operational Expenditure (OPEX), the issue with human resources is that you cannot acquire them in the exact dose that you need. You need to get them in large chunks - minimum a person at a time - even if you only need minutes of them per day. After the recent financial crisis, CAPEX came under pressure. All capital expenditures that can be avoided have to be avoided and all operational expenditures have to be synchronized as accurately as possible with the core business that is generating the actual revenue. Respondents, when given the choice between a fully predictable but adjustable monthly cost and a variable cost according to report consumption, most often went for the predictable monthly cost. It seems that flexibility on a monthly basis is sufficient for most applications. Flexibility on a minute per minute basis with a variable invoice as a consequence, was seen as less attractive in most cases. Through a Platform Service offering, it is possible to adjust both licensing needs as well as hardware capacity on a monthly basis. Consider the case where an organization wants to roll out a Business Intelligence application to 700 of its clients. On day one, they have no idea as to how many of their clients will actually use the application. Still, they have to buy the 700 licenses on a perpetual basis. To go with the licenses, they have to provision the hardware.

Business Analytics as a Managed Service

But how much hardware capacity will be consumed? Will the users run their reports all at the same time? How much internet bandwidth needs to be acquired? If the organization oversizes, then it will incur gigantic redundant costs and the average cost per user will skyrocket. If it undersizes and underinvests, than it will either be non-compliant and will have to turn users down and it is likely that users will be dissatisfied by the performance they are getting from the solution. This option is actually a case of “setting yourself up for failure”. The more successful your solution is, the more people will suffer.

HARDWARE - BANDWIDTH - SOFTWARE

In a Platform Service model, the service provider takes the risk of capacity management and always needs to be ahead of the game with pre-investments. The client pays for the short term projected capacity and adjusts on a monthly basis. If the client wants a more aggressive approach, he can pay per actual consumption. If the project is successful, the correct capacity is sourced. If the project is not successful, no surplus investments need to be amortized. In both cases, it’s a win.

AVOID OVERCAPACITY

DAMAGE BY UNDERCAPACITY

TIME OVERESTIMATED TRADITIONAL MODEL

PLATFORM SERVICE MODEL

UNDER ESTIMATED TRADITIONAL MODEL

Actual Demand - Platform Service Model

Cost transparency will become a requirement for all services. Better be the first one to offer it. A large majority of interviewees, and in particular the CIO’s, stressed that cost obscurity is no longer a strategy they can get away with. More and more, shareholders, compliancy audits and general management require activity related cost allocations. Defining the true cost of a Business Analytics Platform, consisting of people, floor space, trainings, energy, software, telecommunications, hardware, etc. is near to impossible in a classical accounting environment, even if it incorporates practices such as analytical or activity based accounting. The interviewees said they would appreciate a cost model that clearly quotes the full cost for a particular type of user. Not only would this lead to a predictable definition of cost, it would also allow to make a clear business case for the upcoming projects. Suppose an organization wants to deliver “intelligence” to its clients. If a service price amounts to 100 EUR per month per user and the margin the organization makes on a client only amounts to 5 EUR, then obviously, the project would not be sustainable in the long run.

Business Analytics as a Managed Service

In this case, transparency would lead to a no-go for the project but having a well founded no-go is still better than embarking upon a project that creates a hidden hemorrhage, somewhere along the company’s cost structures. On the upside, if the margin on a client could be made to increase by 200 EUR per month by adding the 100 EUR a month cost, the decision to go ahead with the project would just as easily be taken. In the traditional model, projects get stuck in limbo because of their un-transparent cost structures.

Focus on added value, not cost reduction A lot of the interviewees pointed out that a defensive - cost reduction - strategy is not what should be driving this initiative. Neither will it be the critical decision criterion. The reasons are simple and require us to think in terms of a number of client segments: The segment of those that already have Business Intelligence are stable and seek no expansion

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In this segment of organizations, Business Intelligence is often already embedded into both the lines of business as well as in the I.C.T. management processes. Replacing an internal platform by an External Platform Service will have the positive effect of making the true total cost (people, hardware, software, knowledge,...) visible and transparent, but will not necessarily dramatically reduce it. On the contrary, rendering the true total cost of ownership transparent may even come as a shock, considering that in many cases, these costs are typically hidden or scattered across various cost types and cost centers.

We need to think in terms of a number of client segments The segment of those that already have Business Intelligence but are unstable or seek expansion For those organizations or departments that already have Business Intelligence but that need to rethink their organizations (e.g. shifting I.C.T. priorities, expanding business requirements, need for faster response to business needs, ...) or for organizations that want to take parts of their Business Intelligence to a larger audience, a Platform-as-a-Service offering or a Fully Managed Business Analytics Service can come as a transparent and efficient way to achieve their objectives. Adding a Platform-as-a-Service offering to the mix of I.C.T. solutions may not even lead to a replacement of the existing internal Business Intelligence or Business Analytics organization model. It may come as a complement to achieve goals and objectives in a faster and more professional way. Typical expansionist projects include wide area business intelligence, where interviewees want to reach out to external stakeholders, such as citizens, suppliers, clients, etc. Internal Business Intelligence Competence Centers (BICC) typically have developed the competences to serve a limited number of internal users but they do not have the infrastructure (servers, internet connections, VPN set-ups, etc.) nor the organization (24/7 service desk, technical competences, ...) to cater for a larger and more demanding crowd. The segment of those that are new to Business Intelligence and Business Analytics Organizations or departments that are completely new to either Business Intelligence or Business Analytics are likely to adopt a Service model (either Platform or Fully Managed) more easily IF they either have the maturity to understand that they should stick to their core business - which rarely is “the operation of a technical Business Analytics platform” OR if they are faced with pressures such as time, the inability to do Capital Expenditures (a Service model inherently translates Capital Expenditures (CAPEX) into Operational Expenditure (OPEX)).

Business Analytics as a Managed Service

Interviewees confirm that, when faced with the actual choice between a clearly defined per user, per month price, ready to roll in days OR a month long discussion about architectures and subsequent procurement cycles, business managers - who are mostly indifferent to the “how” of I.C.T. - will tend to go for a Services model. The segment of those that have Business Intelligence but want to move to a higher level of Business Analytics Let’s not forget the organizations that have started to invest in Business Intelligence many years ago and that today fully understand the potential of having clean and well structured data. A lot of these organizations - if they want to sustain the competitive advantage they got from being Business Intelligence pioneers - should move into the area of Business Analytics to protect their investments in the Information Management arena. To help these organizations make this move quickly and efficiently, without capital expenditures and without major architectural discussions, a Platform Service to start off with and a Fully Managed Business Analytics Service to evolve into, would make a lot of sense.

Platform Services are for people that do not get their kicks out of complexity A valuable input from a number of interviewees was to state that a Platform Service would never sell to people that inherently lust for complexity. Although this may seem like a simple statement in itself, it actually holds a very tricky paradox. On the one hand, Platform Services are intended for organizations that put their priorities on the data and the information, not the systems. So yes, the systems side of it is made simpler by the Platform Service model. On the other hand, overstating the simplicity of such a platform would actually generate distrust within the I.C.T. community or would set a false level of expectations in terms of pricing. The paradox can be resolved by pointing out that subscribing to a Platform Service does indeed simplify the delivery of a Business Intelligence or a Business Analytics project, thus yielding substantial value to its subscribers in terms of time-to-deliver and total cost of ownership but at the same time by showing that all the complexity is now contained within the Service. The complexity has not disappeared, it has merely been isolated from the essence of the project, the data, the information.

This will allow the business department to define exactly what they need

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The line of business managers or the CIO’s that have a responsibility to co-define business objectives for future I.C.T.-systems in general and for Business Analytics systems in particular, pointed out that a Managed Platform Service in phase 1 and a Fully Managed Business Analytics Service in an ulterior phase, would greatly simplify the requirement definition phase in future projects.

If simplicity can be introduced in the offering, then expressing and quantifying exact needs will become substantially more simple too Although these services may not necessarily take away the complexity of defining the business semantics or the functional reporting and analytics needs, they do simplify a lot of the “non-functional” requirements. By reducing the complexity of the non-functional

Business Analytics as a Managed Service

requirements, time and money becomes available to focus on what really matters, i.e. the content, the added-value of upgrading data into information and knowledge. Interviewees expect to get very simple user profiles (e.g. users that simply consume information versus users that discover, upgrade and prepare information). They expect to get very simple pricing models (e.g. two different prices, one for simple consumers of information and one for those who discover and prepare information). They expect predictability, both in terms of service levels, performance as well as pricing. They expect a no-worries life cycle, taking away the burden of all kinds of minor system upgrades. They demand to be able to focus on the result of the system, not on the system itself. If simplicity can be introduced in the offering, then expressing and quantifying exact needs will become substantially more simple too.

Information needs to be reliable, not servers We learned that typically the CFO’s and CEO’s, but to a large extent the CIO’s too, stress the reliability of the information that comes OUT of the platform, not the reliability of the hardware that runs underneath. Of course, they all know that reliable information requires reliable systems but nevertheless, it shows the growing maturity in the information management arena. It’s no longer about systems, it’s about the return they yield to the business. The tricky part of this equation is that there are far more reasons why information may fail than there are reasons why systems typically do. Even trickier is that the reasons why information turns out to be faulty are very different for each client and his micro-information-managementeco-system. Technical systems, i.e. the Platform, succeed or fail for largely the same reasons, regardless of the client that is using them or the purpose they are using them for. Information may be false for a lot of very specific and circumstantial reasons. In a Platform-as-a-Service offering, the reliability of Information is out of scope. The Information is under the responsibility of the user of the Platform, not under the responsability of the Platform Provider. When this was pointed out during the interviews, ALL respondents reacted in a disappointed way. The survey showed that the ambition level of the interviewees went beyond a Platform Service offering. The ambition level was clearly at the level of a Fully Managed Business Analytics Service. Such an offering would have to include the end-to-end responsibility, from data up to information, from raw materials up to insight and even foresight.

Thou shalt not lock in thy clients nor their data The survey showed that all interviewees want to see a proven strategy for migration, both into the Managed Platform as well as back out of it. One interviewee even stated that “showing an easy way out, would be the best guarantee to keep us in.” This is one of the reasons why Numius is building its own technical platform, comparable to a private cloud, but at the disposition of multiple clients, and not using an anonymous public cloud solution. All clients should be reassured tangibly that their data and applications are managed by “real faces they know”. They need to be able to physically see, touch, smell,... the data storage that holds their data. They need to be able to take it out as well. No lock in’s.

You can do security better than we (i.e. the market) ever could Truth being said, we at Numius thought that “security” would be - if not a real - at least a psychological factor. Out of 19 interviewees, only two mentioned this as a potential barrier. We learned that people in the lines of business (business users, business managers, CFO’s,...)

Business Analytics as a Managed Service

consider “great security” to be a normal, standard feature of any Business Analytics offering, regardless whether it is procured from the internal ICT organization or from a Platform Provider.

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People in the I.C.T. function clearly state that they will make sure that the Platform Provider provide all possible means to secure the communications and the data but that at the same time, they are aware that it will be hard to stop a good business case, once accepted by the line of business, only for the psychological aspects of “Security”. They expect that the lines of business will force them to make sure the Platform Provider provides the appropriate security measures.

Do not overestimate the emotional value of security A CIO of a highly professionalized organization insisted that a Platform Provider would require external certification by a security expert and that this would effectively shut up all resistance in this field. Another interviewee suggested the first business cases should come from a bank or an insurance company, to convince prospective adopters of the platform solution of its security level. In the case of a medical data mining example, we learnt that medical data would require strict data access auditing as well as data masking. We are convinced that on average few organizations internally provide the full set of security measures comprising redundant firewalls, redundant and load-balanced reverse proxies, dedicated virtual local area network connectivity down to the database connection, encryption, third-party (externally from database) database security auditing, monitoring and policy enforcement, password policy management, data masking (e.g. for national ID numbers, bank account numers, credit card numbers), dedicated disk-arrays, dedicated database operating systems, dedicated web-servers, systematic backup, etc. And if you look at the typical public cloud offerings, there is typically a much larger “shared” component involved, which Numius considers a potential barrier for organizations to move their Business Analytics into a fully public cloud offering.

Mobility is a gadget! Or isn’t it? Most respondents did not see mobility and the additional ability that a Platform Service can offer to sustain mobility, as a primary reason to move to such a platform. The more respondents were involved in the actual decision making at their company, the less they see mobile devices as a decision taking platform. However, this is a point where Numius begs to differ with most of its interviewees. We believe that the advent of devices such as Apple’s iPad and its future descendants and competitors, will lead to a strong convergence between Personal Computers, Portable Computers and Communications Devices. As these hybrid devices become the sole access points of modern decision takers to their decision support systems, mobility will play a larger role and being ready to cater for mobility will be an added value of a modern secured and efficiently connected platform.

Business Analytics should facilitate decision making, not report making One particular interviewee clearly pointed out that Business Intelligence and Business Analytics are too often used for the sake of technology or for the sake of mere report generation. Before embarking upon a project, organizations should spend more effort wondering what the decisions will be that will be supported by the Business Intelligence or Business Analytics system. If this step is overlooked, the projects tend to result in an inflated mountain of

Business Analytics as a Managed Service

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Business Intelligence and Business Analytics are too often used for the sake of technology or for the sake of mere report generation report definitions that all of a sudden appear to have no reason of existence whatsoever. When organizations arrive at that point, the concepts of Business Intelligence and Business Analytics risk being discredited for not having lived up to their promises. We repeat that delivering a Business Analytics Platform Service will not necessarily eliminate this risk. However, it has the potential of mitigating this organizational risk by allowing more attention to be directed to the functional analysis, to the objective determination, to the definition of its true reasons of existence.

Business versus I.C.T. Opposing views? Basically, people in the lines of business do not care how their Business Analytics are delivered to them. Not from a technological point of view. All they care about is data quality, data freshness, great presentation formats and being able to make the right decisions inside their business processes. Within the ICT departments, we noticed two undercurrents. The protectionist undercurrent will come from those organizations where Business Intelligence was introduced as an I.C.T. project. Typically, these organizations have built their own I.C.T.-B.I. competences and will be reluctant to relinquishing that position. Unfortunately, they will be faced with the sheer impossible task to keep up with technological evolutions in this specialist field. But because the subject is fairly new and very dynamic in terms of innovation, Business Analytics is often one of the pet projects. The visionary undercurrent comes from those I.C.T. departments that realize that it is better to redefine their position now and transform into a Service Delivery Hub between the world of external application and services providers on the one hand and their end-user clients on the other. In such a vision, hardly any internal I.C.T. department will try to keep up with the very fast paced evolutions in the information management and information analytics world.

The bigger the organization, the bigger the I.C.T. debate will turn out to be. Or will it not?

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Now there’s a statement where participants were in disagreement. Before embarking on this survey, we at Numius thought that smaller organizations would be more open to the idea of a Managed Service in general or a Business Analytics Platform Service in particular. We assumed - and judging from competitors’ websites we are not alone - that such a Service could make Business Analytics accessible to small organizations. We feared that large organizations would have their act together very well and would never be in the market for a Platform Service, not even if it is offered by a specialist in the field such as Numius.

We feared that large organizations would have their act together very well and would never be in the market for a Platform Service All evidence points in the opposite direction. We were surprised to learn that large organizations, regardless of whether we spoke with executives from the lines of business or with ICT executives, would make this type of decision based on a strategic choice. That strategic choice would be the following:

Business Analytics as a Managed Service

“Is Business Analytics crucial to my operations or to my decision making process? If no, we will terminate it. If yes, can we lock in sufficient people skills to continue to offer this service internally? Can we keep up with technological evolutions? If no, let’s make sure this crucial activity is performed by people that focus on this type of activity.” Smaller organizations showed a different thought process: “Can we handle it today? If no, let’s get it as a Service. If yes, do we have other priorities with the same people? If no other priorities, we’ll just keep doing it. “ The discussion is much less determined by strategy (what opportunities do we miss by not doing this?) but more by operational necessity (what do we save by doing this?)

Lines of business and I.C.T. define the future together, but in the end, the lines of business decide A former business manager, turned CIO, argues that he is aware that his powers to opt for a Service offering as a CIO are less than when he was a business manager. He argues that as a CIO, he could potentially try to slow down the introduction of a Platform Service for Business Analytics on technical grounds. At the same time he is aware that the business case to the business user will be the ultimate decision factor. At the same time, all respondents realize that implementing a Business Analytics Platform Service will not be possible without the full support of the I.C.T. function. Today’s technology still requires close collaboration between the Business Analytics Platform provider and the internal I.C.T. department, notably in areas such as telecommunications, security, user access management, data transfer, integrated monitoring, etc. Business Analytics is not as simple as setting up a Facebook account but it doesn’t mean there are no lessons to be learned from the “simple” cloud examples.

Do not overestimate the importance of top level technical service level agreements. Focus on data quality. It’s the data, stupid! We assumed that one of the reasons that would motivate organizations to subscribe to a Platform Service, would be the inherent presence of Service Level Agreements. All of the respondents considered Business Intelligence or Business Analytics to be very important, but hardly any of them seems to have an internal Service Level Agreement attached to it. Again, the more deepened the Business Analytics vision was, the more the importance of flexible service levels was stressed. Allowing for creativity was considered to be more important than being restrictive about system service level agreements. Those interviewees that have embedded Business Intelligence into their day to day operational processes, tend to more emphasize the importance of system level service level agreements than those who use it for their decision support only. The latter emphasize data quality as a measure for service levels, rather than system up times. Again, when delivering a Platform Service, the focus remains on system service level agreements. When upgrading the Platform Service to a Fully Managed Business Analytics offering, the focus should shift on the timely and accurate delivery of information and knowledge to facilitate decision taking by the lines of business.

Would Numius move into the Google model in the future if clients are willing to share certain data for benchmarking purposes? Now here’s an interesting one. One interviewee even pushed the envelope by stating that Numius should not only supply a Platform Service, should not just upgrade that to an

Business Analytics as a Managed Service

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Analytical Solution or Fully Managed Business Analytics Services Platform, but should also act as a central point for data sharing between organizations. By sharing such information, participating organizations would benefit from each other’s intelligence, thereby creating a cluster of companies more intelligent than others.

Securing the integrity of our clients’ data will be our top priority Numius clearly states that this is not the objective of its offering today, nor will it be in the planned future. All data that is stored on our Platform will be isolated per client, down to the network level. Our data policy enforcement tools will even make it audit-able for clients whether our administrators have accessed their data or not (they should not!). Securing the integrity of our clients’ data will be our top priority.

Be ready for new types of sources such as unstructured text, social networks,... It was pointed out during the survey that we should not just focus on classically structured data, i.e. the relational database. More and more often true analytical value comes from the integration of structured data with intelligence gathered from unstructured sources such as e-mails, twitter feeds, document stores, etc. The determination of hidden or explicit sentiments on the world wide web’s blogs and twitter feeds might well be of more relevance to a decision maker in the retail sector than the pure sales data. Better yet, combining sales data with sentiment measurements may explain or even predict consumer behavior. Just imagine what these types of analyses could do in a political or mass retail context. From a medical R&D context we learnt that the integration of intelligence from unstructured data sources, experiment databases, medical trials database and internet based databases would yield a hundred fold productivity gain. Just imagine the “business” value this would represent. Providing a Platform Service allows for a more flexible plug-in of new types of applications. For most of these applications, a base platform is required. Often organizations would benefit from the plug-in itself but they cannot afford to set up the entire base platform. Being able to use the general platform services of a platform that is readily available allows access to specific applications. This type of flexibility will become all the more important in the Analytics arena, where hit-and-run style projects, delivered very quickly, will become more important than in the classic, industrialized managed business intelligence reporting arena.

Semantics will make a difference It’s not just about making reports, analyses, scorecards. More importantly, it’s about understanding what figures you are looking at. Even more important, it’s making sure that your colleagues interpret the figures you share in the exact same way! Respondents pointed out that we should cater to this concern, both in our methodology, as well as in the tool set that we provide.

Business analytics as a new form of published content for the masses A number of interviewees pointed out that a Business Analytics Platform Service should allow easy and abundant ways of publishing intelligence, out to masses of non-analysts. Those could be clients, citizens, stakeholders,... This vision once again transcends the

Business Analytics as a Managed Service

potentially limited view one might have of Business Intelligence and Business Analytics. This statement points out that it is the end-result of the analysis that holds the true value of such a platform and if this end-result cannot make it all the way down to the end-consumer, then the analytics did not make sense in the first place. Other respondents argued that this type of application is not intended to lead up to decisions, that it is more a public relations feature, not a decision support tool. Although this may be correct, if the market demands that intelligence be pushed back to the place where it originated (often clients are the source of data), than that is where it should be pushed out to. A solid and scaleable platform then becomes crucial.

This will allow the business department to understand how Business Analytics are really used Five of the interviewees pointed out that they would consider moving to a Platform Service just to become aware of the actual usage of the application. When they would be on metered billing (pay-per-use), they would automatically be better informed about the real usage of Business Intelligence and Business Analytics in their organization

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adding Analytical Solutions and moving to a Software-as-a-Service model or to a Fully Managed Business Analytics Services model would become an inevitable necessity Delivering functional solutions will be key! Seventy-five percent of all respondents pointed out that offering a Platform-as-a-Service would only suffice as a good starting point but that adding Analytical Solutions and moving to a Software-as-a-Service model or to a Fully Managed Business Analytics Services model would become an inevitable necessity. When we talked about offering Solutions on top of the Platform, it became clear that respondents are in the market for three levels of Solutions: Analytical Solutions (in a SaaS model) with predefined but rather generic functionalities. The advantage they seek in these solutions is a quick time-to-market and a predictable cost (as opposed to starting a bespoke project). The end result is a reliable application delivering reliable information, ready to be injected into the decision making process. Managed Business Intelligence or Business Analytics Services. On top of the Platform, the Service Provider operates a client specific Business Analytics process, including the ExtractTransform-Load processes. The end result is “reliable information”, not just a reliable system. Service Provider driven Quick Apps. These are industry specific Analytical Solutions, developed jointly with a specific client, offered over the Managed Platform and potentially resold to other companies in the same industry. The original client enters into a profit sharing model with the Service Provider when the solution enters the maturity of a full fledged standard Analytical Solution in a SaaS model. The difference with a normal project, is that this type of development is agile, time-boxed and driven from the Service Provider with only the bare minimum of interference from a potentially large and slow client organization. It became clear that the interviewees looked far beyond the offering of “just” a Platform Service. The fact that having a reliable platform is a prerequisite to deliver these added-value services, is a confirmation that the platform has a reason of existence.

Business Analytics as a Managed Service

Being able to upgrade from Platform Services to Analytical Solutions or a Fully Managed Business Analytics Service is essential As we went through the interviews it became clear that the participants made a clear distinction between Platform-as-a-Service and Business Analytics-as-a-ManagedService. Much against our initial expectation, most respondents actually expected to be getting a sneak preview of a Fully Managed Business Analytics Service. In that definition, the client would specify the data source and Numius would do “whatever it takes” to get meaningful information, intelligence, ... out of that data source. Not only would this involve doing an initial project, it would also entail the day to day operations, insure the integrity of ETL processes, evolutionary maintenance of the environment, training, performance tuning, monitoring, upgrading, new report building, etc. When it became clear that the first step would be to offer a Platform Service, some respondents actually reacted in a disappointed way. During the ensuing discussions, it often became clear that Platform Services are required in order to be able to move to a Fully Managed Business Analytics Services. A similar train of thought was developed for Analytical Solutions, a way to short-circuit bespoke development projects and exploit intelligence hidden in raw data much faster.

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Clearly, it is the vision and the ambition of Numius to combine its Project Services, its Service Desk, its Academy and its Platform Services to be able to offer a Fully Managed Business Analytics Managed Service.

Cloud without the haze, cloud with a face, the numius face So it’s cloud computing with a face? Rightly so! It’s not cloud as in “my data are somewhere and I don’t care where they are”. Data and applications are under the dedicated care of Numius Platform Services. Clients want to be able to audit the physical environment. Clients want to know where data resides. But yes, it is cloud as in: “Flexible capacity management, metered billing options, access to broadband internet, fast application roll-out,...”. As one interviewee put it, “it’s cloud without the haze” or as one other said, “Cloud with a face, the Numius face”.

Business Analytics as a Managed Service

BUSINESS ANALYTICS

Numius nv Greenhill Campus Interleuvenlaan 1515 D 3001 Heverlee (Leuven) Belgium t: +32 16 20 29 05 f: +32 16 22 58 95 www.numius.eu info@numius.eu Jo Coutuer jo.coutuer@numius.eu

Business Analytics as a Managed Service