cognos · ibm has acquired this technology, formerly known as spss. the technology allows clients...

Dan Volitich • Gerard Ruppert

IBM® Cognos

® Business Intelligence 10The O

fficial G

uideVolitichRuppert

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The only authorized guide to IBM Cognos Business Intelligence v10.1Updated for the latest release of the software, IBM® Cognos® Business Intelligence 10:

The Official Guide explains how to create, implement, and manage an enterprise BI solution.

Maximize all of the new and enhanced features, including the powerful modeling,

monitoring, and analytics capabilities. Build and deliver reports that foster informed

business decisions and better results. Filled with real-world examples and expert advice,

this practical resource is ideal for anyone working with IBM Cognos Business Intelligence

v10.1— from administrators to end users.

• Monitor performance using dashboards and scorecards

• Assign user roles and privileges

• Provide a single access point to application-specific data via Cognos Connection

• Access content from Microsoft Office applications and mobile devices

• Collect and analyze BI data in an interactive dashboard with Cognos Business Insight

• Use Cognos Administration tools for system management

• Implement appropriate security measures

• Create BI reports with relational and dimensional data using Business Insight Advanced

• Use Report Studio to build dimensional reports with statistical analyses

• Identify and deliver mission-critical information using Event Studio

• Monitor business performance with Metric Studio

• Create, modify, organize, and publish a model in Framework Manager

• Ensure report integrity with Lifecycle Manager

Dan Volitich is president and owner of John Daniel Associates, an Accredited IBM Cognos Service Partner, which he co-founded in 1996 to serve the BI market.

Gerard Ruppert is director of technology at John Daniel Associates.

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Enterprise Applications/Business Intelligence

$70.00 USD

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Covers IBM Cognos Business Intelligence v10.1

CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5 CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5

IIntroduction to Business Analytics and IBM Cognos 10

ChApter 1Introduction to Business Analytics

ChApter 2Monitoring Performance Using Dashboards and Scorecards

ChApter 3Introduction to IBM Cognos 10 Business Analytics

ChApter 4Enhanced Analytics

pArt

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CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5 CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5 CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5

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CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5 CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5 CompRef8 / IBM® Cognos® Business Intelligence 10: The Official Guide / Volitich / 593-5

1Introduction to

Business Analytics

IBM Cognos 8 Business Intelligence: The Official Guide devoted a great deal of space to the progression of Business Intelligence (BI), including the value of performance management. The book discussed moving from the use of reports and online analytical

processing (OLAP) to the integrated enterprise tying performance measurement to business objectives by incorporating insight to forecast information. The role of the office of finance was expanded, and the information from that natural extension extended enterprise-wide insight to performance. Those concepts are still part of the vision for many organizations, yet many have made significant strides in executing BI and comprehensive performance management strategies. Companies that are successful in implementing performance management strategies are delivering on the promise of BI—that is, fact-based decision-making, better business outcomes, and competitive advantage.

With the introduction of IBM Cognos Business Intelligence v10.1, the business intelligence, to performance management, to business analytics (BA) progression is still about solving the one big challenge for most enterprises: How do we use the information we have—information about our markets, our suppliers, our customers, our employees, and so on—and leverage that information to create a better performing company? Adoption of the technology, the processes, and the people to plan and implement these solutions is a journey. The most successful companies embrace this journey and see it as part of their standard business practices. We have seen companies successfully embrace BA and weather the economic storm much better than competitors who failed to do so—if their competitors made it at all. The “win” that this journey offers an organization really is that powerful.

Businesses gather enormous amounts of data. Business users churn through those enormous piles of data, providing tremendous value from their BI reporting, query, dashboard, and scorecard solutions. Making this information available to the business user so that effective and accurate business decisions can be made offers clear advantages to the organization that masters these concepts and processes first.

BI has historically provided analytics capabilities—after all, that is why OLAP was born and why we all fell in love with the ease of the “slice-and-dice,” “drag-and-drop,” and “drill-down” functions. However, business is different now, and financial crises, economic challenges, and the need to keep up with the emerging technologies to address these

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4 p a r t I : I n t r o d u c t i o n t o B u s i n e s s A n a l y t i c s a n d I B M C o g n o s 1 0


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impacts makes our desire to dig deeper and learn more—quicker, better, and faster—even more important. Let’s face it: analysts need to be able to identify trends, predict performance outcomes, and stay ahead of their competition to survive. Those who leverage the use of BA successfully will win that battle and their companies will outperform others, leaving behind underperforming competitors.

The benefit to organizations committed to BA versus those that have not yet adopted analytics is great according to Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study (Massachusetts Institute of Technology, 2010). This study states that companies that use analytics perform three times better than those just beginning to adopt it. It also points out that top performers are 5.4 times more likely to use an analytic approach over an intuitive one. The use of analytics is optimized when coupled with solid business processes.

Business analytics is not a new concept. In traditional performance management practices, we have been able to answer the questions, “How are we doing?”, “Why?”, and “What should we be doing?” Cognos Business Intelligence v10.1 delivers a broad spectrum of analysis solutions, and we will address and narrow the definitions and benefits of those ideals in this book. And, most importantly, we’ll guide you through best practices—and strongly suggested practices—for successful deployment.

Types of Business AnalyticsThe different areas of BA address various needs within the business. In all cases, the type of information required within any user scenario will depend on the user’s role within the organization and how that person chooses to access critical information. So, with that, let’s talk about the four types of BA:

Analytical reporting (drill-down)•

Trending (slice and dice)•

Scenario modeling (what-if)•

Predictive modeling (what might be)•

Analytical ReportingA typical consumer of analytical reporting is a business user who prefers well-formatted, regularly delivered reports that provide some guidance on what areas need the user’s attention. These users typically need a “top-down” view of their functional area of the business. For example, a typical user within this realm may want to look at product performance or customer revenues, and will want to access this information in a “self-service” fashion. This user may also want to drill down to related reports to gain additional insight or detail, such as the specific product lines performing below expected or forecasted levels. A business user of analytical reporting typically wants to operate autonomously from IT, in a self-service fashion. Lastly, for the user who is interested in, or needs, multidimensional reporting, the reporting solution may be delivered from an OLAP source, which provides the flexibility of analytic reporting and drill functionality, while enabling IT to control what this user should or should not see.

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TrendingA business user who performs analysis on a regular basis can be said to “slice and dice” data. In most cases, analytical reporting is not sufficient for a user (typically a business analyst) who wants more freedom to explore the information. A typical example is a user who desires to view performance over different time periods as well as multiple or different perspectives of the same information to confirm hunches or theories. Every organization has at least a few of these users and, in some cases, a large number of them. For clients without a standard Business Intelligence platform, we find that these users invariably resort to Microsoft Excel to manipulate data exactly the way they want.

As we evolve to Cognos Business Intelligence v10.1, we assess that users with more demanding analysis needs have (likely) been dumping information into sophisticated spreadsheets that demand hours of manual manipulation. Those users realize capable business insight to things such as top and bottom analyses and are responsible for delivering answers to complex questions within their enterprises. They are typically the target user audience for BA, and for a solution that will provide them “trending,” specifically.

Scenario ModelingWhen businesses want to determine the impact of a new business approach by evaluating alternative business scenarios, they require a BA capability called scenario modeling. In scenario modeling, business users can develop “what-if” analyses on the fly. It offers users the flexibility to model scenarios against large data sets, to reorganize and compare scenarios within the business. For example, a user might want to understand the impact to the company’s customer base if a price increase is introduced on a product within a specific product line (sensitivity analysis): What if we increase pricing by 10 percent, 20 percent, and so on? How many customers are affected by that price increase in our market?

The scenario modeling capabilities found in Cognos Business Intelligence v10.1 provide information that is highly strategic to the business and typically leveraged by fewer users than other forms of analysis. These users are looking for financial analysis, profitability analysis, and other types of analyses and are able to adjust the analysis model without having to reload or re-request the data. The benefit to their business is real scenario comparison, based on a data model that enables analysis with what-if capabilities.

Predictive ModelingCognos Business Intelligence v10.1 is the first release in which the concept and functionality of predictive modeling is introduced as part of the solution platform. This is where businesses are interested in “what might be” within their data. Since the publication of our last book, IBM has acquired this technology, formerly known as SPSS. The technology allows clients to drive better business outcomes and yield the ability to do the following:

Attract and retain more profitable customers.•

Detect and prevent fraud.•

Improve resource allocation.•

These are just a few examples of the proposed value proposition for organizations seeking predictive analytics.

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Business users ask the question, What should we be doing?, because they need the foresight to intervene, allocate resources, and set targets. Further, to understand the answers to this question, business users must be able to try to predict future activity by leveraging three key BA capabilities:

“What-if” scenario planning to understand potential outcomes•

Predictive modeling to generate prescriptive, real-time, pattern-based strategies •within a situational context

Planning and budgeting to improve visibility, insight, and control over the levels of •revenue, expense, capital, workforce, and operational performance

Think back just five or ten years (for those readers in the industry that long) when the benefit of predictive modeling in areas such as fraud prevention was not as important as it is today. An organization looking to apply the full breadth of predictive analytics would have looked elsewhere. The ability to optimize data collection, statistics, data mining, and predictive modeling and deployment services is now within the BI platform.

Cognos Business Intelligence v10.1 incorporates the evolution of BA by bringing key categories together in one BA portfolio with the focus of helping clients achieve better business outcomes.

Starting the Business Analytics Journey: Solid Business IntelligenceAs you read this book, keep in mind that the concept of BA is a mature perspective, and your options for leveraging benefit from that analysis are greater due to the flexibility of Cognos Business Intelligence v10.1. BI has laid the groundwork for many companies to provide better reporting, better analytics through self-service, and solid web-enabled solutions. But technology alone will not get you where you need to go.

Businesses interested in pursuing BA will expand their business perspective for a more “complete” view, will facilitate collaboration, and will respond to growing user communities and demands for faster performance and more data. The journey to accomplish this task successfully, and the natural extension of BI with BA, will require that an organization establish and agree upon a process and solid strategy.

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As companies dig through data to look for answers, to gain insight from enhanced analysis or reporting, they will realize that they need the means to understand and measure their goals and progress. Selecting some cool technology that yields great graphs and highly formatted reports will not necessarily solve this problem, however. We have learned through 16 years of experience that such tools are only part of the solution. Many companies make the mistake of thinking the tools themselves will solve all their data problems, when, indeed, the single largest challenge is not the tools, infrastructure, or data, but the people within the organization.

In that regard, organizations need to ask the following questions:

Do people truly understand our business and are they willing to make fact-based •(not intuitive) decisions? Does the company culture support this?

Does the company have the process and methodology that will take what we learn •from our BI and apply that to new business decisions and processes?

Will our culture enable, embrace, and execute change? •

Answers to these questions require executive input, executive direction, and a commitment to the plan for execution. More importantly, if the answer to any of these questions is no, then your organization might want to reconsider this journey. Should that be your choice, however, you must know that your competition is likely figuring out how to make this work to gain competitive advantage through insights to their markets, their customers, and, ultimately, their profits.

The IT Perspective of BIFrom an IT perspective, you must consider the costs associated with implementing and maintaining a host of different tools. It requires investment, time, and human capital, and such duplication results in significant inefficiencies. There is no sharing of resources or report objects, and a help desk is necessary for multiple tools and classes of users.

Business users often rely on assistance from IT to “find the answers” to problems, make something easy to use, and assure them that the answers are correct. Users often want a “big button” that will get them what they want. So IT gets a new project, begins to evaluate tools, writes up the RFP, sends it out to vendors, and then, several months later, claims they have done what they were asked to do. The business users, meanwhile, have not adopted the solution and find themselves still using those disparate spreadsheets. The project is deemed successful by IT but deemed a failure by the business, because users still use the same manual processes and spend exorbitant amounts of time trying to solve the same problems that were present prior to IT’s solution. How does this happen? Let’s break it down a bit.

We can recall countless experts who have made statements on the value of BI in the marketplace and how “good data” is required to make BI successful. The IT department has been tasked with participation in a BI solution because the mounds of data the company has collected needs to be organized in a manner that can be presented to the business. But is it really about IT and the technology it brings with it? The answer, at least in part, is yes. IT has been responsible in most global and small and medium business (SMB) markets for gathering operational data. It has built sophisticated systems that enable organizations to collect information about most aspects of their businesses, and we’ve evolved from legacy systems to sophisticated enterprise resource planning (ERP) systems to help our businesses make use of that data to increase knowledge and profitability.

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Because IT organizations are best equipped with resources that collect this data, IT has historically been viewed by the business as the group that “owns” the data. And because those who collect the data must be knowledgeable about the organization of that data, they have built and taken ownership of the systems that keep that data. Although significant talent and resources are necessary to make that happen, we now have a business unit whose business is data. But how do we know that the data IT is collecting can tell us what we need to know to improve our performance for tomorrow, or next quarter, or next year, or five years from now? More important, have we provided insight into how we collect that data so that it can be transformed into usable information by typically nontechnical business users? The challenge underlying this question is that IT often doesn’t understand why the business can’t understand the information IT made available.

Because BI solutions bring use of information together with business performance, we need some sort of bridge that lets IT know that the information they are gathering for the business is accurate and provides the business with the confidence that the information can be used easily to make important decisions. And to use that information, IT must do the following:

IT must provide “good data.”• We have all heard the saying “garbage in, garbage out,” and this is very true in this case. IT must adhere to strict data planning and data management that provides, for example, a common definition of “customer,” and clean delivery of that definition as defined with the business. While at a client site recently, for example, we were charged with the deployment of a data warehouse for sales and market forecasting for a textiles company. When we pulled the data from its point of sale (POS) system, we noted multiple instances of customer names, misspelled customer names, and varying opinions about whose responsibility it would be to clean this up. Important to note here is that this client knew that multiple instances of a customer name existed in the system, but a manual process of correcting that in a spreadsheet versus in the data source masked the insight to the business that was needed to make informed decisions about product mix.

IT must work with the business to understand the benefit of its role in the BI journey.• This is not a “we versus they” undertaking. If you attack it that way, the project will fail. Don’t take it personally if the business requires that you change a field or add a field in the database, or if your DBA is asked to adjust access “rights” to the data. Be prepared going in that you’ll need to “clean up” your data along the way, and make a solid plan to do so: it will benefit the organization as a whole—and, who knows, you might become an IT hero along the way.

IT staff must educate themselves and ask for help from a trusted source who has embarked on •this journey before. Our company has implemented the Cognos solution for 16 years, and when getting new resources up to speed, we have a saying: “It is always easier the tenth time.” That doesn’t mean that it always takes us ten tries to get it right for a client; it simply means that we have found a few techniques along the way that are better than others, and our clients benefit by our having tested and tried functionality with the Cognos solution before we get there.

The Business Perspective of BIBecause we work with so many organizations, we have unique visibility into how information needs are actually addressed in organizations. The reality is that in many of the

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organizations we work with, finding answers to the three questions is a manual process that uses a mix of different tools and interfaces. Because of that, business users across the organization will pull together different versions of the same numbers. Different users will likely make slightly different assumptions, use different calculations, and perhaps even use different definitions for terms such as “customer” and “revenue.” They might use different interfaces, different time periods, and even different data sources.

The result for the business users is sometimes disappointing, because they will sit down in a meeting and spend the most time talking about where the numbers came from as opposed to what to do with the numbers. This slows down the decision-making processes that drive performance.

We have simplified this process by focusing on organizing the users into user groups and leveraging best practices when using multiple data sources. Imagine your organization and the cumbersome and time-consuming efforts that are happening now to satisfy business users’ information requirements. You can appreciate the complex environment this creates for IT to support and optimize. That need for information cannot be dismissed. Business users are going about using their own means of organizing data so that they can make the necessary adjustments to the business as needed. Perhaps inventory levels need adjusted from one facility to another due to a new client’s requirements. Perhaps profitability is lagging with the largest client while revenues have increased. The answer to why these things are happening and how we adjust our business to accommodate them lies in a well-planned and well-delivered BA deployment.

The Pursuit of Business AnalyticsWhether you are seeking a solution to uncover insights for specific industries (such as financial services, public sector, distribution, industrial, or communications) or to deliver insights for cross-industry solutions (such as financial performance, customer relations, human capital, advanced case management, supply chain, or asset optimization), BA solutions and associated best practices will provide you with optimized decision-making within your business.

The following discussion covers the progress and requirements that you should consider when committing your organization to a performance-based organization. Becoming a BA lead organization will move your organization from “obstructed” in its view to “aware,” or from a “fragmented” organization to an “aligned” organization. It changes organizations from rigid to agile, and, perhaps most important, it can remove the reactive tendencies that many of us live with day-to-day to enable a proactive approach to our performance.

BA, and performance management before that, are strategic endeavors that demand support from senior management. Many performance management initiatives are led by the CEO and/or CFO. We have seen too many initiatives at some of our customer sites fall by the wayside or get lost in budget shuffles or turf wars due to a lack of commitment from the top. On the opposite end of that spectrum, we have had terrific success with companies that have truly changed the way they do business by leveraging the IBM solution to their strategic and competitive advantage with senior executives who were committed to fact-based and analytical decision-making. In one of our most successful clients, the CEO presented his information strategy, which included a BI initiative, and stated to his entire

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staff that “you are either on this bus with me, or the door is that way.” He attributes 20 percent bottom-line growth directly to the success of his BI initiative. To date, it has been an eight-year journey.

In conclusion, you must recognize that your measurement of each deliverable is key in building the next segment of your BA journey. Your investment in strategy and planning is as important as the solution you select. To realize the full benefit of the Cognos Business Intelligence v10.1 solution, start by considering initial smaller projects that will build a successful foundation for your enterprise deployment.

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cognos · ibm has acquired this technology, formerly known as spss. the technology allows clients...

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