When IT investment is shaped by business goals, corporate spending is more likely to enhance business value, growth and competitiveness. To help enterprises achieve these goals, industry analyst Gartner recently identified six business imperatives that are expected to steer IT investment in the near future.

Data warehousing and business intelligence (BI) technologies will be critical to the success of these imperatives, according to Mark A. Beyer, research vice president for Gartner. "Recognizing changes in the patterns of data and being able to spot not only trends, but also micro-trends within micro-trends, is the new standard," he says. "That means that data warehousing and BI—and especially the analytics they produce—will be essential for companies trying to meet these imperatives."

To make their most effective IT investments in data warehousing and BI, enterprises must consider each imperative's relationship to these technologies.

1. Attract and retain customers
Successful organizations strive to put their customers at the heart of all IT investments. Until recently, though, many companies used data warehousing and BI technologies only for spotting macro-level trends. This is no longer sufficient. Instead, enterprises must use new computing capabilities to gain finer levels of understanding about customer needs and preferences. Combining data mining and data profiling software helps companies almost instantaneously recognize changes in data patterns.

Improved processing, memory capacity and disk speed rates are largely responsible for this change. "Now with higher computing power and better-designed analytics, we can capture and analyze detailed data instead of just summary and aggregate records," Beyer says. "By assessing this data, companies can identify multi-layered micro-trends—even trends within micro-trends—and use them to determine which steps are needed to attract and retain customers."

2. Improve work force effectiveness
Because of the intensifying focus on superior business performance, companies must create an environment that supports high, if not extraordinary, work force performance. Data warehousing and BI technologies can help enterprises understand how to best deploy, engage, manage and support employees. By tracking micro-trends in hiring, deployment, collaboration and engagement, companies can ensure that employees work innovatively and effectively, enhancing work force performance while meeting business goals.

"One entertainment company used its data warehousing and BI application to analyze the traffic flow of patrons in its amusement park," states Beyer. "The company wanted to understand the patterns of how people moved through the park, so employees could be assigned most effectively." The company also introduced cost of goods sold, length of lines and weather conditions information into its data warehouse. This data, which may have been considered esoteric or even extraneous a few years ago, helped employees more effectively serve patrons while the company reduced staffing costs.

3. Build an agile and innovative organization
Organizational agility and innovation are critical business qualities that will influence an organization's ability to succeed. Developing these capabilities requires access to the information and tools that help an enterprise understand, analyze and respond to change. Yet many companies have been inhibited in their attempts to use data warehousing and BI to pursue this goal. Why? As data marts and data warehouses grow and organizations change, enterprises face the challenge of using data that other business units created.

"This has been a barrier to using data warehousing and BI," explains Beyer, "because one department or business unit becomes tied to the interpretation of the data that was originally built by someone else." Being forced to rely on this interpretation can prevent subsequent users from innovating, seeing new opportunities or deploying inventive approaches.

To avoid this problem, enterprises must collect and mine metadata on how people use the information from the data warehouse and BI applications. "By mining the metadata, companies can understand who is accessing the information, how they are using it and the business process flows attached to that use," he says. "Understanding this metadata will help highlight hot spots and provide the impetus for innovation and agility."

4. Improve critical processes and workflows
Improving critical business processes and workflows is essential to remaining competitive, because strong processes are the foundation for agility, customer satisfaction and innovation. Again, organizations must collect and mine metadata about processes to better understand how employees are working and where change is required.

Yet another adjustment is also required, Beyer says. Data warehouses have become mission-critical, which he defines as any computerized system that must be replaced by a manual human process when that IT system goes down according to the business service level agreement (SLA) criteria created to meet revenue, cost or service demands.

"If it becomes unavailable, a mission-critical system risks a loss of revenue, increased costs or adversely affected customer service," he explains. "Although this definition applies to data warehouses, they have not typically been held to the standard of high availability, support, maintenance and accessibility that other mission-critical systems have." To address this gap, enterprises must begin applying the same SLAs and high-availability solutions to their data warehouses as they have to other mission-critical systems.

5. Manage governance, risk and compliance
The growing management and cost burden of regulations and industry mandates is forcing many enterprises to look to IT to support governance, risk and compliance programs. These initiatives can be designed, at a minimum, to meet auditing and reporting requirements; at the other end of the spectrum, they can automate controls and provide monitoring technology in the hopes of creating additional performance benefits.

From a data warehousing perspective, organizations must be aware of the risk implications for each choice. "When an enterprise is merely compliant, it is in a minimalist state," Beyer says. "By that, I mean that the company keeps only what the law requires and no more. But other enterprises choose to keep more data without realizing that they've created risk for their companies by incurring potential liability. In managing the data warehouse, decision makers need to consider this concern. If, in your governing strategy, you decide to keep large volumes of data, make sure you are working with your risk team to ensure the company is protected."

6. Maximize performance, profitability and competitiveness
As companies strive to grow, executives must be careful that IT initiatives such as BI and data warehousing are deployed across the enterprise, not just departmentally.

"Many organizations use BI to enhance cost control, but they do it at the departmental level," he explains. "In doing so, you can easily begin operating at cross-purposes or even pushing costs from one department to another or from automated to human processes." Instead, enterprises must consider the people and processes involved in the BI initiative and structure the technology accordingly.

Data warehousing and BI can also help an organization improve competitiveness and performance by using the data to enhance customer service. "With these technologies, I can treat all of my individual customers with the level of detailed analysis formerly reserved for the business as a whole," Beyer says. "Companies can figure out what customers want when they want it and make sure they get it."

It all adds up
As a personal example, Beyer cites an insurance company that is attempting to get his business back after a dissatisfying experience nearly a decade ago. This insurer offers a good example of how organizations can assess the competitive value of their historical information, weigh it against the risk factors of retaining the data, and then use data warehousing and BI systems to identify micro-trends.

"It's important that enterprises begin tracking the effectiveness of their analysis, so they understand how it can be leveraged across business processes," says Beyer. "Only then can you take your data warehousing and BI initiatives to the next step of supporting the entire enterprise and achieving your critical business goals." T

Cheryl D. Krivda writes about the intersection of high technology and business practices for publications and corporations worldwide.

Photography by Greg Auseth/Maki Strunc, golf clubs courtesy of PING

Teradata Magazine-June 2008