Streamlining the Policy Factory

You can't measure its output in widgets forged or production targets met, but the Commonwealth Department of Finance and Administration (DOFA) can be fairly described as a massive policy factory. A crucial production unit in the machinery of government, DOFA's assembly line grinds out policy advice to ministers and service delivery agencies, and mills payments to commonwealth creditors and employees. It also engineers complex financial transactions like the sale of commonwealth assets and - in a triumph of structured complexity - assembles the annual federal budget.

In the DOFA factory, finished product is carefully crafted then machined from components made up of complex and diverse inventories of financial information.

But chief financial officer Alistair Cochrane knows all too well that financial information is not only deadly dull but also tends to mean very little to anyone but financial experts. So he has set out to change all that, relying on business intelligence (BI) to empower users across DOFA's multitude of business units.

With 800 staff based in Canberra, the department's key roles are to deliver the budget for the commonwealth; advise the government on budget policy and analysis; implement government reporting frameworks; and provide shareholder advice on behalf of organisations such as Telstra and Australia Post. DOFA also plays a central role in the government's key and ambitious public sector reform agenda, which is challenging boundaries in many areas in the bid to build a high performing, responsive public sector that operates more like a business.

So far there have been mixed results (see "Change for the Worse", CIO July 2000).

A key objective is a significant improvement in the government's ability to deliver on its public sector reforms by changing its method of budgeting and managing its resources. The government as a whole has adopted a more modern and strategic financial management framework based on outcomes and outputs and the principles of accrual accounting. DOFA sees business intelligence as a relatively painless way to empower end users as it strives to further those goals. The chief aim is to give end users the ability to do their own drill-down analysis, prepare their own executive-style reports and tailor data into meaningful information. The prime vehicle is a portal set up as an intranet site giving users direct access to BI tools.

According to Mark Morton, Cognos manager of market research and strategies, e-business is driving much higher acceptance of BI. "E-commerce, customer resource systems, supply chain management systems - all of this opens up the need to have information move from person to person within an organisation, and to customers and partners who are external to your organisation. About three-quarters of our sales now are Web-based, so we're clear this is the direction that those kinds of systems are moving in." Independent market-research firm Ovum predicts that business intelligence will blossom into a $50 billion market within the first few years of the new millennium.

For DOFA, BI's main value lies in helping the department extend the accessibility of financial information - once meaningful only to the clique of trained financiers - to the uninitiated. At the same time, business intelligence tools are helping to streamline and invigorate the IT functionality of the department.

Answers at the Speed of Thought

The fundamental idea behind BI is to provide information quickly to end users in exactly the way they need it, storing data in a multidimensional form that allows users to "slice and dice", "drill down" or "mine" to get the exact information they need. That sits very nicely with a long-held vision of Cochrane's, driven from the frustration he experienced in a previous incarnation as CFO. At that time, apart from exceptions for sales reports, most financial information came in the form of monthly reports. Cochrane's vision includes "having financial information available on a weekly basis".

"As a senior executive, I kept wondering why a system hadn't been developed that would let me log in on a Monday morning and find up there on my screen the indicators of my organisation. Or, alternatively, provide things I should look at, based on the parameters that I set, and have the system do it all for me." But Cochrane says financial systems even today make that impossible, probably because their design tends to be driven by accountants. So experienced themselves at getting information out of the systems and then analysing it, they have no interest in incorporating that functionality.

That's where BI comes in. Central to Cochrane's strategic mission is an upgrade of DOFA's reporting systems by integrating BI reporting tools with the department's new accrual accounting software system, QSP financials.

"The biggest benefit is you can have financial information online, key performance indicators (PKIs) available on a regular basis," Cochrane says.

"What we're heading towards is having financial information available on a weekly basis, with reports being brought up to date so executives can see an update on their indicators rather than waiting until the end of the month. "We now have our reporting to a point where we have seamless integration of financial information and we're enjoying the full benefit of it," he says. "The exciting part is that business intelligence has the potential to help us to re-engineer the way we manage and publish information in all its different forms."Empowering the End User One of the key benefits is that report writing is end-user driven by virtue of its deriving from the finance function. "This aspect of business intelligence will mean that an end user - be it an accountant, business manager, technician or CEO - can query, analyse or generate any information needed. It is an evolving process and one that takes a while to set up because users change their demands," Cochrane says.

He says that ability to create an integrated and seamless approach to report writing was a key driver in implementing a business intelligence system. "The main business issues we had were that our financial information wasn't linked," Cochrane says. "By that I mean we started off with a number of financial systems that basically were all brought together under one line with QSP. On top of that, with each financial product comes a basic report writer; but what we needed to build was financial information for business to access.

"We basically sat [the Cognos report writer] on top of our QSP [financials] and had the two working together to help provide accurate financial information. That was the key thing we had in mind when we started this project," he explains. "We spent some time setting it up correctly to ensure that the information that comes from QSP gets written by [the report writer] so that the information is consistent. The big benefit [of that] is integrated and seamless reporting so the user can go into the screen and drill down from a screen that's presented, as if everything is all happening behind. It is - but we had to spend quite a bit of time making sure all the links were there." DOFA is now producing more meaningful executive-style reports that provide managers with specific information. "Unless you understand it well, most financial information is boring. We're now able to be creative in the way we present data to managers so they can see the salient sections quickly and easily. This enables them to respond more rapidly to changing circumstances and make better-informed decisions."Portal Power Cochrane says the latest version of PowerPlay Web allows DOFA to use the Upfront Portal as a front page to its financial information. Users can drill down to any transaction, in any given period, leading to greater flexibility and more detailed analysis. The portal is set up as an intranet site providing access to BI tools directly through the site. Users can access everything from their coups (standard monthly reports) to reports, policies and procedures.

The portal provides a single, personalised point of access to the PowerPlay analytical engine, the Impromptu reporting tool, and Visualizer data visualisation technology. Analysts say increasing numbers of organisations are organising their knowledge and information into taxonomies and making those accessible through portals. They also say users find having a standard Web browser-type interface simplifies their efforts and reduces the support efforts of the IT staff. According to systems accountant Russell Judd, DOFA is keen to provide a full portal environment to end users that will give them access to financial data plus numerous extras. "Everything anyone needs to access from the financial management group they'll be able to find on that portal," he says.

Return on Investment

Cochrane says DOFA has yet to get a real feel for the anticipated ROI on business intelligence; it will depend on the way the tools are used. "The return on investment comes when you are using the business tools to their full capacity. It is really important to set up the systems properly and to dedicate a lot of time to training to ensure users understand the capability of the tools," he says.

"The product is extensive, and I think the return comes when you use it to the full capacity. We've set up the systems and are going to spend a lot of time in training to ensure the end user can get the real benefits from the product. But we've centralised the licensing structure so we've got a handle on how many users we've got so that we can really drive home a strong return on investment." Business intelligence requires high-quality information that can only be derived from a high-quality data resource. Organisations relying heavily on BI need to recognise the need for - and the value of - a high-quality data resource. Cleaning up disparate data and producing a high-quality data resource that truly supports business intelligence is a priority.

Cochrane says DOFA is still working on the accuracy of the base data and on ensuring source data is as accurate as possible. "The issue is garbage in, garbage out; so we're working a lot on getting that information right at source, and then developing the systems or the processes around that to get the stuff as accurately as possible," he says.

There are also cultural issues that need to be addressed: the need to get information updated regularly and ensuring the processes are in place to see that that information is always accurate, Cochrane says. "For example, we receive money in from our debtors each day. One of the key objectives is to have the money banked the day we receive it, have the banking report updated, and to have that data in our financial system the same day so we have online debtors information. "What that means is people recognising that if at 2.30pm they get a cheque for $250,000, then just because the balance is off the ledger for the day, it doesn't mean they keep it in their drawer for tomorrow."We Can Handle It According to Judd, crucial to the project's success was getting a "really good handle" on the software's capabilities. To help it achieve that aim, DOFA brought in a consultant to do much of that work.

"Another implementation issue is having the vision to see what you can do, and ensuring people [inside the organisation] do not have blinkers on as to where they're going in the future," Judd says. "We started the process some time ago by getting Cognos to come in and do a demonstration of what was possible. I suppose you've got to open your eyes to where you can go. I think a lot of the time we sit back and are content with what we've got rather than opening our eyes." Judd also says training was vital to encouraging end users to take up the new capabilities. "For instance, one of the products we're using, Visualizer, has the ability to put up graphs off data in the background. You can actually run it so you can set up a display at a certain [time frame], then run a display through three or four different screens in one go, and you can zoom in and out as well.

"If users are going to be able to do that for themselves, we really need to plan the training really well," Judd says.

Copyright © 2000 IDG Communications, Inc.

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