I thought I'd drop some information today on some updates in the RFID industry for the usual purpose of preparing the information management community. I have previously, either on the blog or on my podcast, referred to several facets of the industry, many of which have had some progress recently.

1. The EPC Standard - Has become the defacto RFID Spec in China
2. US Passport containing RFID chips - A reality as of August 15
3. Military tagging - Spanish military adopting RFID (for supplies)
4. Privacy concerns - Not much to say here except that Hello Kitty RFID-blocking card holders are now available. You don't mind the Hello Kitty branding for a little privacy do you?

To be sure, not all is gung-ho linear progress however. Start-ups such as Alien Technology are struggling financially.

A few weekends ago, I had the privilege of taking part in the annual Scott Humphrey Pacific Northwest BI Summit. This event boasts the highest repeat attendance possible for any form of “conference” I’ve ever been a part of. To call it a conference though would be misleading. It’s more like a fire-hose of information exchange, both formal and informal, between people from all sides of this industry. Fellow b-eye bloggers Claudia Imhoff, Colin White, Jill Dyche and I were the featured attractions, bringing the topics and sharing our opinions.

Attendees are listed in Claudia’s blog, where she has way beat me to the punch in summarizing the event. During the roundtable sessions, the 4 of us each introduced a topic. My topic was RFID and I previously posted the link to the first 15 minutes of topic introductions. All 4 of our topic introductions are podcasted and available at the link, as are interviews with each vendor representative. Discussion followed onto the introduction for about an hour for each topic, but the chosen topics, and more, were discussed throughout the weekend.

The chosen topics actually fit together quite well, with, for example, RFID data needing master data to be understood and operational BI to perform the proper action. I found it interesting that here we were, 4 people who gained prominence with data warehousing, all hyper-involved with master data management with a book, a full-day TDWI class, an industry report and, most importantly, advisement and architecture of numerous of the first customer MDM applications under our belts. It’s all information management, a twist on current data warehouse architectures and using constructs that we had begun to implement for our clients already anyway.

I find operational BI interesting and blogged about it co-existing but taking cycles away from the data warehouse here. There certainly is more of an emphasis on business intelligence these days that does not necessarily involve the data warehouse directly.

Other opinions I brought had to do with the emergence of EII, projects on localizing economies, data mining gaining traction with a wider base, various activities taking cycles away from the data warehouse, how information security conscious the industry has become, how great Crystal Xcelsius is, Project Megagrid, and other topics that the attendees needed to be aware of.

Fun was had as well as only Oregon and Scott can provide – jet boating and kayaking. Colin showed us the stars with his magnificent telescope, laser pointer and knowledge of the sky. And I led 2 torture - I mean Yoga - sessions. I’ll post the stealth pictures I took of the attendees doing yoga over time as necessary. ;-)

Industry analysts, vendors, press and information executives should make it a priority to try to get invited to next year’s event. If it’s hard to think that far ahead, I’ll be posting a reminder in about 6 months.

Below are some learnings and tips on BI/DW ROI from Neil Freake, Senior Manager of BI/DW at Scotiabank, a client who I had the privliege of presenting with yesterday at the Shared Insights show. The presentation was titled "Providing ROI with Business Intelligence." This was an additional slide so it's here, as promised, for the attendees... and all of you.

- Financial Models need to factor in attrition rates
- Calculating “lift” is often not a viable argument (wholly dependent on assumptions)
- Benefit is based on Profit NOT Revenue (ergo…understand margin calculations)
- Financial Models must be more accountable when defining costs (i.e., SOX)
- First Run Cost Estimates are always off +/- 25%
- Payback Calculation – two camps
- Cost Camp: begin to calculate as soon as you incur costs through cumulative life of benefits
- Benefit Camp: Calculate payback after project has been implemented (Not recommended or realistic)
- Soft Dollar benefits are easier to argue / more difficult to prove
- Hard Dollar benefits are rare, more difficult to argue and almost impossible to prove.
- Most organizations use a 10% interest rate when calculating NPV
- How well you define your assumptions will dictate how well your model stands up to financial scrutiny
- Every financial model has weaknesses (highly subjective)
- Would have to be in a lab to prove benefits
- Double dipping benefits – most common error in business cases (who has the right to claim a benefit?)
- ROI is purely an internal (and sometimes external) marketing tool
- The higher the dollar amount the more scrutiny your project will face

Tanjian Norman commented on a post from 2005 as follows:

"DW is dead? It seems that EAI/EII or more importantly service enablers like SOA are complementary to a DW environment. Please elaborate on why you think DW is positioned for replacement by EAI/EII technologies."

He was responding to my post in which I said, among other things: "DW will eventually go the way of EAI. The extra data store in the picture is redundant and the market eventually drives out inefficiencies."

I thought I would bring my response into a new post...

No, DW is not dead. It's alive and well and thriving. Almost every midsize and up company has at least a semblance of one. A robust data warehouse is highly desired and sought after everywhere. My point is about the future - when exactly I do not know. I agree that EII is complimentary-only to data warehousing today, but its merits should surely be considered.

Data warehousing is evolving. New data warehouses and data warehouse rearchitectures are well advised these days to consider not building a pure batch-loaded data warehouse where all analytic calculations, including master data and all reporting is done. There are several layers of calculations, functions and even data that are no longer necessarily part of a robust data warehouse reference architecture.

1. Master data calculations - Master data is not ideally calculated in a downstream data warehouse. It is needed in the operational environment as well as the data warehouse. As time goes on, the data warehouse will be a receiving system for the master data.

2. Operational business intelligence - I blogged about this here. There is certainly a lot of calculations that do not, or cannot, interact with the data warehouse in order to be effective. This can go well beyond basic operational reporting from a single system.

3. Yes, EII. EII is able to facilitate multi-system operational reporting and business intelligence. Some clients believe that several of their data sources do not need to be fed into the data warehouse if they can run EII queries and eliminate the redundancy of having the data in multiple places. EII can handle multiple databases in multiple formats, referential integrity, XML and basic transformations. EII still has a long way to go (query tuning, 2 phase commit, business metadata, memory constrained, etc.) and data warehouses are still absolutely vital, but it shows promise and is another factor chipping away at the data warehouse requirement.

4. Modern ERP - There was a time when ERP vendors debated that the data warehouse was not necessary. When this was proven untrue, they provided packaged data warehouses so at least they kept some of that business too. In the background, they've continued to add functionality to the base ERP to keep chipping away at the data warehouse requirements. Today, one of the striking things about ERP systems is they are keeping history data indefinitely. Having a historical data repository used to be one of the main reasons for building a data warehouse, but that is not always a data warehouse requirement any more.

And finally, a "real-time" data warehouse is evolving to look more and more like an ERP system itself, with real-time feeds of operational data, triggers and analytical applications. So, the definition of data warehousing may be changing to keep the term active, but the data warehouses themselves are evolving.

I hope this helps. Feedback welcome, which could be interesting...

I was about to approach someone on the street yesterday to talk about my blog. But then I noticed she was wearing one of these t-shirts so I decided not to.

(T-shirt available at http://www.onehorseshy.com/.)