Performance Controller

Last month I visited a large retailer, who had asked our company to help them with a problem. Their diminished response to market capability had been magnified by key information not being available until way past the use-by date. This was  threatening their ability to make timely business decisions and remain competitive.

This was the picture I got when I looked at how useful their information was when it was ready 3 weeks into the month.

Best Response Time Value

Getting a handle on timely, accurate and useful data is a big issue in many organizations. I face this over and over again with clients. Even the very good ones, with lots of resources to solve the issues. still have problems. Those with large well organized data warehouses are particularly vulnerable as disparate information needs place demands on data delivery such that flexibility for change shrinks in time.

As we went about the discovery process to identify bottlenecks, I was reminded of an experience I had at Unoval now Chevron in 2002 when a project there uncovered some big issues in what they thought was good data. In that instance Chevron, had commissioned us to implement a large performance management system with planning workflow for their complex upstream exploration and production operations.

Early in that project we loaded 15 years of detail data into a backend analytical database. This included the next 3 year plan that had just been completed.  Although valuable data was visible early in the project, no formal business use was made of it until sign off and rollout strategies were completed. That meant it had it wait until all processes were competed nearly 5 months later.

About mid-term in the project,  as a routine, I was discussing progress with  the CFO.  He was the project’s chief sponsor and very switched on. At that meeting I tested a concern that buy-in was taking too long.

He just laughed and said, “Your team  have uncovered so many problems in our data, I am not surprised people are hard to engage. They are so busy chasing the bugs that have come out from under the rocks you turned over “.

That was my moment of truth in what went on to be a most successful project. It also set the mould for delivery value management of many similar projects since.

Now back to my retailer client of last month, and 7 years on. They had what seemed a quite a different problem,  being constrained by timely usefulness of reports.

When I looked at what the  Operations and Executives used to manage the business, I found lists of product performance variances totaled by category, segmented for each  branch and channel of the business. Nothing fancy, no charts, no dashboards, no blurb, just simple columns of comparative product detail. On each row information had the budget and latest forecasts against each item also showing month and year to date values.

Simple as Simon says, isn’t it?  It looked very detailed but the patterned style of reporting where larger % stood out, told me it was easy to spot issues and get a sense of what as going  on. And you can guess why they wanted it? Yes, so they could pull some levers on hot spots identify non performers and fix down trending items to stay on track.

In my discovery process I also asked the COO how their planning and forecast process worked in the operational since.

He said, “Managers re-assess product balancing weekly and do month and quarter updates to show how they plan  to achieve their target. They do this by writing the new numbers on the page,  then they get their assistant to key that information into the system. Simple and effective isn’t it?  He said with a smile, “and it takes a day a month”"

I could not even bring myself to comment or make a suggestion as it seemed like I would be borrowing his watch to tell him the time.

But to make the grade meant making decisions so I then asked him how that works and what he needed to be sure it is effective.

“That is easy too” he said, “Things like optimizing competitive price and position are local issues that managers gauge well, being on the spot.  And we have heaps of other benchmarks and intelligence in our database they can use.  Interpreting the lists we are very skilled at and we use them well with market and on the ground information .

Tactical planning is driven highly by competitively positions which needs very up to date data. Hence getting the lists out earlier is our issue. In a pinch we can make do on intuition and walking around for a while but in the end we need the data to remain on top if  it all. And then we can to plan well and take decisions to stop erosion as we see business begin to walk out the door.

Most in the retail world understand that it is also as much about social environment as it is about product and price. Once customers desert in significant numbers to fall below critical mass, the Empty Store Syndrome sets in and death is almost impossible to stop.

What we want is good data early enough to react to it - no more no less.

Before my COO meeting I had been with the Finance team who prepare all the reports.  They told be me their process to deliver reports meant extracting data from the data warehouse, then cleaning it up by sorting out processing errors then updating organization information.

Once done they then merge all this with offline comparative data including the budget and the previous year to date in summary by segment and product.

Then around the third week of the month they released it and were then invariably deluged by questions about detail and organization changes that finance had not caught up with. This was all done in aggregation spreadsheets that had them to prepare and send out profit statements and the complied lists with of all the relevant comparative product performance information.

Earlier in the day I had also met with two key Business Unit Execs who told me their frustrations with accessing the often incorrect transaction data in the data warehouse. Their concern too, was waiting too long for information, that validated it but  arrived after the horse has bolted.

Roughly the AS-IS process looked something like this in February:

“Why don’t just you pull it together in a analytical tool and let everyone have a look at it early in spreadsheets, linked to it thru the Intranet” I offered. “None of this is new either and doing this may be an easy fix, rather than waiting weeks till all the reports are compiled and then emailed out to recipients”.

The response was not as I expected but was very succinct.

“We are not going to spend millions and take months on a BI project. We need this now and anyway the issue is not the reports, but the processes and bottle necks that delay compiling them”.

My response was equally succinct as I could see their confusion after streams of BI salesmen had obviously been in there over time trying to sell them BI projects that would fix all their ills.

“Any competent person with basic script to query the data warehouses should have something running  in a couple of weeks to start managing improvement”.

So often a full BI project is not always needed. What is first needed is the data pulled into an analytical cube and connected some form of analytical off the shelf reporting tools so everyone can see the results. Drill down to go to the details is important  and even the transaction sometimes. With such capability reports can then total and do variances along with and other comparatives all in alignment. That is what makes it all work so well, not the glitter and glitz

It will not fix all the problems, but what is so powerful is they show up. Then everyone sees all the issues at once and will work to fix them to get fast results. And then all the rest will just follows.

Like us in our work you may find as the lights go and the cockroaches can be seen you get busy solving the real issues. So I guess there is some truth in the saying, “When you live by the sword you can die by it too”,  but to feel safe you do need a sharp one to fend of the doubters and faith that what you do will cause the data to sort itself out as it must. Having a few scars to know where to strike for a win does also help.

Like so many of these projects it is fun to see the stuff that runs out from under the rocks they turn over. Miraculously, like Chevron, the data, seems to magically starts to bi-pass bottlenecks and clean itself up.

For our retailer now the new process looks like this. And just take a look at those faces :

As blind Freddy, often asks me. “Why does everyone focuses on process and presentation when for most people data is the issue.

My advice is if you want to buy a business intelligence system first check with you IT as the chances are you already have one and don’t know it.

But even if you have to go out and buy one, go get one for dummies first so you can just get a handle on things in an analytical format first. And it is not a big deal.

In the end what you really want is something that answers all your questions or loets you ask them as it integrates to the total performance management.

All that good stuff will naturally follow without any fuss if you get it started with some early results.

-0-

Gordon Wood is Executive Director at Sherwood Group Consulting