Performance Controller

"However beautiful the strategy, you should occasionally look at the results"...WC Print

There is so much conversation about social media, but it is not only network marketing media who are interested in exploiting its potential. The criminal elements in our communities, it seems are very interested to see how they can put it to use.

Are you one those people hooked on twitter who tells the world every time you leave home or go to some event.

If you do, think again before you this do next time. You may well be telling thieves to take advantage of you.

In his oz-analytics post this week headlined mining social media, Steve Bennett updated us on a site he found that detail how robbers can now see who is not at home using simple twitter stream search.

For many of us who have our emails on websites and public profiles, we may also seek to simplify our lives in the explosion of social networking. For this can join it all up on Facebook or similar sites. But beware what you include as it does not take super intelligence for someone to use this to put it together and then watch and wait till we tell them the coast is clear.

Any robber with a phone and a twitter account, may get an our open invitation from to take what he likes because as we tell him we are not at home. A simple key word search on twitter give easily robbers the scoop on you . If you don’t believe me, do a search and see how many people say they are not at home. The web on the phone also provides maps and satellite photos of your street and your house to make the job plundering job even easier And it is even easier with an alerting tool to send an email when someone says they’re not home.

The only issue then is it may get a bit crowded at your house if more than one robber turns up with the same idea.

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Continuing the theme on getting BI value,  a recent Forrester article  Getting The Most Out Of BI , warns against getting too excited about lower initial costs in deploying BI options.

Estimates are at least 80% of any BI effort lies in data sourcing, data integration, data cleansing and modeling,. "So while lower-cost BI alternatives will save you some dollars in building reports and dashboards, that’s only 20% of your cost and effort," Forrester says.

Forrester researcher also goes on to say  more effective use of BI tools can lead to more successful sales and marketing efforts. And the technology can also be used to motivate employees by creating performance management environments that reveal each worker’s productivity relative to his peers, stimulating healthy competition. "Not only does such information help workers make better decisions, it encourages them to to improve their standing in the organization."

Once you add a BI tool to an organization the bar is lifted as performance becomes transparent. Cockroaches, as many refer to them and some can be big ones, will always appear in the data as you lift the rocks in a BI implementation. They must be eliminated as they will undermine the value of the BI data and the worth of the tool. If a number is wrong or does not reconcile to another, in a BI environment it gets quickly challenged  As a result the organization ends up with higher quality at all levels.

Underestimating the data cleaning effort is folly and must seen as part cleaning things up that have also been previously hidden. Housekeeping to harmonize data is a constant process and part running the business and not a just a once off. But getting it focused and under managed control is critical and takes time. 

BI projects may well be constrained by data quality at first. But they get the issues in the open very fast and very well so they can be seen. The added cost of resolving then must be recognized and born, but the payback in the end is much higher too.

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Harmonizing organization data and getting easy access to information are mission critical values for IT.

These are also quite often hard to meet without a high risk investments to create a data warehouse.

BI tools can achieve this in a low risk way as a natural outcome of seeking business benefits, like increased quality in managing sales growth.

In many organizations IT strategies champion and support BI implementations. Their aim is  to enroll the business to improve this critical back end service as a strategic way to remove constraints that limit achievement of business performance objectives.

It is interesting that our poll, so far, sees responses largely on the business values with these two high value items lagging. (Ralph Eastman – Poling the BI Value)

Perhaps business leaders should consider how they can align IT on the value of BI to IT and challenge this critical function to consider the value they can bring with BI on a wider scale.

Without a solid foundation of harmonized easy to get to data, none of the other values are possible.

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Do you struggle to get the numbers you need to manage your business? Many others do too!

Dashboard reports are of great value when they always reflect the reality of the here and now.

And when they come to life with always current information and an ability to rotate perspectives and drill to detail in moments it gives a buzz that, for some, is better than sex.

This week in our firm, our professional team in Asia at Sherwood Group Consulting using Infor PM. rolled out the preliminary design and a working prototype of a BI tool for a large sales force based organization.

Impressive, beyond our expectation, excellent and just what we need were some of the comments, along with it can do this that and the next thing on analysis.

It made me feel good to hear that, but the truth is, all we did was assemble their data and present it in an homogenized way in a BI web tool.

In this early adopter stage in their business, with warts and all and unfinished screens, this had people just so pleased to see their data assembled and in a meaningfully presented way, in their familiar organization structures. In the end, despite any effort it may take to clean up the data, that is all that matters.

They were also excited that  it presented as useful information and that they could drill down  immediately. This meant there was no need to go elsewhere for more information. Canned reports can be reduced as people will already have what they need to run their operations.

With much of the hard work done, as this BI tool gets more populated on a daily basis it may never get past the design stage . Why so? Because it will likely be constantly changing as the business learns how to manage with it and matures its use. No issue there, as reflecting the most up to date view of both the data and the organizations is what BI tools do well. Things like products, as they are added to the database, then appear in context, as the numbers come in. This also occurs without any need to change the reports.

Over time, in any business, everyone knows that the dynamics that created a report in the first place will mature as intuitive understanding of the base level data evolves. This often leads to legacy reporting being no longer focused properly or even being relevant.  As for the myriad of reports that have been specified, in our BI rollout, there are now many questions as to their need.

For example on any given day in the month a business typically needs to be able to see a single value of its sales.

  And then to be able to drill down into the lower levels and the details, like products, the customer or group, the business and channel it was sold through and even the salesperson who sold it.

Being able to see the invoice detail may be useful too.

And to be sure sales are profitable, operations need product gross profits all at the same levels,

Canned reports typically only report at the end of the month and then only in summary, which is far too late to stop any real time attrition.

Vital information like the component cost and who suppliers are plus breakdowns of department activity costs that went into to production and getting things delivered is a nightmare to get hold of.  Even Blind Freddy knows that a canned reports only tell us to go looking. But with BI tool it does the looking too and  it is a snap.

Canned reports simply fail to deliver at the levels needed to run a business. And even if they get half way there they are slow to produce and clumsy to use.

Using traditional reports can be as unwieldy as the middle ware process that prepares them. In larger organizations this is typically the cause of much of the frustration where the dynamics of matrix cross functions see lags dilute focus and time to take action.

So why do so many organizations persist with traditional dashboards and summary reports that just focus on fixed or functional areas?

And why do they persist in spending valuable time to dig for the detail, by going to another report or a listing of the raw data, to do further analysis?

At the grass roots, getting sales information may be quite easy, just by listing the invoice detail. And if your supply chain and costing people are on the ball, costing sheets will be there as well to show supplier and department activity and costs for each product.

If you think BI is new then take a look around. The tools have been there for decades but are often lost in the functional Sales Hype or in IT speak.  You will find managers using sales invoiced and sales order lists to get sales information! And if they don’t have a decent system to roll it all up and group it, a personal spreadsheet will likely be  doing  the job and it will also work for analysis. But what ever way they do it, linking product sales and cost information will mean they can calculate gross profit on each product sold, as it occurs.

With  this information, even in such tools as an Excel  pivot table, it can easily show total sales for the day month or year for any business by channel customer and salesman etc.. And by adding a dimension for budgets and agreeing on targets, performance can track that way too.  So you see, BI is nothing new.

In large and small organizations alike it is that simple. Bigger guys have more resources to access their database directly with enterprise BI tools that allow this “business intelligence” to be applied directly to the raw data. But the process is no more or no less the same. They use the raw information to first rollup then drill down and analyze in detail so they can ask questions that allow them to take actions to correct matters of concern.

But even for small guys, having disparate systems and processes still leaves a quandary. Organizations who have flattened to cut out middle managers who once did the analysis, see direct access to detail no longer a choice but an imperative. Small guys need it too as middle managers have always been a luxury so they generally only do BI  themselves the hard way.

These days with efficient and well organized transaction systems, adding a simple BI tool on the top allows executives and mangers to see the big picture then get straight to the detail.

Managed the same way, information like sales activity can mean sales people can see the value of their weekly activity such as lead generation and lead conversion and so on.

Here are a couple of examples

Sales Activity

By collating sales activity for example, lead generation and conversion can be measured weekly. With numbers of leads generated, calls made, meetings booked, and prospects qualified, sales closed, and sales completed added to tracking information, the performance can be measured to focus time on helping the back enders .

This is vital to ensure sales numbers are achieved even for small teams but even more so in large widely spread sales forces. For  good salespeople they do this anyway and they also keep track of commission they will get.

Sales Development Impact

For cross functional activity measuring  the value of sales force development and customer service impact is vital to know where to focus to grow the business. By tracking these activities to a salesperson’s results makes it much easier to focus on   areas that need development to improve.

Pre and post training evaluations are also very easy to see once you connect the development activity to the sales person’s results.

Managing business is not about chasing reports but about systematically managing the numbers on  sales and operational aspects that drive the business.

Large or small, without good business intelligence, access to data  is still seat of the pants or intuitive management, despite the plethora of static reports that continue. In large organizations with thousands of players, reactive response management is too slow. So the need for a BI tool is a “No Brainer”.

Dashboard reports too are of great value if they always reflect the reality of the here and now. And when they come to life with always current information with an ability to rotate perspectives and drill to detail in moments it gives a buzz that for some is better than sex.

In the past as we focused on speeding up or reporting processes our aim was  spend more time on analysis and less on the preparation.

These days with the business intelligence transparency maturing in organizations, it is letting managers and operations alike get to the heart of their issues on a day to day basis. This means they spend less time in analysis more time in action.

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About

Sherwood Group Consulting        Performance Management matters Since 1993. Sherwood Group Consulting has been advising business on best practice in reporting and business performance management. As specialists, Sherwood Group Consulting has high expertise in key aspects of business management and finance across a wide spectrum of business domains. Using leader software and working closely with vendors we add change management and project delivery services to the mix to make it all work.   Australia – Executive Director – Gordon Wood Essendon Fields House, Level 2, 7 English Street Essendon VIC 3041  +613 9018 5302 Facsimile: +613 9438 4278  Thailand -  Director – Kitipan Kitbamroong Level 29, Offices at Centralworld 999/9 Rama I Road Pathumwan, Bangkok 10330, Phone: +66 2207 2340 Facsimile:+66 2 207 2626 . Singapore – Director – Larry Russell Level 42, Suntec Tower Three 8 Temasek Boulevard Singapore 038988 Phone: +65 6866 3340 Facsimile:   +65 6866 3636 Europe / Germany Director – David Brown Springiersbacherstrasse 10, 56862  Punderich, Germany. Phone: +49 6542963578  Mobile: +49 1578 497 8614

 

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I recently had a chance to join a Kickoff meeting of a very interesting BI project.

Normally stakeholders and key players are invited to join such meetings as they share an interest in the outcome of the project.

Stakeholders also bring a unique value to the project, especially in the beginning, aligning together to support it to get off to a good start.

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According to an interview with Nobel laureate Joseph Stiglitz by Suttichai Yoon of National Multimedia, Asia itself has a huge domestic potential by having a large population base with savings and a wide demand for investment.

This is extremely true especially when your business is a service base and revenues are generated from services. Services business more or less focuses more on domestic economy compared to international trade like US or Europe.

In an article “THE CFO’S ROLE IN THE DOWNTURN”written by Colin Walter from PWC. He mentioned

Cash is king: Companies that came out of the last recession on top had an average net debt-to-equity ratio before the downturn of half that of the companies that were not successful. They also had more cash on hand.

and Taking out the wrong costs can be worse than taking out no costs at all.

I’ve meet business owners that focuses on cutting cost no matter what, the question is “where in the company should we start focusing?” Confidence on these questions comes from a reliable management information as cited by Colin that;

Reliable Management Information: The more volatile the market, the more you need to be able to trust your information.

Curiously, most companies stick with their same old reporting templates and key performance indicators (KPIs) because "this is how we’ve always done it". Forecasting and scenario modeling are critical in volatile markets.

Service companies are now likely starting to invest in building their data warehouse and investing in Business Intelligent to support their business needs in volatile markets.

Those already served or underway will benefit especially now as the economy is showing signs of up turn.. Those who don’t begin  to address this and get this capability will surely have difficulty to sustain

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Business Intelligence is like an information scratch pad. Many people  struggle with the concepts of business Intelligence, the activity of gathering business data in a sensible way that can be used to make decisions

Like most things abstract, the process and outcomes may differ from person to person so in the end it is a personal definition.In a business performance sense however it is useful to decompose it into the activity rather than the process or science it covers.The process of reporting data is called reporting e.g. the printed phone bill. The process of analysis of data is called Data Analysis The ability to do both in combination to provide analytical reporting is generally the same as Business Intelligence  Here are some examples of business intelligence related to an improved financial proposition

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 Poor decisions are most often caused by lack of understanding, not lack of data. But another challenge is unquestioned acceptance of the business processes being measured.  At times many appear very logical, but are often obscured by the very data itself.

I notice when managers look at unacceptable results, they often do one of two things. Me too!! They either pick up the phone to call someone to ask for more information on why. Or they  pick up the mouse to dig deeper for the reason.  Once the answer comes,  corrective decisions are made. This tram line management style is a norm and the bias of most Performance Management systems. It works well to make sure the process,  the “tram”, stays on the tracks.  But many fail to follow the learning rule that to improve you need to look around at things nearby that may be obvious.

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Figures can lie but lies cannot figure. That was a saying our business school lecturer would throw at our class to make sure we presented correct numbers in our stories.

There are many variations of this. Possibly the most nauseous, but still very useful is what we hear still being trooped out by IT people and software vendors is their aim to give us “The same version of the truth“.

But to be fair, these days in the transparent world of information and behavioral influence you need good systems for recall. Or to use another well warn cliché , “To remember your last lie”

Here is something out that makes this point.  Headed Obama Quietly Killed Two-Million American Muslims, the piece refers to conflicting estimates of Muslims living in America.

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Stephen Few and Nigel Pendse, are examples of business experts, each with quite distinctly different styles and modes of working. Both call it as they see it without fear or favor .

They can do so because they do the ground work and run their business in a way they can claim that right.

Pendse, is widely known and respected by all in the performance management business community that he serves on all continents,

Stephen Few, is a US based consulting specialist and author. His style is no nonsense to the point and he calls a  spade a spade.

Something each wrote recently under a clever headlines got my attention.

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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 indentify bottlenecks, I was reminded of an experience I had at 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 and 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.

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A business colleague recently told me a success story of a small business. His client had acquired it and then significantly improved and transformed it. 

His  philosophy was, Small business survives only three 3 things namely (1) customer service feedback (2) well managed trust in your products and the people who deliver them and (3) care with planning and managing the cash. To manage and plan improvements, he used a simple fact based analytical  measurement methodology.

The background of the business, a restaurant, was that it was doing well with meals and refreshments in a good city location with a good mix of clients throughout the day and evening. It had reasonable turnover and was profitable by any standards.

The story begins when he took over. And It tells of the approach he took and the tools and methods he used. Incidentally his ideas up until recently were seen by many small operators as being out of reach and for big business only.  But as a professional businessman, our man saw it as just plain common sense and with experience, a must.

Initially as our new owner started to understand his new business, one thing he noticed was it had large swings on cooler days and he wondered how to fix that.

My colleague actually went there for dinner with his wife and his client told him about this. That lead to a short discussion on what information was in the Point of Sale (POS) cash register that had come with the business. It seemed it may reveal quite a lot, so they made a plan to meet next day to check it out.

When my colleague called for his bill he noticed quite a good POS information collection.  He wondered how far back the database went that kept the history of transactions. Typically, as his bill was itemized he knew it had products sold. He noticed too that it had a table number, ordered items, number of people in party, date, time bill paid and the waiter number plus more. All these were native facts collected that could help. He also found out when he asked the waitress about the process, that the systems could also record meal ordering and delivery times, and was designed to check kitchen lead and lag times.

He was then pleasantly surprised when his credit -card came back with a message saying  no charge. He thanked his host and confirmed their plan for the next day as he joked, about the ambient temperature for that service  time not being recorded and needing to look at that.

The next day when my colleague returned he found the database had information going back nearly 3 years. Interesting too, the prior owners, who rigorously trained their register staff to collect this information, but never used it except for daily tallying and checking customer transactions.

One problem he saw was the reports it gave were mostly static and screen based although they could be printed if you hooked printer. Of course being a front of house device it had limited access, which also limited opportunity to get any value from it.

The software package included was quite good, but functionally was workflow and transaction oriented for order recording and billing etc. One useful function in the database was a backend stock control and forward ordering interface.. But that had never been used if for no other reason than restaurants typically buy daily. Typical as with of most transaction based system, this too had no analytical reporting capability and comparative reporting was not possible.

By now the owner who was already good at planning and watching his key numbers, saw great value for this new information. He also realized this data could tell him a lot more than just how to cater for weather effect on his business. So he followed my colleague’s advice to invest in a business intelligence tool and some guidance on how to use it. He also networked the front desk machine so he had ready access in comfort to look at the information it held.

With this new found power and surprisingly with little effort to use it, the data he found was also quite good. Sadly still no temperature information showed up and the order and delivery times were not collected. But it did reveal a great deal about menus and time of day sales. With his analysis charts and comparative tables he could actually see the ebb and flow of the business activity through the day and over time periods. Some, like the daily and monthly revenue, he flagged to a dashboard for regular ready access.

Being able to simply compare what happened on a day to day basis or by week or same time last year and so on, was insightful and simple to interpret to make improvements. He even started trending daily activity looking for patterns, then walking about to see how he could improve things. Looking back at what sold well on certain times he found was also extremely valuable for planning menus.

As he learned more he had questions about his customer’s profiles and their habits and other external things like weather that drove business. It was by then he really began to understand what made his business tick.

One early step he took recording local weather information in his database> He also downloaded history from the weather bureau to look back on past patterns. Curiously he found just a few degrees change in day time temperature saw a big differences in demand for some items, while others had no weather correlation. He learned to understand this and switch his fair-weather only products to be, his quote, “LEMONADE STAND or CUP-OF-SOUP” and be more consistent.

In effect, he used his new business intelligence tool effectively to analysis and report on his business activity and be fully business aware of certain times, conditions and events in combination. He later added a modeling module, that further allowed him to set up and model his operational and business game plans in advance with great confidence.

The ability to recall menus in the database also removed doubt and memory issues. Succeeding chefs and the front of house staff could use this plan and be confident on menus that had worked best in the past. And importantly, they knew what had not performed, so did not make the same mistakes.

As he refined the business intelligence analysis he walked around and saw other influences on buying behaviors. Things like adjacent ambient noise levels he tested on his data and he then made format improvements to reposition things. He also looked at seat turn, location preferences and optimum occupancy mix (parties of 2’s and 3’s etc) and made changes to seating and service levels accordingly to increase volume.

One critical action from the weather analysis was to install clear plastic wind breakers and gas heaters on external areas that previously only favored fair weather. He also added cooling mist filtered overhead fans for hot days.

And being astute to maximize capacity he sought permits to have tables on the curbside for added fair weather coffee stop trade. This also enhanced visibility of the business. The extended area was a catalyst to him next acquiring the adjacent premises to open a complimentary sandwich and light refreshment bar. Incidentally that took food services from the same kitchen for hot take-outs. By now he had implemented stock control & was able to report profitability on each part of the business to see where to improve.

The owner continued to make observations as he refined his watch and correlated product behavior patterns. He even gathered loyal customer information and tested new products and services predictions using his data analysis approach.

In what had become a highly successful business, his planning model focus provided him with credible expectations based on factual experience and statistically supported assumptions and judgments. When he presents his business plans to the Bank for funding to expand and acquire more businesses that is never been and  issue,  He has since gone on to acquire more businesses to transform.

Thrilled to also be able to tell me this story my colleague also told me his plan to continue advising on his Managing “Business by Business Intelligence Model” And for this he recommended ramping up managed services to support business plans like this one.

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Climate change is an accepted fact, as are measured temperature increases over the last 50 years that are causing it. And C02 emission is well understood to be causing the planet overheating, with potential to destroy life as we know it. Energy depletion is a issue too, so cutting C02 by reducing energy is clearly a good thing if only for that reason.

As facts the understanding seems irrefutable. But is it possible there are flaws in the information intelligence that drives them?

This graphic oddly is against popular expectations telling us polar ice has actually increased so surely this must be a fake.

I am not saying one way or the other but if you are sailing you should watch your dashboard to be careful not to also hit an iceberg.

Understanding what put measures on the board in the first place, is important. But also is being alert to question and challenge is what good Business intelligence is about. So we need to be open to the unusual.

So when you get some information that challenges conventional thinking. It may be flawed. but don’t just ignore it.

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Today I was delighted to see Anthony Watt’s post on receiving Best Science Blog in the 2008 Weblog awards for his blog at  Wattsupwiththat.com.

 

Like so many (millions per day now) I follow this blog with great interest. Aside from the great information it provides on science, weather, climate change and related technology,  I am constantly inspired by the fact based rigor of his succinct analytical writings and many of the contributing discussion debaters.

 

His transparent informed approach augers so well for balancing opinion and decision making, which to be sure is why his site is so popular.  His approach to deliver it so successfully, in this highly visible and challenging world of blogging, is a lesson for us all on how to communicate to make decisions by using information well.

I also suspect his resource now supports many changes to improve climate based management processes in the world. And it is almost certainly used for related environment decisions in business the political arenas.

In reading some of the congratulatory comments on his post today I noted this light hearted contribution from Aussie John who wrote:

It was April and the Aboriginals in a remote part of Northern Australia asked their new elder if the coming winter was going to be cold or mild. Since he was an elder in a modern community he had never been taught the old secrets.

‘How can you be so sure?’ the elder asked. The weatherman replied, ‘Our satellites have reported that the Aboriginals in the north are collecting firewood like crazy, and that’s always a sure sign.’

When he looked at the sky he couldn’t tell what the winter was going to be like. Nevertheless, to be on the safe side, he told his tribe that the winter was indeed going to be cold and that the members of the tribe should collect firewood to be prepared.

But being a practical leader, after several days he had an idea. He walked out to the telephone booth on the highway, called the Bureau of Meteorology and asked, ‘Is the coming winter in this area going to be cold?’

The meteorologist responded, ‘It looks like this winter is going to be quite cold.’ So the elder went back to his people and told them to collect even more wood in order to be prepared.

A week later he called the Bureau of Meteorology again. ‘Does it still look like it is going to be a very cold winter?’
The meteorologist again replied, ‘Yes, it’s going to be a very cold winter.’ The elder again went back to his community and ordered them to collect every scrap of firewood they could find.

Two weeks later the elder called the Bureau again. ‘Are you absolutely sure that the winter is going to be very cold?’ he asked.’ Absolutely,’ the man replied. ‘It’s looking more and more like it is going to be one of the coldest winters ever.’

Another comment followed Aussie John,  pointing out there is no winter in the north of Australia.

All jokes aside, this re-enforces the points we all  try to make about adding the “Intelligence Process” as the key for making information of value.

Congratulations Anthony.

 

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Google power links bank crisis impact using “User Reaction Litmus”

When reading the article “Google reveals lost confidence in banks” in Director-Of-Finance Online you quickly see the power of using Google search engines information to gauge and understand the pulse of consumer behavior.

If you are a big brother watching adversary you may be concerned, but the fact is Google now knows with some certainty what we are all thinking.  How you may well ask?  Simple, they keep all the history of what we search and have developed tools to analyze it.

Yes every URL search is kept; including who made it, where, and when it came from; what is searched for and the search trail, are all kept. With this information they simple do intelligent search patterns analysis to see behavior changes using their linked analytics tools to see what is on our minds.

The value then is deploying it to organisations for their marker research. That in turn allows Google to sell things like their simple Pay-Per-Click advertising to grow their now massive advertising business, that has made them the rich company they are today.

Linked analytics to provide ability to track events and build consumer profiles is not new, But the velocity and quality of timing is. So much so it is now a phenomenon that is changing the very substance of our lives and commerce. Google now have the power to get instant feedback on all our thinking patterns and changes in them, before we even begin to show up in street and act on our research.

Knowing what people plan to do before they do it, means there is a financial killing being made regardless of financial crisis. Well organized alert marketing thinkers who are equally deft to react to changes in consumer behavior patterns are now moving in on this capably.  This new breed of entrepreneur is using linked analytics as their tool to clean up. Today if you searched “Personal safes” you will find 281,000 entries. From there you can b=narrow it and research your potential purchases while comparing vendors product information for free and without even talking to a vendor until you are ready to trust them. But now with the information so organized and quickly available they can know you are shopping and can plan accordingly. Incidentally talking about the present financial crisis according to the dofonline article “Searches for home safes are also up 150% over October 2007, with searches for safe savings are up 900%.”

So let’s examine some basics. A norm in ordered markets is “safe-branded-habit-form-buying” programs to drive buyer behaviors. Routine, life-style, entertainment, choice, peer pressure, curiosity, boredom, to name a few are all drivers in that paradigm. But when a shift occurs in the fundamentals that cause even the routine to become a paradox, then all these drivers go out the window. What replaces them generally is a market that becomes driven by panic, fear uncertainly and of course opportunity, each with its own for set of behaviors that in turn trigger solution and other reactive types of survival behaviour buying.

For the most part when people are under threat, after the immediate escape to preserve the status-quo, is then to protecting the money as the most critical refuge point to safeguard it at all costs And many unfortunately do just that. Hence the abnormal lift in buying inquires for personal safes is obvious even to blind Freddy, as people not lose confidence in spending their money on assets of no certain value and then lose faith in the institutions that house the money itself .

So using intelligent linked analysis of changes in URL activity is at the heart of understanding how people react and think. Being able to simply analyse URL activity is now a massively powerful market research tool. I guess the URL could be aptly named from its current technical derivative “Unique Resource Locator” to “User Reaction Litmus”

This makes me very excited about the future, as we can learn quickly to rectify issues, even fundamental ones, like world economies, that now have all 6.8 million of us joined at the hip.

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Incident reporting: static analysis is the first step normally used to identify losses. Summary statistics first display frequency and severity data by event type and by business line, according to the regulatory categories. This report is of certainly needed for compliance purposes, however it might be not the best tool for the risk management of a financial institution, which has a different structure or nature of activities.

An example of a more useful set of summary statistics would match the organization chart of the financial institution, bank, or company that uses its database. With a capability in viewing the reports in dimension splits by department, by people in charge, or by geographical zone of activity.

For a bank retail network for instance, the reporting may be split by bank branch, and, or by type of client. Even before detailing the frequency and the severity of each type of loss, incident reporting in an organization or in a department should first display the total loss amount caused by operational events.

Several simple measures, long neglected and sometimes never measured in financial institutions in the past, may provide a powerful tool to raise awareness on operational risk within an organization

Next, the analysis can identify the “low severity, high frequency” losses and the “high severity, low frequency” losses, with the remaining events. Both need further investigation, since they can be the symptoms of serious breaches in control within the organization. One of the key criteria in operational risk management is whether a possible loss is capped or not. That is, in case of an operational event, the potential loss amount is limited by any type of control. Capping potential losses is, and should be, a main concern for senior management. To that extent, rare events of large amounts are the first candidates in the identification of uncapped risks.

Likewise, recurrent minor losses require further investigation, at least once. They might also be the consequence of an effective cap of losses in an activity highly exposed to operational risks. Operational losses due to processing errors are frequent but limited due to effective control procedures and systems design. But recurrent losses could also be a more worrying symptom of a systematic breach in control or in process that lead to systematic or frequent losses, with possibly very large amounts at stake.

An incident database is a view of the operational losses in an organization that can provide, if interpreted correctly, a list of priority controls and investigations to be performed. Database analysis provides the facts, but does not identify the risks.

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It is just another rainy day in Bangkok and looks like continuing for some time, I had just spent the afternoon consulting with a PM vendor pre-sales consultant on how a planning and budget process works.

As we know, basicaly the planning & budget process allows modelling the business to link from “strategic activity”. And then budgeting for resources is done based on the “chart of accounts”

This process also allows planning and reforecasting alternatives to be set up when a strategy fails to perform – i.e Best, Benchmark, Worst Case, or in easy terms “what if” scenario analysis.

Basically, that’s all there is to it, although there are some tricky parts when dealing with multiple units, products, versions and currency etc., which software just handles for us.

Generally the questions we face are both “technical-driven” e.g. where does the data stay or where the query is stored and “business-driven” e.g. what does a planner do and when the planning process fits in the budgeting cycle.

I could have not answered this if I didn’t have hands-on experience on the problem myself, even though in many cases I may not know specifically the detail functions of a particular vendors application well,

But we have been through this exercise end to end, from both the business side and the functional side with various software packages. Each time we do this, it seems software vendors don’t know about business side and business people don’t know about the application. That is certainly a gap that needs to be filled, to marry knowledge of business processes and applications , and facilitate an improvement change in the process.

For this, we need to have ability to look at processes and review the current AS-IS position and highlight issues; Then based on need and benefit, propose a potential TO-BE position and define functional requirement and a scope for change, This naturally addresses work flow, process design and business case for change.

 

Facilitating this requires cross domain coaching to allow all staleholders vendore and customer to envisage the “deliverables” and how to get there from start to hand over. And then to see how to support and exploit the ongoing of change management afterwards.

I firmly beleive that the “Coaching” ingredient is all too not down-played or lacked emphasis so making it a big missing piece in successfully implementing Performance Management processes.

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Today I had a chance to discuss with a client regarding Operational Risk for banking and financial sectors and would like to share the ideas here. 

Operational risk is defined as “the risk of losses resulting from inadequate or failed internal processes, people, and systems or from external events. The definition includes legal risk, but excludes strategic risk and reputation risk.” [1].

1. Incident Reporting – static analysis. It gives a chronology of past events, their nature, their cause and how the case was handled.
2. Dashboards – dynamic analysis. They describe the evolution of operational events by activity or by department, providing a dynamic representation of the losses.
3. Key Risks Indicators (KRI’s) / Key Performance Indicators (KPI’s) – benchmarking analysis. Allows a comparison of the dashboards to predefined standards and an assessment of the evolution of the risk.
4. Risk and Control Self Assessment (RCSA) – proactive analysis. Provides a prospective view of the potential risk based on the collection of information by experts in the field.

In our discussion, we realized that banking and financial sectors in Thailand still deploys only up to static analysis from the various case studies that could be found and read in public forums like http://pantip.com/cafe/sinthorn. The point addressed was now that the Bank of Thailand has announce that commercial bank has to compile with the BIS policy, where should they start, which solution should be considered and weather the solution deployed completely answers the subject given. I’ll write about this in the coming articles.

[1] Bank of International Settlements, (2003): “The New Basel Capital Accord”, Consultative Document, Basel Committee on Banking Supervision.

[2] Bank of International Settlements, (2002) “Sound Practices for the Management and Supervision of Operational Risk”, Basel Committee on Banking Supervision.

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So what exactly is a BI?

Intelligence or information gathering in business terms broadly covers employment of analytical processes for performance advantage.

Succinctly put, Business Intelligence (BI) systems present decision based information by systematically analyzing an organization’s own business data directly from its source.

With mature disciplines of Performance Management (PM) systems, we now see consistent and better organized data available. So greater emphasizes is now on analyzing, hence the now high visibilty of the BI software category.

In a competitive business software industry with a plethora of choices, Business Intelligence systems are even more responsive.

The BI tools now come with sophisticated analytically based graphics and intuitive ineractive end user reporting and reduce massive online data sources to simple and decisive value.

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Many struggle with the concepts of business Intelligence. Even methodogies like Balance scorecad that have been around for yonks now are an issue for many people.

The activity of gathering business intelligence is basically collecting data and reporting it in a sensible way so we can analysis it and used it to make decisions.

 

 

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