Recently, Wayne Eckerson of TDWI published an outstanding piece of research titled: “How CFOs Use Business Intelligence to Turn Finance from Record Keepers to Strategic Advisors”.

Wayne is completely correct in his thoughtful outline of what YOU can do with this advanced way of thinking and acting to use BI effectively and profitably. Read this document, give it to your BI and DW Managers, and then provide it to your CFO. It enables a company to more clearly understand the benefits of integrating financial and related operational information from all sources.

Many CFOs have not deeply investigated the limitations of the accounting, general ledger, and/or reporting systems that they depend upon so heavily. They often focus on these systems’ capabilities with respect to providing regulatory and financial reporting. However, there is a significant ‘new world of finance’ that CFOs can tackle by leveraging BI and data warehousing to integrate data in a way that helps transform finance processes and related analytics. Exploration of these opportunities is usually left to I/T and BI professionals, who often have limited insight into financial data and the individual processes that generate it. As a result, many CFOs are looking to partner more effectively with I/T in an effort to leverage BI-related technologies in a way that provides finance and other decision-makers with information that is more current, more accurate, and more meaningful.

Eckerson summarizes his research into these categories:

Opportunity. The finance department sits at the information nexus of the organization. Finance can be a powerful agent of organizational change. It can leverage the information that it collects to assist executives and line of business managers to optimize processes, achieve goals, avert problems, and make decisions.

Obstacles. Most Finance departments are playing a back office role: they are forced to spend too much time producing internal and statutory financial reports, which leaves little time to analyze data and collaborate with business managers about how to improve the business. In the process of producing all these reports, finance teams create information silos, using spreadsheets and other low-cost tools that interfere with top executives’ ability to obtain a consistent view of enterprise performance.

Partners with IT. Forward-thinking finance departments have learned to partner with the IT department—more specifically, the business intelligence (BI) team—whose job is to manage information and deliver a single version of corporate truth. In so doing, they have liberated themselves from manual data collection and report production processes so they can engage in more value-added activities.

Business Intelligence. To succeed, the BI team must create a data warehousing environment that contains all the data that the finance department needs, with the appropriate rules and calculations already applied. The data must reconcile to the penny with operational reports generated from the general ledger. The BI team must also provide reporting, analysis, dashboard, and planning tools that access the data warehouse as well as other data sources and empower finance users to explore data on their own without IT assistance.

Growth Path. Once the BI team delivers a solid DW and BI infrastructure, the finance department can spend 80% of its time analyzing data instead of collecting it. They can work proactively with the business to forecast the future instead of report on the past. Armed with analytical insights, the finance department can collaborate with business managers to optimize pricing, reduce inventory, streamline procurement, or improve product profitability. They can help business managers evaluate options, such as whether to add more salespeople, change commission fees, partner with a new supplier, or change merchandising assortments, make new customer pricing, and build better multi-channel investments and operations.

There are several great examples recently, in many industries, where the DW/BI has worked closely with the financial team, to enable a vast new set of analytics and decision-making processes. Examples are:

Some Profitable Case Examples:

• A very large telecom company, with ten of millions of customers, needed to separately analyze the business and consumer customer bases. Senior management required a more consolidated, transparent, and faster view of line of business performances. Through a joint effort the team created a new subscriber reporting system capturing daily changes through self-service BI views; created a 30-line subscriber-level P&L through a portal; automated key metrics which were manual; automated average revenue per subscriber data/reports; and now provides a single, integrated platform which feeds enterprise-wide, reliable metric calculations… all for faster and more accurate resource management and decision-making.
  
• A large technology manufacturing company needed to implement a single data warehouse to achieve an easily synchronized, consistent view of company performance at any given point in time. The team determined that there was an excessive amount of manual labor and spreadsheet reliance for reporting and analytics – e.g. pricing decisions slowed by inability to integrate pricing, sales history, compliance metrics and CRM information. By consolidating and integrating financial information, the company can now quickly factor sales history and compliance behavior into product pricing negotiations and has also accelerated processes such as revenue reporting (now completed in minutes). By combining production, sales forecast and financial costing data, they can better identify which yield improvement projects will provide the highest return, generating $100 million in incremental annual gross margin. Through quick synchronization with the ERP system, they can now roll up consolidated financial data within minutes not hours.

The Benefits of BI-Finance Collaborations: A Great Future ….

As Wayne Eckerson notes in his report, the smart, collaborative use of BI and Data Warehousing for Finance can unleash capabilities many CFOs only dream of today:

• Imagine a future in which the CEO calls a meeting of finance, sales, and other unit heads and their analysts and everyone agrees on revenue, profit, and cost numbers. Instead of arguing about whose numbers are right, the team spends the meeting identifying issues of concern, discussing options, and agreeing on corrective actions. Decisions are made based on facts, not gut feel, tradition, or arm twisting.
  
• Imagine a CFO who checks the company’s overall profit and loss position daily and, with a click of the mouse, views the contributions of every region, group, and product line, and then drills down to view individual orders and expenditures at a product, customer, or supplier level. Armed with this information, the CFO alerts business unit managers to process and performance anomalies and suggests actions to remedy the issues.
  
• Imagine a vice president of finance who can assess at a glance the company’s progress toward strategic goals at all levels of the organization and drill down to view the performance of any group, region, or area without IT’s assistance. To ensure various departments meet their goals, the VP requests that managers and staff in the field update plans and forecasts, which are automatically collected and consolidated within hours. The VP then works closely with department heads to tweak their investment strategies, hiring practices, resource allocations, process improvements, and other plans.
  
• Imagine a controller who can automate the consolidation and standardization of financial transactions across a company in a few seconds and generate period-ending statutory reports in a few hours or days. The controller could reassign analysts who spend most of their time collecting, adjusting, and reconciling data to more value-added activities and confidently assure top executives that all financial reports are accurate and comply with pertinent regulations.
  
• Imagine a financial analyst who can go one place to find all the information she needs to conduct an ad hoc analysis for an executive or who can generate a standard report without having to perform countless conversions using custom business rules and macros in unaudited and error-prone spreadsheets. The analyst could spend an extra two to three days a week helping business managers evaluate ways to optimize their operations instead of performing low-level data management tasks and proliferating spreadmarts that undermine information consistency.

Lastly, the convergence of data into meaningful information, the alignment of financial data with the power of DW and BI and the people who can enable better and faster knowledge discovery, is more than a dream in many organizations today. The imagination of the CFO will become the innovation of the corporation. And everybody wins. Let me know how you are thinking and performing this now!

Ron Swift

The recent explosion of the numbers of users on social networks and using social media has proven to the business community that “word-of-mouth” is much stronger than simple brand or product advertising. This has, surprisingly, been true also in the area of product introductions (of high-tech such as the iPhone or specialized media such as TV/Sports). We are approaching the level of direct communications that is similar to the rise of automobiles in the post-World-War II period of industrialization and distribution in the 1950s-1970s.

Interactive applications, social-media, and even company-owned websites will endure more easily than their real-estate-prone predecessors. Banking, insurance, retailing, airlines, auctions, books, media, music, television, sports, and even job hunting have all been transferring quickly to utilize the internet as a major source of new business or a major channel for getting to customers (or networks of customers) through deep and advanced analytics (BI). Connection IS power!

Recently, a blog article by Mark Smith, the CEO of Ventana Research, focused on their view of the massive and permanent changes to our personal and BUSINESS USE OF SOCIAL MEDIA. He is at: (www.twitter.com/marksmithvr ) Mark stated that “Social media collaboration, like any activity related to marketing or interactions in general, is best assessed through measurement. Figuring out how to measure social media interactions and effectiveness has been no easy task for technology providers as measurement is easy only in comparison to the challenge of truly understanding its effective value. It’s not dissimilar from the challenge marketing organizations face in striking the right balance of quality and quantity in the business opportunities (“leads”) they generate…”

Teradata has been working with several advanced analytical and data gathering software firms to bring together and integrate customer and prospect data to ensure a better understanding of actions and reactions. These analytical systems, formally known as Enterprise Data Warehouses (EDW), have now become Active DW’s. What does this mean? They are collecting data, not in batch, but, in minute-by-minute streams and integrating it directly with other customer data.

Why do firms collect, integrate, and analyze data in such fast processes? Well, it seems clear, from many company’s recent successes that providing relevant offers, on a timely basis (sometimes with seconds of the initial data collection and analysis), at the point of contact, with the right product, at the right price, through the right channel….is NO longer a dream.

This is the reality of advanced analytics and integrated data warehousing that is now Active in collection, loading, analyzing, and using near-real-time (NRT) information. Most firms needing such technologies have been latent in gaining their management’s understanding and acceptance of this shift in requirements. Many firms are still using BI and DW as a way of reporting on the past periods. They have not realized that reporting provides only data for viewing (and maybe learning); but active data and new visualizations are providing for operationalizing BI/DW and therefore managing the present and the future.

Yes, you can use analytics to actually predict the future, if you maintain hoards of past historical behaviors, transactions, buying patterns, trends, web page looks, click-throughs, and also textual data that your customer can give you regularly to tell you about them or their needs.

This brings us to think how the future use of Personal Digital Assistant (PDAs), now sold also as iPhones and Nokia special phones, will allow business to drive customers through offers and opportunities. Banks and airlines can benefit from major cost reductions, increased customer take-rates on marketing/sales offers, and avoiding competitive forces stealing their customers.

This will also be true in the mobile telephone business, if those companies realize that one-to-one marketing is essential and that the content may be more important (for revenues) than the communication network connections (meaning the towers and the call fee collections). The world has changed in media and entertainment to provide cable, satellite, and now, PDA watching of major sports and all forms of entertainment. The mobile industry is hastily running hard to figure out what to do. Call prices are going down in many countries, the cost of the network remains the same or is going up (needing new bandwidth for internet connections and streaming of video), and the need for personalized, individualized, selective, and specially prepared offers will make a huge difference in their success or failure --- as a company and as an investment.

Imagine if our automobile manufacturers actual spoke directly with their prospects and truly understood what they desired in an automobile and gave direct input to the design, manufacturing, and pricing. Then an interactive discussion on the merits of the automobile (from a trustworthy knowledge source) to educate the customer. And then to assist them with making the right decision, but not based on pressure-tactics, or sales prices, or even rebates. We all would be much happier.

Using analytics to inform your management about the number of tweets on your site, or even the numbers of people following your “tweets”, becomes almost irrelevant in a changing landscape and world of ideas that is forever dynamic. Active DW, with changeable models and analytics (that learn from themselves) will be the foundation of future predictive analytical visualizations, while also providing for instant recognition of opportunity and the offers to be made. This will take place in the utilities industry (with electronic wireless data collection from meter boxes), in the airline industry (seeing weather changes and people needing to change itineraries), and in other industries where dynamic environments drive people behavior changes.

This will also come true in elections, in countries that have large masses of people on social media networks, and use the systems to communicate news or changes in opinions about candidates or incumbents. Watch the 2010 USA Congressional Elections and see how many incumbents will use ‘social media’ to get to their voters. It will be astounding. This follows the great success of Barrack Obama and The Acorn Group plus the Democrats to truly exploit the social media method as a way of influencing voters. It was a great success. It is only the beginning. And there is little way to stop this movement or evolution. It is like the telephone of one hundred years ago. Eventually everyone will have one, first wired (it took about 80 years) and then wireless (most saturation points were achieved in most countries within 10 to 20 years).

So what can we all do to make this evolution a positive, useful, and a successful business opportunity? The first movement would be to collect immediate web data and integrate it with previous customer data. Second, to analyze this data and use it to sell products, manage services, deliver products faster, get to the market easier, make your marketing costs go down, and increase your revenues. We should jump on any and all examples and see if they fit our opportunity.

Many first initiators of a new technology become the winners. Sometimes the second round improves upon the first round, and you now have that opportunity. Don’t waste your time going through analysis paralysis on whether you need to do this. It will stall your calendar and you will waste more time and money instead of increasing your revenues. Each month or quarter lost, is lost money. Lost profits. Lost customers. And also loss of the future use of the internet/social channel by your firm with those customers. They will go elsewhere and never return!

Mark Smith has suggested (and I agree since these firms are Teradata Alliance Partners) to review recent white papers which help you gain knowledge. See: “Informatica Demonstrates the Value of Data for Every Organization”, and See: “SAP Broadcasts New Enterprise Software and Applications Strategy“, and SAS Institute “SAS Simplifies the Science and Use of Analytics in 2010“ . And as the foundation for advanced analytics and using these above techniques, learn more at “www.Teradata.com and search on “Integrated Web Intelligence (IWI)”

There are three things that you can do.

1. Do nothing and your competitors will surpass you. “Beware of the Ides of March”.
2. Use external resources to augment your present staff to advance your abilities to use the Social Media and even your firm’s website to better understand and communicate with your customers.
3. Be a leader and engage proven vendors or consultants to ensure that you will not be reinventing the past. Let me know what you are doing or not doing.

Personal Note: My father would have been 106 years old today and he would not have believed what we are communicating about in this blog or even how we are doing it! Time is moving quickly!

I’m all ears on this one. Good luck,

Regards, Ron Swift, VP of Cross-Industry Business Solutions for Teradata Corporation

It’s about 65 years since World War II ended and that means major transitions - for many reasons.  First, there are a massive number of ‘baby boomers’ who are becoming of age to receive health benefits (mostly through US’s Medicare), and secondly, there will be multiple European Countries that will default on loans, economic debt, and promises to their combined EU leadership.  (You heard it here, right?)  Third, the leadership of most of the leading industrial countries have been forgetting their functional job responsibilities or purposes and have embroiled themselves in politics (as usual) which is undermining the economies of the great 20th century nations.  This century will become, or is becoming, accelerated in actions, based on Business Intelligence, Analytics, and the ability to track customers/prospects like never before.  So the old ways are quickly passing.

Maybe these events will not affect the opportunity of all of us to reconsider what we could achieve by “knowing our customers” so much better and driving profitable actions.  The world of the internet is taking over the world of “direct selling” and also of “knowing preferences of customers.” Or has it?

Social media, sometimes confused with social networking, has catapulted upon the scene and is driving many businesses to re-evaluate their web-investments and the requirement to integrated web-based information with normal customer/product information in their DW. Social Networking appears to be an excellent way for telecoms, banks and others to ‘see’ their customer’s connections or interactions.

Sherry Heyl informed us about Alan Radding’s interesting and informative recent articles on this subject.  Alan has posted a series of articles about the internet itself, one special one on 03/03/2010 which covers social media and social networking. These insightful blogs have informed us that “there even is a social media portal for CFOs, called “CFOzone”, where financial professionals can engage in forums and discussions and participate in various types of professional social networking. But that is focused on the CFO’s professional development. Social media/networking also can do good things for the business itself. “

Alan’s point is to assist us, as I have been trying to do for sometime now, to better define what can and cannot be accomplished in this arena. He goes on to say: “To start, let’s not confuse social media and social networking — both terms are used interchangeably — with e-commerce. With e-commerce, you put up a Web site for the purpose of conducting business, making sales, and generating revenue.

“Social media is not overtly transaction-oriented. Rather, it revolves around content-driven marketing. For example, one large consumer packaged food company, put up a social media Web site. It does all the expected customer service things through the site, includes discussion forums for use by its customers, offers recipes and enables customers to share recipes, and provides ask-the-experts forums on related topics — all content-driven.”

“Social media generally avoid explicit commercial transactions. Instead, you create content with social media to build the business and the brand, everything from recruiting talent to rallying the faithful to countering bad news. (e.g. Toyota leveraging social media to rebuild its brand?)

Alan’s thoughts give us “6 content-driven things that any business can and should do with social media:

1. Establish presence. With hundreds of millions of active participants, you want continuous visibility among the people who are important to your business, be they customers, prospects. partners, or other stakeholders. (RSS Hint: don’t use this channel to provide nonsensical offers and things customers dislike. Learn from them, use it wisely.)
2. Build rapport and relationships with specific audiences. Cultivate relationships with your important stakeholder groups through two-way communication. (RSS Hint: Better understand the leaders, followers, and the potential buyers of the future.)
3. Establish your business as a leader and authority by providing helpful and insightful content that can’t easily be found elsewhere, information people want. (RSS Hint: Stop sending out silly or incorrect marketing/sales messages to your customers. You are killing your brand and the millions you have invested in the brand.)
4. Engage prospective customers and partners interactively. Invite feedback and input, and be responsive, attentive, empathetic, and supportive. (RSS Hint: Integrate this data and you will enable analytical possibilities that were never before acted upon.)
5. Listen and learn from your customers, supporters, and all your various stakeholders. Encourage constructive criticism, conduct surveys, solicit suggestions. (RSS Hint: Store these within customer records in your BI system.)
6. Build brand and company loyalty. Social media is an ideal vehicle to grow whatever loyalty initiatives your organization engages in.” (RSS Hint: Use ETL and web tools to discover and collect data which would help you satisfy customer needs.)

You might also try going to another location to review some great information at these 20 social networking sites for business professionals.”

Now, what does all of this have to do with Data Warehousing or BI? Well, smart companies have been gathering data from the internet, analyzing it carefully, sometimes integrating it with their own customer or prospect data, and making the right offer, at the right time (e.g. timing can be everything in business), through the right (customer desired) channel, at the right price (in a commoditized world), and with ‘personalization’ based on past experiences with the company.

Three suggestions from our customer experiences at Teradata Corporation:

1. Gather the detailed data from the internet, don’t just review the statistics/volumes/hits, and use the information to learn more about your customers and what they need.
2. Drive future offers based on customer needs, not just your product manager’s desire to get his products sold to anybody. This will enhance your credibility with your customers and also regain long-term loyalties. (Oh, loyalty also comes in the form of ‘free’ referrals to other customers, which brings high return for your analytical, marketing, sales, and pipeline investments.)
3. Measure and analyze the positive and negative transactions or lost opportunities. Learn from them and learn from what your customers are saying or doing on the internet through social media or social networking activities.

Using advanced techniques not just advanced tools, to Integrate web Intelligence into your marketing and sales, driven by facts not statistical figures or just hopes, will provide an assuredly greater contribution to your business. Many of our customers have seen this avenue as a way to truly ignite many opportunities, even during an economic downturn, a commoditized environment (or lower prices), wisely using a delivery of excellent, personalized, relevant, timely, and needs-based propositions and services through their data warehouses.

Have you accomplished something new such as this? Let us know. We appreciate your comments and feedback. Thanks for the tips Sheryl and Alan. 

Ron Swift

Recently I was reviewing an interesting article by Ross Mayfield who is an advisor to www.Slideshar.com and co-founder of Socialtext. He is also at @ross on Twitter. My compliments to him and his team. He has this to say:

As Chief Marketing Officers develop their social media marketing strategy for 2010, they are demanding business results. In 2009, 89% of CMOs tracked social media’s impact by using standard metrics such as site traffic, pageviews, and number of fans (as discussed in a recent survey).  However, CMOs expect that in 2010 top metrics will track more closely to P&L business goals––not just Web-related goals. The study forecasts the growth of adoption of the top three metrics in 2010, as follows:

• A 333% increase in tracking revenue
• A 174% increase in tracking conversion
• A 150% increase in tracking average order value

Such a shift in measurement expectation is significant. CMOs indicate a 300% year-over-year increase in 2010 in the number of companies that plan to measure social media’s impact on conversion and a 400% increase in the number of companies that will track social media’s direct impact on revenues.

The 2009 financial crisis probably did social media some good. Not that you need a ton of budget, but competing for scarce budget alongside more traditional projects is a creative constraint. As social media marketing matures, it will become a facet of marketing overall and it will be harder to spot a campaign that isn’t social. Part of that maturing is - you can’t manage what you can’t measure. Part of it driving activity that drives traditional metrics, like how you can drive conversions with LeadShare.

Social media marketers should get ahead of this curve. If you know you will eventually be accountable for traditional metrics, start iterating as soon as you can to find models that work. And volunteer to report these metrics before they are volunteered to you. This will require that you actively engage other parts of the marketing organization and give them stakeholdership in your outcomes. Take a look at your 2010 campaigns, reconsider your metrics, and incrementally realign your activities with the core of the marketing function.

My thoughts:

1. Social Media is bringing marketing and service people new opportunities of understanding their customers and also tracking/trapping events and customer needs. This is in addition to formerly understanding customers and their behaviors through the use of advanced data warehousing and Business Intelligence investments aimed at processes and techniques that (demand and) drive smart marketers actions. Teradata has been providing such solutions for over 20 years. But now the new era of faster communications, WEB 2.0 applications, and customer-driven interactions has catapulted many countries and companies into a totally new era.
   
2. Original Web Analytics are normally collected from logs or applications on  websites which focus on their sales activities and orders (and even revenues). But most companies have invested millions or ten of millions of dollars (or your local currency equivalent) and rarely are tracking and trapping the customers entering point, movements on your website, pages read (and how long), products reviewed and subsequent searches/views which define what customers seeks and would desire. If you had a sales-person on their shoulder watching them go through your website, wouldn’t he first be asking questions and second finding ways to fulfill the customer (purchasing or service) needs?
   
3. Investing in web analytics has now moved beyond the most obvious metrics (usually self-aimed at the business, not about the customers). The new age of tracking and understanding customers has enabled the opportunity of compiling data into a Teradata Data Warehouse and then using sophisticated analytical techniques and models to do what is necessary to take immediate actions and complete the sales or service cycle. In addition, Teradata has partnered with numerous companies, serving many industries, which extrapolate and move the web activity data to the Teradata Data Warehouse, then other companies provide applications and analytics that give INSIGHT to managers and executives who need information to manage their resources. This new area is known as “Interactive Web Intelligence” or “Integrated Web Intelligence” (IWI). This means integrating web data with your detailed customer data from all of your other channels. This is now (sort of) mandatory; if you plan to be successful in the electronic (PDA) world.
   
4. There are some excellent Teradata software alliance partners that provide modern-enabling tools for such gathering and analysis. They are WebTrends and SpeedTrap, along with others who provide additional infrastructure support and loading of data into the Teradata DW’s. 

SUMMARY AND RECOMMENDATION
Reporting at the end of the month, or even the end of the week, is no longer sensible or even useful. Latent “Post-Action” tracking and reporting, with delays in analyzing and then acting, provide little economic value.  In today’s world, using the enabling technologies and smart people to go with them, you should be seeking an ACTIVE Data Warehouse with ACTIVE Enterprise Intelligence. Your competitors are in the integration mode and now gathering web data, and then moving quickly to learn and use such data to manage customer retention, customer sales, customer services and customer satisfaction. Are you?

My best recommendation is to consider how much you plan, or have, invested in your customer marketing and/or web site. Then evaluate what it would mean if you took just ten percent (10%) and reallocated it to Integrated Web Intelligence (IWI). No one, including your customers and competitors, will find your reallocation to be less than magnificent in terms of ROI. BI and DW along with IWI are part of the new world of Web 2.0 and subsequently understanding your customers and prospects. Address them with your best RELEVANT messaging and you will win in the world of intelligence and revenues. What do you need to know? Let me know…

6RYC95K93M22

Ron Swift

www.teradata.com/ronswift

As we begin this new year, it becomes paramount that we discuss a few of the key issues on business management‘s priority list. This is important because, from year-to-year, and quarter-to-quarter, management is continually seeking the answer to difficult questions about increased efficiency and effectiveness, lower costs, increased revenues and profits, or just understanding your ‘contribution to the business’. Maybe this last item encompasses the previous questions and also provides you a special opportunity to convert your work and ideas into real actionable intelligence that drives the business (not just reports on the happenings of the past periods). This is the new key success factor or KPI (as some of management seem-to/want-to monitor).

Business Intelligence, Customer Experience Management and CRM, plus managing inventories and capital resources are clearly on the top of management’s priority list. How do you contribute to these areas and what uses of Data Warehousing (DW) and Business Intelligence (BI) bring major benefits to your organization? This is not to address limited uses in selected departments, but the promulgation and successful usage of the productive results of these information system management resources.

This brings to mind numerous examples of success, in many industries, that have been achieved by our customers utilizing Teradata’s vast selection of solutions to acquire, consolidate, integrate, access, visualize, and utilize data (or better yet information or knowledge) into the decision-processes of many firms.

WHERE CAN I DISCUSS MUCH MORE ABOUT THIS APPROACH?
AT&T, Bank of America, Banque Populaire, Carrefour, Cisco, DHL Express, eBay, Lufthansa, Nokia, SFR, SwissCom, Telefonica will all discuss their journey to success in using the Teradata DW Solutions at a management conference in Berlin on April 11-14, 2010. These and many other Teradata customers will discuss their processes, the results, and the changes achieved in their businesses. This conference known as “The Enterprise Intelligence Summit” can be understood better by clicking through to www.TeradataEMEA.com.

What might you do, even if you cannot attend such a conference of successful winners?
Well, it might include reviewing what your team accomplishes in understanding customer attrition, churn management, offer preparation and delivery, event-based marketing, metrics regarding essential activities (or common dissatisfaction areas of customers), and constant intelligence gathering and distribution to people who can act upon the recently gained insight to drive actions which involve your customers (and their retention, satisfaction, experiences, or needs analysis).

SOME ADDITIONAL SUCCESSFUL APPROACHES
Secondly, it might be more important to look at the high expenditures for marketing, sales, support, distribution, inventories, capital asset usage, and the like, to ensure that BI Analytics are not just reporting on their past metrics; but now driving with ACTIVE Enterprise Intelligence (meaning cross-organizational knowledge) to achieve quick payback and better decision making.

Third, think of all of the decisions that are being made in your company during the time that you are reading this article. It could be hundreds or thousands that are affecting your customers, channels, competitors, or even partners. What percentage of these thousands of decisions, that affect these revenue-producing resources, actually are the SAME questions and decisions that were made last year, last month, or even last week? Think about loans, credit, payments, resource usage, personnel management and allocations, food or resource distributions, acquiring perishables, or even shipping items to your stores, planes, branches, customers, or partners. If 80% of these decisions could be made online (NRT), using integrated detail data within a cross-organizational view of your customers or channels, then you have an opportunity to reduce waste and redundancy and make a major contribution to the productivity and effectiveness of your business. This is called providing a ‘rules based’ BI system online to the customers or to the decision-makers, which substitutes or enhances the process and reduces major costs.

For the remaining portion of the decisions that could not be made by the DW or BI processes, then a human would have to do more research, make contacts or acquire additional knowledge, and then proceed with the ‘out-of-the-ordinary’ decisions.

SUMMARY and RECOMMENDATION
So, what are you doing that is creative and contributing to your company? We’d like to hear more about it and tell your story and make you more ‘famous’ or just give you a pat on the back. Isn’t it worth it for your upper management to know that you are contributing in ways that they probably have desired for years, but maybe haven’t been able to witness or make happen without a strong and vibrant BI/DW solution? Let’s accelerate them from Theory to Reality to Profitability based on your BI/DW efforts.

Looking forward to hearing from you soon.

Ron Swift
www.teradata.com/RONSWIFT

Recently there have been a deluge of articles and speeches about how to leverage BI and your information assets to maintain/increase revenues and also growth the company now or in the neat future. As the economic downturn has led us all to be much more conservative, there seems to be a quadrant of leadership organizations that are investing in consolidations and re-architecting of their analytical environments. This group of companies, many of which I have visited with, heard on webinars, or witnessed through various other communications channels are defining methods of cost savings while also increasing opportunity.

There seems to be three major themes that are emerging in this effort to reduce cost and increase revenue opportunities: 

1) Focus on the elimination of redundancy of data files, work actions, processes, approvals, and also direct cost expenditures that provide no value to the company. Throughout the years many firms have been building separated data bases, data warehouses, and analytical files which cost large sums of financial resources (in comparison to the value achieved) from redundant or replicated infrastructure or work actions. Examine your uses (or non-uses) of data and databases. You will find gigantic opportunities to utilize known valuable data and also to merge them into an integrated data warehouse that fortunately is much more manageable and much lower cost than in distributed environments.

2) Seek ways to interact and engage customers beyond the normal actions or channels and coordinate these efforts. Synchronization of current and useable information, discovery of unknown facts and issues, and alignment with customer management processes will provide a surge in revenues and resells which will ignite the profitability opportunities. There is no revenue without customer(s) and no profit without creating a wedge between expenses and revenues.

Profitable companies know that analytics provide much more than simplified or even complex graphical reporting. Reporting is looking backwards and not utilizing data to provide management with decision-making capabilities. Find ways to ignite management's thinking by including risk and returns in the reporting or analytic forecasting. This method of using Business Intelligence (BI) provide alternatives for making the right decisions and then re-evaluating the actions taken (and deciding to set new or updated rules-based equations into your BI or decision processes).

3) Achieve higher levels of management support for making smart decisions inside your company and new methods of utilizing customer or supply data to drive down costs and drive up revenues. Plan to automate customer marketing in a high percentage of offers and known repetitive processes. Discontinue management reports that are not reviewed or not even requested anymore. Maybe a quarter review of the most expensive and the least used reports and models should be accomplished with the business users. Using BI should be a Critical Success Factor in all processes. Align the reporting, forecasting and operational BI communications into the decision actions of management. Gain support of CXO's by directly aiming your deliverables towards THEIR KPI's or Metrics. Understand THEIR goals and success criteria and utilize analytics and the Data Warehouse to drive information to support them.

There are hundreds of ways to provide information to people to make decisions, take actions, evaluate results, redefine objectives or goals, and to improve their business processes. Plotting out a short and longer term roadmap or deliverables plan for inclusion of advanced BI techniques, dashboards with actionable data, and alternatives to make decisions upon…will drive success for you and the entire company. This is an optimum time and a real opportunity for your firm to 'raise it's intelligence'. Don't wait for some economic resurgence to overwhelm you with requests. Perform the right actions now, not when a deluge of people will need your support and you will struggle to provide it. Being ahead of the game is half the battle. The other half is using your already satisfied customers to communicate your value to the organization.

As many executives are turning to their staffs to provide insight on how to reduce budgets for the coming year(s) or for recommendations on how to maintain or increase revenues: there is a mandate for making better decisions through better information. Really knkowing your business and also being able analyze various scenarios is very important in this business era.  

Most companies are still struggling to bring together their decision-making data to ensure stability in the short-term and position their firms for the longer-term.

Recently there was a brief, but excellent, article by Michael Schmidt titled 3 Secrets of Successful Companies

So what might be the immediate actions and success criteria for corporate executives? There are numerous answers to this challenging question.  

First, and foremost, is strategy and leadership. These can be assisted by the inclusion of external information resources, industry studies, consultant’s surveys, with deep internal analysis of customer and services data. This provides a basis for effective planning and setting actions in place for the entire organization. Leaders know use this data to change KPI's and also analyze opportunities.  

Second is financial, asset, and risk management. In today’s world of dynamic change it becomes more important (“than ever”) to understand and analyze the financial markets, changing interest rates, requirements for capital investment to achieve goals, and management obligations for accurate reporting to governmental, industry, or stakeholders.  Most companies who lead their industries utilize financial systems that allow for closing of their books within days of the end of a period; and in some cases, the ability to close the books nightly to ‘know’ exactly where they stand (internally).  But you may say that financial services companies have been doing this for years. Possibly.  But recent public disclosures illuminate that many FS organizations that did not have a centralized, comprehensive, INTEGRATED, and accessible (BI) analysis. In fact, many banks have used centralized data warehouses for analysis of customers and did not also use them for RISK Management and asset assessments. These were accomplished by models driven by transactions and also may have NOT included external data to compare and contrast internal data within the same DW/database. In fact, the predictive aspects were possibly inaccurate for the assets they were holding or selling. More on this later.

Third, is marketplace analysis to keep the company in a position of ‘knowing’ about external businesses (e.g. competition).  These analyses were left to the market research staff or an outside firm and is accomplished on an ‘as needed basis’. Unfortunately, this should be accomplished in an ongoing manner and achieved during the processes where a firm is analyzing its own customers and sometimes re-segmenting them for marketing or sales purposes. Leading firms have mixed their analysis work on complex data warehouses that provide them more confidence in their knowledge and decisions about their business. 

Fourth, is the ability to drive and support ‘above-average’ management decisions and actions and finally, analysis of the processes, decisions, reporting, and even the KPI’s.  Leading companies who are utilizing integrated data (in their ENTERPRISE-WIDE Data Warehouses) find their ability to learn, change, and evaluate brings them stronger management capabilities. Learn from the leaders…

Randy Mott, formerly the CIO at both Wal-Mart Stores and Dell made a speech some years ago where he focused on the management problem of not using available data. He basically stated: “When a company aggregates or summarizes their decision-making data, and does not make it available (in detail) for use in analysis and decisions, the company makes decisions based on aggregates or averages.  These types of using  DW/BI are not leveraging the data or information. Average decisions; create average companies, which in turn do not create competitive advantage.”
 
Mott’s statement has been proven out in many firms that have not established a strong position. This advice is excellent for all executives to think about.
Leaders use their DW/BI systems with detailed data for long periods of time and across multiple disciplines (i.e. departments or organizations).

Long-term successful firms are leading because they learn, act, decide, and evaluate differently. Additionally, these firms make information available to people who make decisions that affect your customers, suppliers, and stakeholders.

Fifth, but not last, is to focus on the information to knowledge problem in a firm. Many systems handle transactions, some provide statistical or predictive analytics and some provide fast reporting. But few are truly integrated and utilize the cross-business data that is a foundation for success. Executives who allocate resources need to understand the value of this integration, accessibility, scalability, and decrease response time to get to and view critical information which drives the business processes and customer profits.

Smarter executives are acting now. What are the actions they focus on now?

1. Define and execute a strategy to integrate as much transactional, financial, resource, asset, channel, interaction, sales, marketing, performance, and KPI information. Some leaders call this database or data mart consolidation. This can fund much of what follows in information and decision excellence.

2. Focus on the processes that could be improved within your business. Invest in multiple projects of “Business Improvement Opportunities” (BIO). Seek consultation on industry-leading best practices and successes in BIO’s.

3. Develop a new awareness of ‘management reporting’ and evolve into action or analytical decisions at all levels of the company. Make accessible the data necessary to truly support decisions. Not just estimates or summaries.

4. Educate and motivate management and non-management staff to utilize data to make better decisions. Eliminate the human need for replicating decisions that are either common, repetitive, or very basic. Allow systems and BI analysis to help determine the decision and provide it to staff or the customer.

5. Eliminate wasteful processes, channel actions, and reporting infra-structures that do not provide any added value to the actual job performance. Many firms produce hundreds or thousands of reports (daily/weekly) that are NOT utilized and rarely help make a critical decision or even a basic decision. Ask all managers ‘what actions to they take, as a result of receiving this report, and how it adds VALUE to the business?’ Transform to online and intranet reporting, analysis, prediction, and operationalizing analytical activities. This, in itself, will save hundreds of thousands or millions of dollars each month/year.

6. Take this opportunity, to realign business and the processes, to position your firm for the next growth stage. Become efficient, effective, but also innovative. Use the above actions to create a closer and more responsible team. Share data, share customers, share products, share channels, share results. Share positive change to create the competitive advantages.

7. Communicate your successes, share your experiences, learn and teach those that follow you --- not just what and why it is achieved --- but how to foster positive changes (that will be required far beyond this year).

Throughout the many workshops and executive forums that I facilitate each year, there is an opportunity to interact with many levels of management, in many industries, in many cultures, in many countries. The problems are mostly the same throughout the world. And, there seems to be one critical success factor (CSF) that all executives and their smart managers know. The single most important CSF is: “Contribution to the Business”. What actions are you taking now that will make a big difference in six months or six years ?