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 ?  

The very long horrendous political campaign is over in America. The people have spoken and the candidates have spent more money than ever convincing the voters about their ‘policies’ and promises.

The PR people, the marketing people, the advertising people, the strategy teams, the local ‘get out the vote’ groups and other organizations have all created various forms of success. But what really is this success? We are expecting massive success through the inauguration of one person as the leader of the ‘democratic-free-voting world’ or the leader of the ‘largest economy’; this may be an unrealistic goal.

One person cannot make this transition a success. Success will take a combination of effective leaders, advisors, and decision-makers who will carry out the policies, decisions, actions, and (process, law, or rule) changes.

All of the above is ALSO true for changes in business during economic downturns. The leaders change, the operating committees re-adjust their priorities and expenditure plans, and the masses of associates or employees are asked to ‘hunker down’ and save expenses.

And, we all know, ‘you cannot save your way to greatness!’ So why try it now ?

Smart executives are seeking ways of enhancing their abilities to make decisions at lower risk, higher accuracy, and more influential to their customers and partners. These leaders invest in business intelligence, a renewed infrastructure to catapult their knowledge capabilities, and foster changes at the front-lines by empowering their customer contact personnel. One might question whether this actually has proven to be a success. Well, yes, without doubt, especially with top executive support and direct involvement in the projects and changes. This was even true at NCR and Teradata over these same years.

Mercer Management performed a study, in the early 2000’s, which focused on companies that invested in better decision-making investments, changes to the value chain, and enhancements to the types and amounts of detailed data to enable better process management. The results were astounding. The leadership companies of the periods preceding the study, which were post-recessionary, showed that companies investing in DW and BI and associated tools and enabling systems…. Led the turnaround periods.

Lets take, as a classic example, companies being able to change their industry or define new methods of gaining competitive advantage. In many of the graduate business schools where I have presented, these past ten years, there is the classic example of Wal-Mart Stores (WMT). Many sociologists, economists, technocrats, consultants, and management gurus have presented various cases of success including WMT. How did WMT establish a lead over some many previously successful competitors? First, it was by providing information to enable decisions as hundreds of points in the business. Everything from sales analysis, market-basket analysis, category and shelf management, faster replenishment, changing the buying cycles to much much shorter periods, working with and enabling suppliers to view their own inventories and striving towards Just-In-Time shipments of replenishments, and evaluating everything from store placement, store layouts, product movements by day-of-the-week to seasonality and demographics of the shoppers themselves. These are known as leadership actions of retailers. But how many of our businesses (today) are sharing their detailed data for active NRT decision-making?

WMT does not ‘know’ each shopper and their habits. But Sam’s Club does know each shoppers purchases, market-baskets, and also new LifeStage changes inside households.

At Union Pacific Railroad, headquartered in Omaha, they have focused on customer service and capital asset management. Not just for saving money, but for driving better customer loyalty and ‘knowing’ their customers and their requirements so much better.

UPR was a leader in tracking their expensive engines and each railroad car. Yard managers have detailed information on shipments, loading factors, fuel usage, capacity of trains, and timely arrivals of products to thousands of (customer requested) locations.

This is a highly complex set of decisions, made every minute, which operates 24x7x365 to drive higher return on assets, higher revenues, is sometimes beating their trucking competition, and also leading in changing the way railroads gain profitability. BNSF and Norfolk Southern have also instituted many changes to create higher ROI and more use of the detailed data in what some people thought was a dying or boring industry.

At Royal Bank of Canada, they invested in extensive data warehousing and Business Intelligence to drive better performance of their banker (customer contact and sales people), enhanced the capabilities of the call centres, and defined a new methodology for calculating the profitability of each and every customer. This allowed them to resegment their customers, with 75% of them changing two deciles or more, and astonished bank management. This banking group has succeeded in implementing a truly successful CRM philosophy, practice, processes, and systems to drive greater customer satisfaction, retention, and cross selling multiple services (which makes customers stick to the bank more).

Many of these successes were similarly achieved by Wells Fargo Bank and also Bank of America. All of these banks have also gone through mergers and acquisitions; made much easier by their enterprise data warehouses.

In Houston, at the headquarters of Continental Airlines, the data warehousing team has assisted that airline in going ‘from worst to first’ in the hearts of their cherished frequent travelers. The extensive applications, data types, cross organizational data; fast loading of transactions and changes, and many other business information resources has changed the whole way that CAL does its hourly, daily, weekly, and monthly business. Customer contact people have access directly to the historical data of the customer they are handling and also continuous models are running to advise remote managers of actions to be taken in their respective stations and flights. Other airlines have begun to follow. Even marketing has taken a place in using all of the data to truly communicate with relevancy, timeliness, and meaningful interactions.

Each of the above examples was implemented during a downturn in the economy or in their industries. Each succeeded in catapulting their firms to leadership by also extending revenues and new decision-capabilities to ensure future leadership.

Let’s think about time and real impacts. If “time is money”, then more effective decisions equals enhanced profitability. As you read this article let’s think about the number of decisions that affect your customers, your marketing, your services, and how many of them are the same exact decisions that have been made thousands of times in the past and now require little or no human intervention to make the same decisions. If these little decisions, not strategic decisions, but little decisions, affect our customers and can be achieved in a very positive manner --- why is the management still requiring the human to make the decision ? Answer usually is: we are not confident in our systems or our models and believe that there are exceptions to the rule. So be it, if there are exceptions to the rules (or rule-based decision-making from historical and present data) then let’s have the human make a decision. Otherwise, let’s store the processes, the rules, the potential decisions, and the actions --- all within the active data warehouse. Then the humans can more closely use their knowledge and experience to handle more challenging decisions.

(If we had coded and modeled the basic rules of risk, asset protection, insurance, leveraging, and basic accounting and economics in the banking and insurance systems; maybe we could have avoided the overleveraging and value-less package selling that were being traded that caused our latest financial crisis. It is basic accounting, GAAAP, and rules. Sound familiar? I know it is not THAT simple, but it could be someday.)

As the service economy increases, and the manufacturing and construction industries struggle out of this recession, it is becoming more and more evident that executives and technologists should focus on the ability of their people and processes to utilize DW and BI as a means of not only savings expenditures --- but also positioning for growth in the future. Catapulting your business through intelligence is a hallmark in many industries.

As I meet with dozens and dozens of Teradata’s customers each year, it is astounding how many have quietly created gigantic successes and wait (for years) to talk about it publicly. I guess this is part of being competitive and also somewhat wise. If that is true, then we should all be looking to the decision-enabling and extensions to the EDW’s that were implemented between years 1998-2002 and learn from them. And then invest now, to achieve what these firms accomplished then…position for immediate success, growth, and competitive advantages in the future.

For the past several years, a number of companies have done very well after implementing Enterprise Data Warehouses (EDW) or have moved to the newer focus of Business Intelligence (BI).

Reviews and analysis have led me to believe that there is a marked difference in what is transpiring in many companies when they provide detailed data closer to the customer contact person, enable managers and executives to view and manage data from across multiple organizations, and combine views of data that reflect multiple resources.

Using detailed customer behavior data, along with life-stages and lifecycle data, local economic data, and then focusing on multiple channel communications to introduce changes and availabilities may provide a much reduced amount of resources utilized with a firm and also reductions in the cost of doing business. This alignment has borne out in many firms in many industries.

In past recessionary times, many leaders have exploited BI in resource management, internal financial management, product and category management, supply-chain management, business performance management, analytical marketing, and sales actions along with customer loyalty and retention.

ACHIEVEMENTS IN RECESSIONARY TIMES ?

Well, what has been observed and learned? The closer the data is to the customer, the more effective the decisions are and much quicker action. When action is taken to manage resources directly, the results are highly positive, in both the short and long-term.

Examples abound across the many case histories of firms which have succeeded in managing through recessions while also positioning their management team for acceleration in business, revenues, profits, and shareholder value. Let’s take review examples from the recession of 2002-2003 and the subsequent five years to mid-to-late 2007. Leadership firms such as Federal Express, 3M, Royal Bank of Canada, National Australia Bank (NAB), WESCO, Nationwide Insurance, NCR Corporation, BNSF, Union Pacific, METRO Germany, WellPoint, Wells Fargo, Bank of America, YUM Brands, Harrah’s Entertainment, and so on….they had all double or triple stock price appreciation during the period following the last recession (2002 to 2007). Each of these firms also won many awards for excellence in Data Warehousing, Business Intelligence, and/or creative analytical investments.

WHAT COMMON ACTIONS HAVE CREATED THIS HIGH VALUE?

Almost all of these firms have several key factors in common. First, they all built or enhanced their data warehousing and business intelligence actions in the period before or during the recession. It might be called: Strategy and Positioning. Each firm also did not drastically lower human resources or their budgets in IT/DW/BI. Each firm brought their customer and financial data faster and faster into their DW/BI infrastructure: they all provided customer-centric information as close to the decision-makers (and/or the customer themselves — online); they focused on capital investments utilization; they invested in new local locations, to lead their industries. Each gave their own people advanced tools for BI, communications, workload management, reporting procedures, and measured on a more timely basis. These step-by-step evolutionary uses of DW and BI during the recessionary periods resulted in resounding success.

WHAT WE NEED TO DO NOW!

As we proceed further into this recession, financial readjustments and new rules of doing business, enhancements to risk management and capital investment resource utilization, and desire to maintain equilibrium ... there is an opportunity for firms to now invest more in DW and BI to ensure their success and leadership in the coming periods. Learning from the leaders, repeating successes of the past, and creating knowledgeable decision-making are the hallmarks of true success.

Firms should be investing in accelerating customer relationships, achieving greater loyalty and more effective marketing with sales alignment, and to enable focused decisions by better equipped managers and employees. The time to reconfigure, reinitiate, and re-accelerate BI is critical during any recessionary period.

"When the going gets tough, the tough get going" brings to mind the strengthened continuous commitment of companies who understand the effects of re-investments in their people, their customers, their products or services, their channels, their informational tools, and their capabilities.

If your company has multiple systems performing BI or multiple sets of databases (or data marts) which are highly expensive, now may be the time to discuss consolidation and "The Business Value of Increasing the Investment in DW and BI during a recessionary period". This could fund an entire program with no additional expenses to your company. It may well be worth a factor of 3x-5x in value for your company’s stakeholders.

What are you thoughts on:

• What are real roadblocks to getting high-level executives to listen and understand?
• What techniques have you utilized to overcome each of these roadblocks?
• What are the proof points that you see necessary to get increased investment in BI?
• How do you get the CMO, CSO, COO, CFO and CIO into changing investments?
• What successful cases are available for discussion?

Do you agree? What are you thoughts on this?

 "It was the best of times, it was the worst of times," wrote Charles Dickens in 1859 as the opening line of his great work: "A Tale of Two Cities." Therefore, it is most appropriate for this blog to open with a similar truth of the world's situation today almost 150 years later.

Our world is quite dynamic and bringing us alarming news every day of financial, legislative, political, and technological change. In the commercial business world, corporate leaders are seeking new methods of advancing their awareness and development of useable information based on real truths. Historical data and current actions combined are enabling decision-makers to see and act on more knowledge-based decision-making. The value of both short-term and long-term very detailed data, combined with effective business practices and processes, can lead executives to more confidence in their decisions.

Have we really thought about how to communicate this concept to upper management?

About 5 years ago, a young leader of a well-known technology company wrote in the Baylor Business Journal: "an integrated approach to enterprise decision management will no longer be a competitive differentiator, but a simple requirement. Companies that aren't already evolving toward this vision today may be too late. Vision and leadership, not technology, are the crucial components of an enterprise approach to decision management." He forecast that by year 2008, most companies would have achieved this objective. Unfortunately, we know that a large majority of firms are still struggling to complete this task and/or have decided to let individual departments and managers be responsible for their own 'truths' and BI systems.

Today most successful business leaders know:
1.That multiple versions of the truth create non-decisions and inaction
2.The multiple systems and databases created in an organization are expensive to maintain, to update, and to keep current, and also synchronized with the rest of the business
3.That customers appreciating good service and a positive experience return for more orders and more business, even bringing their friends or communicating the highest of plaudits for firms that provide very positive experiences
4.That corporations that downsize and also reduce their expenditures on managing information and providing enhanced business intelligence usually are not the ones that lead their industries when coming out of a recessionary period
Can you add to this list of known critical issues?

It is this last point above that is most important at this juncture in time. In retailing and production industries, it has been the norm to lower production and distribution, since sales are slowing and revenues are decreasing. But this may not be the only effective decision. Smart executives translate reductions in revenues into catapulted requirements to lower INVENTORIES and provide the right products to the right customers in the right markets by effectively managing both the capital assets and the human resources. Maybe producing a different distribution of products is more sensible; and reacting directly to changing customer needs drives the decisions, not just the budgets, expenditures, mass marketing, and lowered pricing.

In financial service, smarter executives understand that customer confidence and personalized inter-communications create longer-term value with customers, both retail and commercial customers. So, in difficult times, it is appropriate to move closer to the customers and work WITH them through the recession and their lifecycle and life stages. Event-Based marketing and detailed personal 'financial life planning' could accelerate customer loyalty and revenues. The large volumes of young people in credit trouble and aging 'baby-boomers' are needing new services directly aimed at their future happiness.

In travel and transportation, smart executives utilize detailed data to lower the costs of fuel (e.g. BNSF), lower the cost of inventories (or capital investment utilizations, e.g. UPR), and raise the customer confidence (through relationship and profitability pricing) to maintain and enhance business. Companies also look at excess inventories and re-price them instantly. "Next best offers" (NBO), or analytical CRM offer management, can accelerate cross-selling and reduce the exposure to reduced revenues.

In manufacturing, smart executives focus their resources to re-design, re-tool, or find new channels for distribution of their products. They also focus on lower inventories and working with both the supply-side (raw materials or distribution inbound suppliers) and the demand side (customers, retailers, distributors, or alternative channels) to maintain customer loyalty. Now is the perfect time for them to create deep detailed analytics and BI from their ERP or like-systems (that seem to lack such capabilities).

In communications, bundling of services and utilizing the high-cost capital investments (such as the network or the local stores and distribution outlets) provide an opportunity for smarter executives to focus not only on the demographics but directly on personalized offerings and bundles to keep customers happy, loyal, and communicating their value within their various communities. This is also true for the commercial side of their businesses. In recessionary times, "price is important"; keeping customers may be the highest priority; and "no revenue is no revenue". Every customer actually does count in these types of industries. If for nothing else, it's just "cash-flow", to pay fixed expenditures. CFO's need CMO's to make things happen differently in recessions, to keep customers, up-sell customers, and have them bring other customers. The need for "Near-Real Time" (NRT) with relevant, personalized, and meaningful marketing can accelerate a positive rebound or new growth.

In the health provision industry, pharma production, and health insurance the most needed services may be in the educational area. Young and older people need to understand and utilize health services much more effectively to prevent health problems. Using past and present claims provides an opportunity to communicate effectively to and through the health industry's various channels. An 'once of prevention is worth a pound of cure'. BI should be used to help people manage health and also involve them, with their consent, in new ways. In certain states, smart governments have utilized various DW and BI solutions to provide better health services, new awareness programs, enabling immunizations for children and immigrants, and even food nutrition and food stamps programs for the needy, $aving hundreds of million$.