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?
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.
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.
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.
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.
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.
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.
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 ?
