An Interview with Dr. Robert Sweeney
Professor, Department of Finance and Financial Services
Raj Soin College of Business
Wright State University

Dr. Sweeney is the author of numerous articles on such topics as the small firm effect, option trading strategies, and valuation. Sweeney has also been recognized as an outstanding teacher as evidenced by the 1995 Alumni Award for Teaching Excellence (Wright State University). Dr. Sweeney has pioneered courses at Wright State University incorporating quality topics into the curriculum, team teaching as a delivery mode, as well as being the founding faculty member of a course offering the students an opportunity to invest "real money" in the stock market.

Dr. Sweeney has also spent three years as a consultant with Teradata. As a consultant, he co-authored two cases on data warehousing. Additionally, he has been instrumental in developing and delivering a training program for the Teradata sales team.

1. Please provide a general overview of full cycle assessment value.

It's a fact of business life that departments in large enterprises compete for funding for technical projects from a pool of limited resources. Yet, once the funding is attained for a technical project, only very rarely is a full review completed to assess how the project actually performed-how it fits with the enterprise's strategies, how it supports the enterprise's mission, how much return on investment it provided, how many opportunities that might otherwise have been lost it actually helped uncover, and so on. Usually, enterprises project assessments along these measurements before the investment, but then do not follow up afterward to assess the real performance of the investment.

But now, top management is under more pressure than ever to report accurately about the value of its investments-and it must report that value with firm confidence. This is an outgrowth of several factors, from the Sarbanes-Oxley act of 2002, to the ever-quickening pace of technological developments, to the need to constantly upgrade and train on current investments.

The process of full cycle assessment value is really an audit of any decision-whether technological or organizational-from initial adoption to post implementation. The process goes beyond a quantitative assessment (for example, ROI to show that the technology delivered bottom-line returns greater than its initial cost) to a qualitative assessment (for example, looking at how technology enhances or develops enterprise performance in ways that could not have been enhanced or developed without the technology.)

2. How are opportunities for improving a business identified through full cycle assessment value?

The process of full cycle assessment value calls for an enterprise to assess its strategies, mission, processes and investments by putting them to the test against what we call "value levers". These four levers represent the ways in which an enterprise can understand the benefits a technology investment or organizational change may deliver to an enterprise before making the investment or change, as well as the ways in which such investments or changes should be measured on an ongoing basis after implementation:

1. Revenue enhancement-simply put, the ability to increase revenue by selling more. This can mean anything from using technology to drive more revenue from a specific product line to using CRM to attract new customers or to increase wallet share from existing customers.
2. Cost containment-the ability to produce the same level of sales or service at a lower cost. Technological tools can help enterprises understand how to take cost out of the process of manufacturing, for example, without adversely affecting quality, or to see how changes in one part of a process will affect the process further downstream.
3. Cash flow acceleration-solutions designed to accelerate cash flow bring the cash flow closer to fruition without necessarily altering the amount of sales or the amount of costs.
4. Risk mitigation-This can mean taking the risk out of the decision to invest in a technical solution by understanding the value it will deliver or the problems it will solve. This can also mean understanding how important externals-Wall Street, business analysts, investors-will view an enterprise once it makes any major internal decision, whether that's investing in a particular technological solution or modifying a product line.

3. Does this assessment process apply to any opportunity-from, say, streamlining human resources procedures to technological improvements-or does it focus solely on technological improvements?

This process can, indeed, be applied to every major opportunity or decision an enterprise might face, whether from a technological, Human Resources, or mergers and acquisitions perspective.

4. What is the particular value in identifying technological opportunities for improving a business?

A real-world example would be data mart consolidation, which is really all about getting employees across the enterprise to understand how their positions fit into the overall value of the enterprise, how their work influences people both upstream and downstream in the enterprise, as well as suppliers and customers. However, in a data mart scenario, expenses fly under the radar screen. Since data marts are created in the first place to manage data in a particular department, it's inevitable that duplicate or even triplicate pieces of information will exist, while other information will be missing-and yet no one will realize it because each area is looking at the pieces and not at the whole of how the enterprise works together.

Data mart consolidation is about giving everyone access to relevant information to not only make decisions, but also to understand how that decision will impact the entire organization, from the supply chain through the entire enterprise to the customer.

Thus, data mart consolidation fits all four levers-providing revenue enhancement (through improved understanding of business opportunities), cost containment (overall costs, such as maintenance and training, of data mart consolidation are lower in the long run than of multiple data marts), cash flow acceleration (again, through improved understanding the business), and risk mitigation (through minimizing lost opportunities from not understanding the whole of the enterprise). What's more, data mart consolidation also enables an enterprise to have the single view of the data that is necessary for applying measures to other investments and organizational decisions.

5. What if more than one opportunity presents itself? How should a company decide which opportunities to pursue, which to put on the backburner, or which to do first if a company decides to pursue multiple opportunities?

Decisions should be mission driven. Just because a decision is profitable doesn't necessarily mean it's the right thing to do right now. Being solely profit driven makes enterprises drift from one quest for the next profit to another. Being mission driven enables enterprises to create value for the long run-for themselves, their stockholders, and their customers. Applying the full cycle assessment value process of measuring decisions and investments against improvement opportunities empowers enterprises to be mission driven and to maximize their true effectiveness for the long haul.

6. What kind of training does an enterprise company need to apply full cycle assessment value to its decision making? Is this a top-executive-level technique only, or is this a technique that should be used enterprise-wide?

This technique should be applied enterprise-wide. When employees have the line of sight to share a single view of an enterprise, they can then make decisions that support the entire enterprise, not just their department. For example, while it might be more cost-effective for a department to have a data mart, it would be more valuable for the entire enterprise to consolidate its data marts. I've worked with Teradata relative to training consultation for overall awareness of value as well full cycle assessment of value. Clearly, they are on the cutting edge of collaborating with customers to forecast, optimize and validate business value.