CFO.com magazine just released an article called “Testing, Testing: The New Innovation Game“, “Harrah’s Entertainment exemplifies the burgeoning use of broad, IT-enabled experimentation to improve businesses.”. The main point in the article is that information captured in IT systems enables innovators to test their speculations better than ever before.
This is the promise of Business Intelligence (BI) and its predecessor, Data Warehousing. In my mind, what’s most important is the skill to make assessments about the data captured. I have clients that call this “Marketing Analytics” while others call it “Data Mining” and their vision is to capture greater revenue and build deeper customer loyalty. Fundamentally, the data needs to be organized in a manner that allows the analyst to do their analysis. I find that we are often in conversations about ways to lower the investment to pull data together because it is generally too slow and costly to get data prepped before doing the analysis.
A big concern I see in the talk around Best of Breed Systems is lack of conversation about the need to build a Business Intelligence system. Although there can be pre-built integration between those systems, the data elements generally will be decentralized. This leads to significant investment in the development of a data warehouse to link and centralize information to support analytical reporting. Can this be avoided?
For small to mid-sized businesses, I am interested in bringing analytical tools to ambitious organizations at low cost to help them produce competitive advantages. As such, the argument for selecting and implementing fully-integrated systems, such as NetSuite, significantly drop the cost of getting at data to make meaningful and actionable assessments. See the “Best-of-Breed Business Systems: Traps & Lies ” post for more thinking.
Most growing organizations have decentralized systems, and hence they have problems getting at data. We have provided a good interim solution before they migrate to fully-integrated systems. See our “Remote Reporting Services” offering.
What opportunities and challenges do you see with getting at information to become competitive?
Great commentary! What is perhaps even more critical is the need to understand prior to systems selection and design is:
“What information is needed, when?” and “What business decisions will that information support?”
All too often, we see this step missed, resulting in a large investment that has not eliminated the need for spreadsheet “gymnastics” that are based on individual “recipes” for capturing and analyzing data.
This impacts the cost of finance in a dramatic way. For every spreadsheet, consider that there is at least one person pushing it. Then toss in the “hit by a bus” factor when that employee and his/her recipe is no longer known, as it was never documented.
Philip,
Thanks for your comment. What I often find is small and mid-sized businesses are often focused on specific pain points and they try to solve just for that concern versus stepping back and thinking about an overhaul. Much of the issues of getting at data is that it is scattered due to the evolution of thinking and adoption of systems without the reflection of the longer-term impact of taking immediate action to solve a problem.
You brought up spreadsheets and they are interesting. I like to think about spreadsheets in two dimensions: Projects or Operations. Spreadsheets are great when they are serving a project and they live only for the life of that project. But when a spreadsheet is used for an operation, it generally indicates that the enterprise system is weak (or was not fully implemented). Those operational spreadsheets represent another place that data is locked up preventing management from making meaningful business performance assessments.
I will be writing another article soon that goes into more detail.
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