Posts Tagged ‘BI’

skydivingA recent article we came across makes a clever association between what happens when you jump out of an airplane and the adaptability required of today’s business owner.  We thought it worth sharing with you today.

Morten Middlefart (yes, that’s his real name, and yes, he probably gets that a lot…) is CTO of Targit, a company specializing in Business Intelligence (or “BI”) tools.  He also holds an MBA and a couple of Ph. D.’s.  He’s also a certified skydiver.  His official site, by the way, is here.

Morten notes that jumping out of an airplane can be stressful.  (Who knew?)  In fact, after interviewing hundreds of skydivers he learned that the brain adapt in two distinct ways.  The first is entirely subconscious.  About 75% of skydivers have that “falling dream” before they ever jump out of a plane.  It’s the recurring dream of falling from a great height but awakening just before hitting the ground. It’s not a dream based on experience, but something – the fear of falling, actually – programmed into our brains since birth.  It’s an instinctual fear, one of two that all humans possess (the other being very loud noises).

But the more a person skydives, that dream changes, and in time one no longer terminates the dream at the point of impact.  Other dreams, like malfunctioning parachutes, invade – but the dreamer always lands safely.  With a little experience, it appears, the brain adapts from experience to how it conceptualizes falling.

The second adaptation, he found, is that first-time skydivers almost always black out the first few seconds of their jump.  But on the second jump, and thereafter, they don’t.  Why is that?

According to Dr. Middlefart, the human brain is more aware of everything going on around it.  By the second jump, it is already constructing a new reality based on those previous sensory inputs.  In other words, it adjusts!  The point is, we have, he notes “the power to reprogram our minds extremely quickly.”

So, while we can’t out-calculate or out-remember a computer, we can “out-adapt” one.  You can’t run a business through a series of processes that never change.  Even McDonalds, the king of repeatability, changes it up from time to time.  The author points out that “there must be heart, thought, and constant adaptation.”

Put another way, a human can lose one deal and learn from it, whereas relying too heavily on computer processes may require you to lose a thousand deals before the machine has enough statistical volume to know why – let alone, do something about it.

Where the computer can help is in providing the data – and the analytical tools to make sense of the patterns.  The computer can present scenarios, cases, paths (or data trends) worth following.  But, rather happily one supposes, it still takes human intelligence, human intuition, human adaptability and human thought to draw out the appropriate conclusions quickly and fruitfully.

It’s comforting to know that while BI has its place, it still takes people like you and me to make sense of it all, to use it, and to make our businesses that much better as a result.

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business analytics_3In this concluding post of our three part series on business analytics for the small business, we’ll look at what Aberdeen Research recommends small businesses can start doing today to begin using data to replace gut-feel in improving operational performance.

(This series of posts started here.)

Aberdeen summed up their research as to how companies can start to become true ‘Leaders’ by providing three key takeaways or “Recommended Actions.”  We reprise them here:

  1. Figure out what metrics (or KPIs) in your business truly matter, and measure them obsessively.  Aberdeen notes that it is virtually impossible to overstate how important it is to create a sound and comprehensive set of Key Performance Indicators.  As they point out, it’s a lagging indicator mindset to say we did $X,XXX in sales last quarter.  Instead ask: What are the metrics that underpin revenue generation?   Define those predictors and you’re on your way to creating leading, not lagging, indicators that you can use to define future goals.  A solid KPI structure helps companies “better articulate and sharpen their strategy, and ultimately helps them attain those underlying goals.”
  2. Data is the lifeblood of your company; treat it like gold.  Data, even in small companies, is growing at a phenomenal pace —  estimates average 40% even in smaller businesses, year over year.  And it’s coming from more directions.  To manage this blizzard of data, you need a single centralized repository of data.  That single repository in turn will facilitate far greater cross-organizational collaboration, communication and cooperation within the firm.  It all starts with the philosophy of having everyone understand data’s importance to the company.
  3. Looks matter, so remember that when selecting technology.  Companies with deep IT pockets have myriad options when it comes to selecting data analysis tools.  In all likelihood, you don’t!  So start with what you have.  A talented staff member with a facility with computers or a head for numbers.  A spreadsheet maven, perhaps.  Most of all, look at your current business information system – be it a basic accounting system or a full blown ERP system.  Is it current?  If not, can it be updated?  Today’s modern systems come equipped with no- or low-cost tools for ferreting out and analyzing your data.  Many come with dashboards, and user-defined roles tailored to the individual’s needs, by department or function.  Ask your system provider or reseller for a little guidance in this regard.  Since many of the newer systems utilize newer tools for this purpose, even providers themselves are getting up to speed in the use of these data mining tools.  But they are there, and they are a key factor in your ability to use the data you produce to drive your profits tomorrow.  People are more likely to use tools they have and know, or that are visually engaging.  So start there. 

As Aberdeen concludes, “With the right tools in place, small companies will find themselves better positioned to take advantage of their analytical culture and mindset, and ultimately drive improved business performance.”


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business analytics_2One problem that small businesses share with their larger brethren is the classic “big data” problem.  Simply put, it refers to the notion of “too much data coming in the door every day,” as phrased by the experts at Aberdeen Research.  While there are insights to be drawn from all that data, most companies can barely collect it, let alone make sense of it.  And operationally speaking, most small businesses simply “don’t know what they don’t know” when it comes to the core operation of their business.”

So, they look to business analytics to provide visibility and clarity.

As Aberdeen notes, “the effective use of business analytics can transform the culture of an organization and drive measurable performance improvements.”  For small business, where “cash is king,” it is necessary to create a fast and efficient information flow to improve process efficiency and ultimately improve cash flow. 

Aberdeen’s research, when looking for Key Performance Indicators (KPIs) and their results conveniently divides companies into “Leaders” and “Followers.”  It shows that Leaders exhibited a 19% Year over Year cash growth versus just 1% for Followers.  87% of Leaders saw a decrease in cycle times (compared with 38% of Followers) and 64% were satisfied with the speed of delivery of information (versus 20% of Followers).

The obvious question: How did they do it?  The short answer: organizational maturity – not in the sense of company longevity, but in the sense of culture and the firm’s need and desire to make decisions based on more than just gut feel.  And of course, that’s where analytics comes into play.

Of Leader companies, over 70% focused on key indicators.  That’s nearly twice the rate of Followers.  So, for example, if profitability is the goal, consider tracking costs through the supply chain, examine your discount practices, analyze your high product customers or product lines, and track margin-eroding and perhaps unnecessary expenses.  Whatever those KPI are that underpin that goal, track them.  Not just by gut feel, mind you, but by actual data – the data you presumably hold in your accounting or ERP system.

It’s not enough to collect the data, you have to tease out, organize and analyze that data.  And then, you have to act upon it!

There are tools by which to do this, including:

  • Dashboards in the more modern ERP systems that can be customized to your KPIs
  • Data management tools
  • Data query, discovery and reporting tools (report writers, like Jet Reports, among others)
  • Interactive drill-down charts and reports

And none of these even begin to explore the finer points of well-defined customizations to your systems that can help business owners quickly parse what’s important from what’s not, thereby giving their executive teams actionable decision support.

In our next and final post in this series, we’ll reprise the key takeaways from Aberdeen’s research, the “Recommended Actions” that your firm can take today to start moving away from gut-feel and into the realm of real, relevant, business analytics – the kind of stuff that will have you telling your business friends all about how you used Big Data to solve your small business problems!




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business analytics_1It’s a fact: 98% of the six million American businesses employ fewer than 100 people and are deemed “small businesses.”  Moreover, they employ fully 42 million Americans.  Yet these “Mom and Pop” shops as they are often (and often derisively) called face the same kinds of challenges as larger companies, albeit on a smaller scale.  And today, they all need this thing called “Business Intelligence” in one form or another.

Historically, small businesses simply lacked the resources and wherewithal to employ sophisticated tools aimed at analyzing their business results.  But today, those tools are within the reach of all but perhaps the smallest of that 98% of American firms.  And according to research done by Aberdeen Research recently, those analytical tools are making the short list of potential investments on the part of small businesses everywhere.

According to 2013 survey by Aberdeen, following are four key Top Priorities for Business Investment among all small firms:

  1. Business Intelligence and Analytics
  2. Enterprise Applications
  3. Mobile Infrastructure
  4. Data Management

Aberdeen reports that typically 40% to 50% of firms with revenues above $10 million are in the market for one or more of the above business investments.  For firms under $10 million, it’s still mostly in the range of 20% to 30%.

After the economic meltdown, ‘cautious optimism’ is the watchword of the day among businesses.  Besides hiring, companies are looking for intelligent ways to put money back into the business and to encourage growth.  And because of the very nature of small business – fewer employers doing more with less – the impact of every day decisions can be proportionally much greater than in the larger enterprise, which has much more room for error.

Which customers should I spend my time with?  What product line should I cut?  Where are my top margin-producing sales?  Where should I spend my time (and money)?  These questions are at the heart of every small business.  And because of the need to go beyond “gut feel” decisions, more small companies are turning to business analytics today to provide more fact-based decision support.

The drivers for more data-based decisions cited included an over-reliance on “gut-feel” for major decisions… the fact that firms have “lots of data, most of it unused”…  poor visibility into operational performance… and the increased demand from employees for analytical capability.

If these sound like issues in your businesses, don’t be surprised… and take heart – you’re not alone.  In the second of this three part post, we’ll look at how companies used business analytics to transform the culture of an organization, and then look at some of the characteristics of today’s leading small businesses and how they affect their performance, according to Aberdeen’s research.    Stay tuned…

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biRecently the folks at Aberdeen Group released a report on trends in business analytics, specifically, the increasing use of a company’s stored data intelligence to help it improve business performance.

In the past, companies might have had reams of data about customers, successful strategies, successes and failures, and it would have been mostly in printed form.  But increasingly today firms have within their accounting, manufacturing, reporting and other automated systems an increasing body of collective knowledge about their customers and their business.

The best companies, according to Aberdeen researchers use embedded Business Intelligence (“BI”) techniques to “drive strong analytical activity in more than six times the percentage of their workforce compared to all other companies.”  That’s a striking statistic.  Basically, it means that the smartest companies are empowering their staff to do more, by better utilizing the data available within their servers – by far – than their trailing competitors.

Companies are challenged to do this.  The top challenges include the fact that their data is poorly integrated or widely scattered across disparate systems.  They have difficulty linking their analytics with existing tools.  They also cite a lack of IT expertise, as well as “usability and adoption” issues, and a lack of support resources.

As a result, Aberdeen listed a few takeaways and recommendations for companies wishing to embed BI in ways that will help them improve, given that most of their users will be of the non-technical variety.  These include:

  • Marshall your troops.  Research shows that effective collaboration between IT and the business’ users is critical.  The best scenario is where an internal executive-level champion helps get projects off the ground by demonstrating commitment to bringing the right resources together.


  • Tip the odds in your favor.  The best place to start embedding BI is in any area with the strongest need for analytical capability.  This is typically where software usage is highest.  Successes here will be magnified.  Whether it’s CRM, financial management in accounting or e-commerce in operations, find the best/easiest place to start infusing analytical activity into key business processes.  You’ll get the most willing users and the quickest adoption, as well as some early successes that will provide momentum.


  • Treat the patient, not just the disease.  Projects sometime fail because implementers “focus only on the apparent analytical need: the data needs to be cleansed, the reports are too static, or there aren’t enough licenses available.”  Focus on BI tools and methods that resonate with the specific needs of a given type of user or business area, and help them gain “intuitive views of metrics that closely align to that person.”

Our translation of all the above: Find the low-hanging fruit (the areas where the most data resides and it’s most readily harvested)… look for where the business will gain the quickest bang for the buck… make it familiar and comfortable to the employee who works with the data… and use common tools like report writers and spreadsheets to mine the data for a few key difference-makers to that department.

Aberdeen’s research shows that the companies that are best at BI are more than twice as likely as others “to have a standard process in place to gather and communicate specific business user needs for analytics.”  Make it quick, keep it simple.



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A recent white paper published by Birst, Inc., a San Francisco based provider of “agile business analytics” software and solutions, points up the four ‘foundational requirements’ of a business intelligence (commonly called “BI”) solution.  They remind us that our ERP systems are merely a tool, a means to an end, and that end is to extract intelligent information from the underlying data in order to improve our business management decisions.

The article, available here (you’ll have to provide contact info first) points to four key capabilities (along with our own commentary about them):

1.) Historical analysis and reporting.  You want information not just on your business performance, but on the key drivers of that performance as well.  You need to know not just your results, but your influencers.  This usually involves mapping and understanding data over a long time frame, measured often in years.  That’s a lot of data.

2.) Forecasting and future projection.  Collecting and understanding your data is one side of the task.  Projecting into the future is the other.  So for example, once you know something about the progress and flow of past sales deals, the size of your pipeline, the length to close… you’re more able to project the progress of future deals.  The goal is to align your resources with your forecast for maximum efficiency.

3.) Ability to integrate information from multiple business functions.  Integrating the data you need to make better decisions may require multiple data sources.  Obviously, this burden is minimized if you’re operating under, more or less, a single (or limited) silo of information.  This is where an integrated ERP solution starts to really shine.  Often the data there, give or take the contents of a couple of spreadsheets, is more than enough to provide meaningful insight.

4.) Easily explored reporting and analysis.  Decision makers need to understand the big picture.  Sometimes, they need a good bit of detail to be able to do so.  This speaks to the need for explorable reports, drill down capabilities, ad hoc queries and business dashboards.  Flexibility and robustness, without being overly complex, are helpful.  Today we find the better ERP systems can provide much of this.  More sophisticated BI solutions will boost your reporting capabilities significantly, a feature most appreciated in larger, more diverse organizations.

A solution that provides the above foundation, whether it’s part of an ERP system or an add-in, ensures you’ll have the right analytical tool when it comes time to convert hard data into meaningful information that can inform better decision making.


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We introduced Business Intelligence (BI) in our prior post, noting the growing demand on the part of company managers to have the ability to quickly and easily drill down into company data for better, more strategic (and ad hoc) decision-making.

One of the best tools, made available by today’s more modern ERP systems, involves drilldown.  All too often, clients we see possess the ability to drill down into their data, but lack the training or diligence to pursue it.  That’s a shame, because with drilldowns – essentially, the ability to use your mouse and a few keystrokes to penetrate and display crucial accounting and inventory data on your own – you can do a host of useful things, like…

  • A call center manager might be able to understand what products drove call volume to an all-time high.
  • A warehouse manager at a distribution firm might better understand the reasons behind a rash of recent late shipments.
  • A CFO could get a better handle on which service areas are responsible for higher than average costs, and why.
  • A parts service manager could see new trends in part sales, and gear up (or down) accordingly.

The list of samples is endless.  And it’s all available due to an ability to be ‘agile’ in the pursuit of data that can lead to better decisions.

In their recent report on Agile Analytics, the researchers at Aberdeen summarized their findings with four Key Takeaways, which we note below:

  • Automate and standardize business intelligence wherever possible.  Time is scarce, and users are often harried.  Simplify their jobs by automating the most commonly needed tasks, reports and information.  Make the data easy to get to.  This ultimately frees up scarce IT resources for more challenging work.
  • Democratize analytics.  Involve users in the creation and dissemination of data at every step of the way.  Allow them to review and select presentation tools if possible.  Give them a role in the analysis.
  • Let business users take care of the “last mile.”  Allow users to customize the presentation of the final information they seek.  Tailor the dashboards.  Ensure that the right data is available to the right folks. 
  • Make interactive visualization pervasive.  For some BI needs, a static report view is fine.  But in most cases, getting dashboards into the hands of the most users serves a company’s best strategic purposes.  As Aberdeen Research’s David White, author of the study referenced here says, “It provides a shorter path to needed information and shortens the time to decision.”


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