IBM Business Analytics User Group
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Delaney Turner 270003RQ8K Delaney.Turner@ca.ibm.com Tags:  iod11 ibmsoftware business_analytics 334 Visits
1. If you write a book about analytics, they’ll make a movie about you. It may even star Brad Pitt: For the second year in a row, the event’s keynote speakers are co-authors of a famous book about analytics. Last year, the unlikely duo of “Dubner and Levitt” recounted their insights from the world of Freakonomics. Hollywood made that book into a documentary. This year, IOD welcomes Billy Beane and Michael Lewis of Moneyball fame. Beane, you may recall, was the general manager of the perennially cash-strapped Oakland A’s baseball team who found a new (and controversial) way to win by analyzing player statistics that other teams both overlooked and undervalued. A bestselling author, Lewis transforms a discussion about sports stats into an exploration of the nature of talent and how to identify it to maintain your competitive edge. Hollywood made Moneyball into a movie, too. Here's the preview:
2. You’ll find ways to boost your AQ, guaranteed: This year we’re offering 200 breakout sessions across five distinct tracks covering business intelligence, delivering customer success, financial and risk analytics, predictive and advanced analytics and new this year, social media and customer analytics. Many of the breakout sessions are led by our customers who are eager talk about their own journeys to better business outcomes. Listen, learn and take your next steps toward a higher level of analytics maturity. Not sure about your AQ? Take our quiz before you leave for Vegas.
3. There are precisely 46 days left to take advantage of the Early Bird Discount: Actually, it’s less than that. Take away the 12 weekend days when you’re unlikely to be at your desk, there are in fact 34 days. Of course, you can register after Aug. 31, but why pay more? Click here for registration info.
4. You can save another $100 off your registration with a single tweet: Yes, it is just that simple. Follow @IODGC2011 and tweet with the hashtag #IOD11 and we’ll send you a code through direct Twitter message (That is, if you’re OK with us following you as well).
5. You can get IBM-certified for free: Take up to three IBM software certification exams at no charge and take as many more as you’d like at half-price. You’ll save $100 per exam and come home with certificates suitable for framing.
6. Information On Demand boasts IBM’s largest EXPO. Explore more than 300 exhibitors, meet with IBM experts and see hands-on demonstrations to see what’s possible with our software, get answers to your toughest questions and try the latest products that until now you’ve only heard about. There's lots more about the EXPO here.
7. It’s not just for Business Analytics: Information on Demand 2011 is also home to Information Management and Enterprise Content Management Forums, with in-depth introductions to IBM solutions for data management, enterprise content management, information integration, master data management and data warehousing. These capabilities are fundamental to successful analytics deployment, so be sure to attend some of their breakout sessions or demo peds as well.
8. It’s even better when you bring your team: Attend with your colleagues to maximize your learning and professional networks. Divide and conquer when you can’t decide between sessions. See more of the EXPO and get more of your team excited about what’s possible with IBM solutions. Collaborate on alibis if necessary. Plus, sign up six of your colleagues and the seventh conference pass is on us! Contact the IOD 2011 Event Team for more information on our company pass discounts.
You can learn by listening, learn by watching or learn by doing.
Or, you can go to Information On Demand 2011 and do all three.
Once again, IOD offers an abundance of learning opportunities to help you increase your product knowledge, sharpen your professional skills and get the information you need to solve problems or move your project forward. I've scanned the Business Analytics Forum Guide (BA Forum being a major component of IOD 2011) to highlight 10 ways you can come back from Vegas much better equipped to turn insight into action. Some of the opportunities are located in the EXPO, others are breakout sessions that you'll need to schedule in your Agenda Builder.
1. Play in the Usability Sandbox: Share your experience to shape product direction. Test-drive new prototypes and meet with our usability experts in small-group design review and feedback sessions. You'll also have the chance to vote on and prioritize use requirements. This year's sessions include Dashboarding (BGN-1545), Mobile BI (BGN-1549). Advanced Data Modeling (BGN-1550) and Social Networking Analytics (BGN-1554). See page 67 of the Business Analytics Forum Guide for a full list.
2. Learn to better navigate IBM Support: New this year, our "Navigating IBM" drop-in area lets you talk one-on-one with subject matter experts who can guide you through the programs, processes, policies and systems you need to use for Support and Training. We've geared these sessions to focus on increasing your satisfaction with demonstrations and discussions focused on online support and knowledge resources, searching and enrolling in training, Web IDs and IBM Customer Numbers (ICNs) and using the support request tool. You'll find it in the EXPO.
3. Drop in on our Demo Theaters: These 30-minute sessions help you lean more about topics that might not be covered in full breakout sessions. Join our product managers as they guide you through new solutions and little-known product features in IBM Cognos 10, IBM Cognos TM1, IBM SPSS Decision Management and more.
4. Labs! Labs! Labs!
Our Hands-on Labs feature experienced professional instructors providing classroom-quality training. Each three-hour session takes you on a deep dive directly into a specific product to give you a greater understanding of its features and potential. Many of the nearly 20 sessions at this year's event were suggested by last year's attendees. Titles include Foundations of Predictive Analytics: IBM SPSS Statistics (BGN-3469), New Self-Serve Reporting Capabilities in IBM Cognos BI (BGN-3632) and Advanced Generated SQL Concepts and Complex Queries (BGN-3696). See page 63 of your Business Analytics Forum Guide for the full list and be sure to add these sessions to your Agenda Builder.
Our Products Lab lets you test drive our products at your own pace and on your own schedule with step-by-step instructions and direct input from product experts who are always on-hand. You'll find it in the EXPO and you can drop in any time.
Also in the EXPO, our Services and Education Lab lets you explore our training options, discover our new new approaches and work one-on-one with our consulting services team. Discover how to share your knowledge with your team back home with Web-based training courses, self-paced virtual classroom options, IBM Cognos embedded learning videos and instructor-led online training. Drop in whenever, no need to book.
5. Take advantage of pre-conference training: Get a head start on the conference with two full days of hands-on training specially priced for Forum attendees. This year's sessions include Professional Report Authoring (B51C9), Automated Data Mining (0ACG2), Data Management and Manipulation (0G5C9) and Authoring Reports with Multidimensional Data (B51C1). See page 18 of your Forum Guide for more.
6. Get certified for free: Save up to $600 by taking three IBM Software Certification exams at no charge, and take as many more as you'd like for 50 percent off the normal fee. Certification exams are available throughout the conference and a full list of certification exams is available here.
7. Boost your business leadership skills in our Business Leadership Forum: An industry-specific program for executives, managers and decision-makers. We've put together a rich curriculum of customer case studies, panel discussions and industry solution overviews focused on resolving key business challenges. Choose from 34 sessions exploring operational efficiency, customer and financial analytics, risk and compliance. Session titles include "How Banks Can Improve Customer-Centricity with Advanced Customer Customer Profitability Analytics" (LFM-2609), "Driving B2B Sales with Predictive Analytics" (LSA-2268), "Fighting Fraud in Government Services" (LGV-1999) and "Getting Business Value from IBM Watson" (LSA-3008). See page 54 of your Forum Guide for a full list.
8. Have lunch with your peers: Our "Birds of a Feather" lunches let you discuss your challenges, strategies and successes with people just like you in a relaxed and informal setting. This year's topics include BI and Cloud Computing, Professional Report Authoring, Predictive Analytics, Statistics and Support. Our Industry Lunches let you discuss the challenges you're facing and the strategies you're using to resolve them. Whether you're in Banking, Retail, Healthcare or Manufacturing, these lunches are also a great way to reconnect with friends and expand your network with new contacts.
9. Talk to Support: Schedule time with an IBM Cognos or SPSS technical product expert for 30 minutes of one-on-one attention to resolve your toughest technical challenges. These experts have deep expertise within and across our Business Analytics product portfolio, so nothing is off-limits. Just be sure to indicate the issue and/or product you'd like to discuss. Previous topics have included Integrating BI with Active Directory authentication, Recommendations for fail-over while building cubes and Predictive modeling tips, techniques and best practices.
10. Schedule a workshop: This year's event offers a wide range of in-person and interactive workshops. You'll work in small groups with experienced IBM subject matter experts to boost your Analytics Quotient (BAW-3805), explore a Business Intelligence Competency Center (BAW-3808), or become a Value Integrator in Finance (BAW-3807). A full list is on page 60 of your Forum Guide.
In my next post, I'll be looking at the Social Media and Customer Analytics Track - the newest addition to the Business Analytics Forum curriculum. For more information about IOD overall, click here. To register with the $300 Early Bird discount, click here.
Tim O'Bryan 270001NMX7 firstname.lastname@example.org Tags:  predictiveanalytics provenpractices timobryan businessinsight businessanalytics businessanalyticstoday 692 Visits
Business analytics, meet the blogosphere.
Blogosphere, meet business analytics.
I’m sure you’ll have lots to talk about.
It's a conversation that's long overdue and if you’re at all interested in getting in on it, I strongly suggest adding a few sessions from the Social Media & Customer Analytics track at Business Analytics Forum. It’s a new track this year, and – full disclosure here – the one I’m most interested in covering. Social media activity is driving explosive growth rates in unstructured data. And whether you’re working for a restaurant chain, a fashion brand or global technology vendor - you need to make sense of it all if you're going to stay in the game. These largely technical sessions will help IT professionals understand our current offerings (including IBM Cognos Consumer Insight, IBM SPSS Modeler and IBM Coremetrics) and how business professionals can use them to create more targeted marketing strategies, build predictive models that reduce churn and that ultimately transform all that unruly data into actionable insights.
Like business intelligence, all over again
Your reasons for pursuing a social analytics strategy should be a lot like the ones you used to pursue business intelligence in the first place: too much data in too many places that take too long to report on, for too little insight. The only difference is that now, all the data lies on the other side of the firewall. And much like your first business intelligence deployment revealed opportunities to cut costs, boost revenue and manage risk, your social analytics deployment will help you build a strategy to analyze sentiment, identify influencers and turn customers' frowns upside down.
The full track session listing starts on page 46 of your Business Analytics Forum Guide, but I’ve provided a few highlights below. Feel free to add them to your SmartSite Agenda Builder today:
While we're on the topic of social networks, don't forget to expand your own network in person while you're there:
if you can’t wait until October and would like a head start, why not sign up for our August 25 Webcast? It’s called “Making Chatter Matter: Monetizing Social Media Through Analytics.” It features Don Pepper and Graham Mackintosh and it will show you how to move from seeing social media as a “shiny object” toward an integrated element of your customer interaction strategy.
We’re less than two weeks away from the IOD Early Bird deadline of Aug. 31. Ready to register? Click here.
Tim O'Bryan 270001NMX7 email@example.com Tags:  businessanalyticstoday businessanalytics performancemanagement financialperformancemanag... timobryan 355 Visits
The Close, Consolidate, Report & File process: Without Automation & Embedded Controls It’s A House Of Cards
Tim O'Bryan 270001NMX7 firstname.lastname@example.org Tags:  close-consolidate-report-... timobryan businessanalyticstoday businessanalytics fpm ccrf financialperformancemanag... 307 Visits
“Get your house in order.” This expression is referenced everywhere. I hear politicians repeatedly using it: “Before we start talking new taxes or entitlement reforms we gotta get our house in order.” Sports figures too: “We had a great practice today but, before we think about competing for the division title, we gotta get our house in order.” Celebrities aren’t immune from invoking it either: “Like, I totally want to hit the party scene again but, since I like just got out of rehab, I like think I need to lay low and totally like get my house in order first. One more thing…do you know where I can get a drink around here?” Okay. Maybe that last one’s a stretch.
The core FPM processes are:
For more best practices visit my site at http://provenpractices.wordpress.com
Tim O'Bryan 270001NMX7 email@example.com Tags:  ibmcognos cognoscontroller provenpractices businessanalyticstoday businessanalytics timobryan 345 Visits
If asked to describe their financial consolidation process most corporate finance teams might spit out a few unprintable adjectives as they attempt to explain their effectiveness in harnessing all of the moving parts in this bear of a process. The primary issue they have is managing all of the inputs and one-offs throughout each step, making it difficult to track or audit it because of their lack of transparency, visibility and ultimate control over it. Riddled with disconnected systems that have major control risks requiring manual intervention and maintenance (Think spreadsheet-based systems) and other standalone technologies lacking any audit control make it an administrative nightmare. Financial consolidation isn’t a stationary target either given the ever-growing mountain of new regulations, report filings, and financial governance procedures required to which they need to adapt. (Think Dodd-Frank, IFRS, and XBRL to name a few.)As I mentioned in another blog post, “Close, Consolidate, Report & File: Automation & Embedded Controls Else It’s A House of Cards“, there’s so much to manage throughout the FInancial Consolidation process including manual inputs, offline adjustments, in-process reports, and stakeholders to keep a handle on it all. We’re not talking about nice-to-have reports here. We’re talking about reported Balance Sheets, Cash Flow Statements, 10Ks and 10Qs and other monthly, quarterly, and annual reports that go to shareholders, The Street — and, oh, by the way, these results are the primary drivers of business decisions being made across the organization to run the business. Hard to believe more organizations haven’t adopted an end-to-end solution to produce credible, timely, and reliable results while allowing finance teams to really focus on the important stuff like analyzing the results, not compiling them.
Tim O'Bryan 270001NMX7 firstname.lastname@example.org Tags:  cognosfsr timobryan businessanalytics businessanalyticstoday cognos 359 Visits
When I think about the capabilities of our IBM Cognos FSR solution it reminds me a lot of Aesop’s fable about the Ant and the Grasshopper. It’s about preparing today for more challenging times. If you don’t know this fable I’ve included it below as it’s so short it’s not worth paraphrasing. The story goes like this:
(For more Business Analytics blogs from Tim O'Bryan, please go to: http://ibm-business-analytics.com).
We're heading into the home stretch before Information On Demand (you have registered, right?), so I'm sharing a few of my favorite blog posts to help frame the discussions at the premier conference for IT and business professionals. Feel free to bookmark, read and add to your own social media reading list. Also, feel free to comment on or disagree with these posts right here, as each is bound to raise a hackle or two.
1. GOOD Magazine: The Data Issue: GOOD calls itself an "integrated media platform for people who want to live well and do good" and "a company and community for the people, businesses, and NGOs moving the world forward." Its latest issue looks at areas of our lives that aren't typically associated with (or driven by) data and finds some surprising insights. Yes, data is everywhere and facts can be comforting, but when it comes to our own lives, it's the questions we ask ourselves that lead to true wisdom. As illustrator Andrew Kuo writes: When we search the numbers, we find reflections of ourselves, glimmers of the world we live in and the lives we lead. We may learn immense amounts from this data, but make no mistake: Our search is what gives it meaning. In The Information Arms Race, William Wheeler explores the increasingly effective use of microtargeting in political campaigns, as well as the repercussions for democratic debate. The issue is also chock full of of cheeky infographics and gets meta on data with a chart entitled "Which kinds of people like which charts?"
2. Numerati Baseball = Rope-a-dope, by Stephen Baker: Is winning boring? I suppose entertaining the fans is a secondary concern when you're buried beneath "fifty feet of crap," as Oakland As' manager Billy Beane (Brad Pitt) observes in the movie trailer below. Still, Baker (author of The Numerati, chronicler of the Watson story and a baseball fan himself) considers the implications of the analytical approach on the length of the average baseball game and its effect on the effect on viewer patience: I love baseball, and I defend it stoutly against all those who complain that it's boring. But anyone who can sit through a Yankees-Red Sox game without a fast-forward button deserves some kind of medal ... For someone who is not passionate about the Yankees or the Red Sox, it was torturous. The game dragged on for 4 hours and 21 minutes. What's your take on taking a lot more walks? Moneyball pioneer Billy Beane and Moneyball author Michael Lewis will share share their take on the analytical approach to wining an unfair game when they share the stage as our keynote speakers.
3. Desert Island Datasets: Over on The Guardian's Datablog, Charles Arthur plays with the "Desert Island Album" concept to datasets by asking, "Which set of open data would you like to get from the UK government so as to have the maximum impact on the open data movement?" Arthur's goal is twofold: first, to protect and advance the open data movement overall, and second, to focus on those datasets that can make the biggest improvement in public policy: I recently met some people inside government who are trying to push the open data idea, of getting anonymised, publicly-collected data out there for developers to be able to build applications which will have both financial and societal benefits. It is taken seriously at the top levels of government; they aren't just paying it lip service. The problem though is that there's only so much time available to anyone to push the agenda through.
Bonus feature: IOD Housekeeping Details
A few details to keep in mind as you prep your week and pack your bags:
Tim O'Bryan 270001NMX7 email@example.com Tags:  timobryan businessanalytics businessanalyticstoday ibmcognos 269 Visits
Whoever said, “you can’t take it with you” definitely wasn’t thinking of IBM Cognos Mobile.
Tim O'Bryan 270001NMX7 firstname.lastname@example.org Tags:  profitability-optimizatio... businessanalytics timobryan businessanalyticstoday 237 Visits
Yes, IBM Cognos TM1 is like a Swiss Army knife – it has capabilities to do a lot of different things extremely well. One of the practices it’s being utilized for with incredible results is an emerging, but no so well understood, practice entitled profitability modeling and optimization. The power of IBM Cognos TM1 is the primary reason this practice has emerged. Companies adopting IBM Cognos TM1 as the technology of choice for this practice is the primary reason they’re thriving moving from ‘also rans’ to industry leaders. Still, this post is less about IBM Cognos TM1 and more about the process, Profitability Modeling & Optimization.
When talking about profitability modeling & optimization it’s more illustrative to start with the ever-important strategic element of price. It’s that set amount that can make or break a product or service or even the company’s acceptance by the marketplace. Price, of course, is most often set by what the market is willing to pay for this product or service. A lot of factors can go into your pricing strategy including things like the brand equity and image of the product or service (Think Tiffany’s), expected sales volumes (Think economies of scale), competitive factors (Only game in town?), or if it’s a new category being created. Of course, we know that companies profit by selling this product or service at a margin greater than its cost. Then, a profit is turned.
Now, what you do with those profits is then up to the company to decide. Do you reinvest those profits? Most do. If so, how do you allocate them across the business for the most profitable return? Maybe you even want to release some of them to shareholders via dividends? What about making acquisitions? These are important decisions to make based on what the future needs of the business are. This is a good problem to have.
Enter Profitability & Optimization.
To sustain competitiveness in the marketplace organizations must be able to model their profitability to maximize profits and optimize the components to profitability that incur costs. Most companies are performing some form of profitability and optimization activities everyday. The BIG difference is that some are much better at it than others. Why is this? What separates them from the others? It comes down to the best-in-class organizations investing in their people, the related processes, and a capable technology.
Ask yourself the following questions:
Now, how would your colleagues in Sales, HR, Marketing, IT, Operations, etc. answer these questions?
It’s critical to know that every area of the business is looking at some element of profitability. Running scenarios, what if, and profitability analysis with a 360-degree viewpoint of the data is the lifeblood of value-added analysis for making smarter decisions which, if done effectively, translates into better corporate performance. Without better insight and understanding of the information derived from profitability modeling and optimization, business users are forced to go on their gut and/or out of date information — or, worse, they’re waiting until they do get the information they need before they can act…tick, tick, tick. Time is money.
If you and the rest of the workforce don’t have this information at your fingertips don’t fret because you’re not alone. However, things are changing. Companies today are investing more and more into this practice area as technology has caught up in a way that’s allowing for massive data volumes to be sliced-and-diced in seconds for this very purpose.
Now is the time to act. The technology is there so I’d ask why isn’t your organization there too. Hustle up. I know a lot of companies that are doing this practice very well – and some that aren’t unfortunately. They’re the ones looking to leverage IBM Cognos TM1 to put them on the path to better PM&O.
If you want to know more about this subject feel free to email me to discuss further.
Click here to see more resources on IBM Cognos TM1.
More blog entries @ http://ibm-business-analytics.com
'Hey guys, it's ready!'
Anyone remember The Frantics?
Am I dating myself?
Don't answer that.
Back in the '80s,The Frantics were Canada's answer to Monty Python. One of their recurring bits involved Paul Chato (the geeky one) inventing a new video game. Like Kramer on Seinfeld, he'd burst into the room unannounced and shout, 'Hey guys, it's ready!' Upon hearing the news, the other guys would excitedly jump around the room in a stop-motion homage to 'Neighbors,' the famous 1952 NFB short film by Norman McLaren.
It was very Canadian and very funny.
All the social buzz on a single page
The new Social Media Aggregator (SMA) for Information On Demand went live yesterday and while it's not a game, Canadian or all that funny, I'm still as excited about it as Paul Chato was when he took the wraps off Booger Barrage.
For you, the SMA makes it easier than ever to share in the excitement of Information On Demand. It pulls in conference tweets, blog posts and photos and presents them on a single page. So, if you're using any or all of the conference tags: #iod11, #baforum, #imforum or #IBMECM, they'll show up here. The SMA will also provide live streaming video of the morning general sessions, plus executive keynotes and interviews from the EXPO floor courtesy of Scott and Todd.
Because The Frantics were popular in the 80s, Paul's games looked like the ones you played on your Atari 2600. Because this is 2011, the IOD SMA looks a little better:
Smarter Software means smarter aggregators
What's more, the SMA scans all that content to build real-time tag clouds of trending topics and highlights the conversation leaders who are tweeting and blogging up a storm. Last year, that honor went to raving IBM Cognos 10 fan Cedric deVroey. The last time I checked this year, there was quite the duel shaping up between Christoph Papenfuss and Fraser Anderson. Now that the SMA is out there for the world to enjoy, no doubt we'll see perspectives from outside the firewall in there as well.
This SMA is the latest instance of IBM's new way of bringing a social dimension to a growing number of its large initiatives such as Smarter Commerce, Social Business and the Corporate Service Corps. Mashable is pretty sweet on them as well, naming the one we used for Lotusphere one of '7 Twitter Campaigns to Learn From.'
Get on board
The SMA pulls in Tweets automatically, but if you plan on blogging you'll need to create an IBM profile or use the one you already have. From there it's simply a matter of copying and pasting a few feeds. Add any of the tags above in the body of your blog post and it will be picked up automatically to be shared with an audience of thousands. The added bonus of registering is that once you've created your profile you can contribute to any aggregator in the IBM universe.
IOD is is the biggest conference in the IBM software galaxy. Last year more than 10,000 said 'Viva Las Vegas' (a new record) and this year we're expecting even more. With that many people and that much technology coming into contact with each other I foresee no shortage of opinions, insights and - because this is Vegas - maybe the odd joke or two. So, I'll be keeping a close eye on the aggregator throughout the conference to highlight the trending topics, congratulate the conversation leaders and maybe - just maybe - throw in a poll or two. The buzz is brewing for IOD11 and the SMA is your best place to participate and take it all in. Why not get started now?
The end-of-day update
I couldn't find the Frantics clip in question, so instead I can offer this cool animation. It was also made by Norman McLaren, who could make numbers dance as well as people. Enjoy!
There's a fascinating article in the latest McKinsey Quarterly - one I'd deem essential reading before you head down to Vegas for Information On Demand 2011.
You have registered, right?
It's called The Second Economy and it's written by W. Brian Arthur, an economist, author, a visiting researcher with the Intelligent System Lab at the Palo Alto Research Center (PARC) and an external professor at the Santa Fe Institute.
The full article (including PDF download) is available here, and I've provided some excerpts below.
"Vast, automatic, invisible"
Arthur makes the argument that digitization is creating a "second" economy that's vast, automatic and invisible. In turn, this economy is driving the biggest change to our world since the Industrial Revolution:
In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in-between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.
A Second Economy on a Smarter Planet?
As I read through the piece I was struck by how closely Arthur's Second Economy mirrors the attributes of a Smarter Planet - that is, one that's increasingly instrumented, interconnected and intelligent. Take, for example, the dramatic transformations we've seen in air travel:
Twenty years ago, if you went into an airport you would walk up to a counter and present paper tickets to a human being. That person would register you on a computer, notify the flight you’d arrived, and check your luggage in. All this was done by humans. Today, you walk into an airport and look for a machine. You put in a frequent-flier card or credit card, and it takes just three or four seconds to get back a boarding pass, receipt, and luggage tag. What interests me is what happens in those three or four seconds. The moment the card goes in, you are starting a huge conversation conducted entirely among machines. Once your name is recognized, computers are checking your flight status with the airlines, your past travel history, your name with the TSA1 (and possibly also with the National Security Agency). They are checking your seat choice, your frequent-flier status, and your access to lounges. This unseen, underground conversation is happening among multiple servers talking to other servers, talking to satellites that are talking to computers (possibly in London, where you’re going), and checking with passport control, with foreign immigration, with ongoing connecting flights. And to make sure the aircraft’s weight distribution is fine, the machines are also starting to adjust the passenger count and seating according to whether the fuselage is loaded more heavily at the front or back. Is this the biggest change since the Industrial Revolution? Well, without sticking my neck out too much, I believe so. In fact, I think it may well be the biggest change ever in the economy. It is a deep qualitative change that is bringing intelligent, automatic response to the economy. There’s no upper limit to this, no place where it has to end. [...] I think that for the rest of this century, barring wars and pestilence, a lot of the story will be the building out of this second economy, an unseen underground economy that basically is giving us intelligent reactions to what we do above the ground.Who benefits?
An economist and "pioneer in the science of complexity," Arthur also posits on the impact of this Second Economy on the nature of work:
The second economy will certainly be the engine of growth and the provider of prosperity for the rest of this century and beyond, but it may not provide jobs, so there may be prosperity without full access for many. This suggests to me that the main challenge of the economy is shifting from producing prosperity to distributing prosperity. [...] For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking—fewer of us in the future may have white-collar business process jobs—and we face a problem.What's your role?
As the architects of your organization's own information networks, I'd argue that you have a direct hand in building this Second Economy. As the largest conference in the IBM Software universe, I'd also argue that Information On Demand is the ideal forum to discover these ideas and discuss the ways you can harness them to drive better outcomes on all fronts.
What do you think?
Leave a comment below, tweet using #IOD11 or visit the IOD Social Media Aggregator to join the discussion.
Tim O'Bryan 270001NMX7 email@example.com Tags:  timobryan businessanalytics businessanalyticstoday provenpractices 391 Visits
Imagine entering the cockpit of a modern jet airplane and seeing only a single instrument there. How would you feel about boarding the plane after the following conversation with the pilot?
Q: I’m surprised to see you operating a plane with only a single instrument. What does it measure?
Q: That’s good. Airspeed certainly seems important. But what about altitude. Wouldn’t an altimeter be helpful?
We suspect you wouldn’t board the plane after this discussion. Even if the pilot did an exceptional job on air speed, you would be worried about colliding with tall mountains or running low on fuel. Clearly, such a conversation is a fantasy since no pilot would dream of guiding a complex vehicle like a jet airplane through crowded airspace.
This is an often cited story by many business strategists and other management prognosticators which I will attribute to Drs. David Norton and Robert Kaplan, pioneers of the Balanced Scorecard. It’s intended to reflect how critical the actual indicators are that we setup for not only pilots but also the indicators by which you establish for your entire workforce because these indicators will serve as the guiding force behind their decision-making.
Why is this so important? Well, many reasons starting with the business environment has substantially changed where no longer can a company operate rudderless without a core set of metrics to steer each of its employees individually and as a collective unit in the right direction. That right direction is the enterprise strategy. The speed at which these decisions are being made seem to have increased exponentially in just in the past 5 years. The days of top-down, command-and-control authority over decision-making are far from over in deference to a more nimble, decentralized execution hierarchy intended on keeping pace with the velocity of the related competition and customer expectations. The need for getting relevant and actionable information to the business users has never been more pronounced than we’re seeing today. If you can’t react fast enough to the market realities your customers will go elsewhere. We live in a world where product or brand loyalties are becoming more and more a thing of the past. It’s about execution. Good execution is about making smarter, more informed decisions that support the organization’s goals.
These decisions being made are happening across all levels, geographies, and functional areas of the business everyday. For this post I want to zero in on the first question asked which falls under measuring and monitoring the business. This question is, how are we doing?
Sure, the executive suite is constantly measuring and monitoring overall business performance to ensure the company is on track to meet its strategic targets. In addition, the function leads in marketing, sales, finance, HR, and development all the way down to the individual contributor levels of the organization are measuring and monitoring the performance of their area of the business too. But how does everyone know they’re doing the right things at all times? What are their real priorities helping the organization achieve its goals? Is it guesswork? Is it trust-based that the entire workforce is going to naturally make the right decisions supporting top-line goals? How can we be so sure?
This fictional story referenced at the beginning of this post is really about measuring and monitoring – not an aircraft – but your business thru a tool called a scorecard. There are personal, departmental, and enterprise scorecards. A scorecard includes the key performance indicators, or KPIs, for which, in the case of a personal scorecard, an employee is responsible which, if these KPIs are correctly defined, would include measurements that, when looked at in aggregate, support the enterprise’s top-line strategic goals and objectives. Inevitably, there will be shared targets for some of the KPIs in a personal scorecard either within a specific functional area of the business (Think Marketing Director/Marketing Associate having similar campaign targets) or as shared KPIs across functional groups like marketing, sales, procurement, and development/manufacturing for something like overall corporate sales targets. To illustrate what I mean, if the organization has a revenue target of 15% annual growth each of these functions might also have the 15% target in their KPIs. Of course alone none of these groups is solely responsible for achieving that total growth target but this enterprise target is still one of their KPI’s. This shared goals can incent these groups to work more closely together given that it’s mutually beneficial for these teams to work together because they’re all needed to make this corporate goal. Also, there are typically individual KPIs for their own controllable element of that 15% growth figure that might apply. Sales will play a role in this 15% growth target by needing to make actual sales to existing and new customers accounts; Marketing is also integral because they will have to generate enough pipeline to contribute to those sales figures; Procurement will need to make sure the appropriate amount of labor, materials and supplies are available to produce enough product; and, Development/Manufacturing will need to have enough finished product ready for shipping in time to meet these customer demands. Each of these functions and the people working within these functions would also have their own more specific KPIs that outline what their required contribution is to achieve this top-line revenue growth goal that will typically be measured within the respective functions too. Make sense?
The actual KPIs – typically there’s about 6-10 for each individual – are critical because they will define the actions taken by the individual for which they’re responsible. The ultimate alignment via scorecards composed of KPIs across these business groups, departments, divisions, business units, etc. is the embodiment of what we call a company’s strategy execution framework.
Harvard Business School having done a study on this framework found that, “a 35% increase in Strategy Execution leads to 30% gain in shareholder value”. That’s a pretty strong argument for at least taking a harder look at it.
How do you deploy such a framework, you ask? Well, in theory it’s very simple. You just translate the business strategy and its related goals into a set of performance indicators that outline the targets for which each department and employee within each department are responsible and away you go, right? Yes, I know. It sounds easy in theory. But, in practice it’s a little more work.
The key is working top-down with each business and support unit area to translate their contribution towards meeting these higher level targets so that these lower-level, cascaded measurements, or KPIs, will, when rolled up in total, directly tie to the top-level enterprise’s strategic goals. This ensures proper alignment of the organization while providing an ongoing set of metrics by which the workforce can measure themselves.
Even more important in defining the right KPIs is the understanding that whatever the indicators are, this will determine the individual’s behavior so take care as you define these. Something else that makes this framework so effective is that it makes it that much easier to reset the workforce when those top-level strategies change. the infrastructure is in place to restructure the scorecards. This allows the company to adapt more quickly.
Think about deploying such a framework for your organization. The best incentive I can give you for taking on this effort is that going through the KPI definition process for each set of scorecards it forces discussions across functions, within departments and at the executive level that will expose how achievable these targets really are with the current resources in place today and who is ultimately responsible for what. This is just about the most important exercise I think a company can go through to make sure it’s not setting itself up for failure because its strategy isn’t attainable given the resources currently in place. Once this KPI definition process is complete and everyone knows who’s doing what and where the synergies lye it’s all about execution. This framework sets companies up to execute well because they’ve already identified their needs and resources at their disposal and now it’s a matter of delivering. It’s go time.
If done right this will be the outcome for your organization:
More coming on this subject. Stay tuned. In my next post I’ll tell you some of the best practices in defining the right KPIs for personal scorecards.
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