I have just been reading Robert Peston’s book Who Runs Britain? I recognised many parallels with Who Runs Business? With the Internet expanding the voice of shareholders across blogs, news sites and forums, is logical decision making being crowded out by shareholder pandering to silence the hounds.

Just how much time is spent in business fluffing a shield around reality to reduce it to a something more readily digestible to the shareholder. Have we gone too far in giving the shareholder more power than the CEO and his/her executive team?

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Traditional command and control leadership models are outdated, and are evolving towards a more collaborative and process-oriented culture. The same culture that is underpinning the evolution of the Cloud. BI tools provide the market transparency to identify ‘triggers’ and evidence-based decision making support needed to ensure more appropriate and timely decision making, and the Cloud is providing the rapid adaptability needed to deploy new tools needed for the rapid deployment of new strategies.

Businesses are continuously being forced to revisit three critical strategic questions:

1. What business are we really in?
2. What triggering signals should we be measuring?
3. Do we have the business tools to plan investments and operational activities with the lowest possible risk and enable us to react quickly to the triggering signals?

And yet transformational system must also incorporate the vital elements of control – visibility, compliance and governance.

As businesses realize that importance of the information value chain to their needed agility, capturing the collective wisdom of their organizations and markets is a core business capability. Yet for many, their enterprise systems are not capable of supporting business intelligence systems.

The value of BI relies on intelligence being captured and automatically applied at key decision points. Operational BI is the key driver to optimizing business processes that enable the best possible response to customer needs, often before a customer is even aware of that need. In turn, that drives the productivity of the business.

Operational decisions today must be based on real-time insight, often the result of analysis of a complex set of events, any one of which is capable of altering an existing decision making model. Thus, decisions have become fluid, and are only ‘true’ for moments in time.

Before the latest advanced business intelligence tools, business leaders were reliant on information systems built on transactional data models. In many cases, due to the lesser speed and complexity of business, this provided adequate decision support. Not so today.

 Business today must have the ability to rapidly change processes and react to events without delay and with minimal resources. With the web driving vast change in the blink of an eye, change, adaptability and visibility are now key drivers to business success.

The typical suite of business applications – ERP (Enterprise Resource Planning), SCM (Supply Chain Management), CRM (Customer Relationship Management), HRM (Human Resources Management), PLM (Product Lifecycle Management), MRO (Maintenance,

Repair and Operations), MES (Manufacturing Execution Systems), have proven solid infrastructures to run global organizations, but are inadequate in design and processing capability to perform the real time analytics needed to support these business drivers. Nor, are the infrastructures that support them capable of supporting the needs of BI tools.

Thus, just as business drivers have changed, so too must IT drivers to support the business. One of the major constraints of implementing and deploying BI databases,  applications and tools has been the lack of capability to readily extract data from numerous disparate data sources, aggregate it and format it to support real time analytics.

Cloud computing changes that!. Whilst cloud doesn’t deal with the data issues, the virtualization inherent in cloud architectures makes a significant contribution. Accessing transactional records are a simple query, requiring little in the way of processing power. However, the large complex queries common to analytics requires bursts of processing power necessitating instant scalability.

New sets of metrics [Key Performance Indicators] must extend beyond the enterprise walls to capture social and market drivers not previously in existence, adding further complexity to the data streams that must support business decisions.

As business leaders make new kinds of strategic and operational decisions, CIO’s in turn are faced with the new challenges to change and adapt corporate technology at the same pace.

The disconnect between the agility needed by the business and the agility inherent in enterprise platforms has been a major constraint in business success and growth. Cloud computing provides that agility faster and easier than ever envisaged even a few years ago. This has elevated IT out of the basement and into the boardroom as a competitive differentiator that will determine which companies are the winners emerging from the current recession. The economic climate, coupled with this new technology capability offers a seldom seen environment for previously struggling companies to take leadership roles in their industries, leap-frogging over less agile incumbents.

One trailing constraint continues to cause me some concern, executives who still struggle with new technology, many using more than the basic functions of desktop applications. Coupled with the poor representation of CIO’s in board membership, and the problem is obvious. How can business leaders give directions to their CIO’s when they no longer fully comprehend the environment in which they are operating and the resources that will keep them competitive. We have moved beyond the era where cost reductions will significantly impact business competitiveness. Today it is about building deeper customer relationships to drive more revenue at higher profit margins. An entirely possible goal to meet – with the right technology. Without it, it just won’t happen, or at least it won’t happen fast enough to make a difference. CEO’s and COO’s are tasked with embarking on their own journey of discovery to move beyond the parameters of resource allocations, and into one that is driven by process and predictive insight. The Cloud will help to remove the complexity of technology and enable business leaders to think more in terms of strategic output than servers and desktop systems.

As the business and IT move closer together we can expect to see new terms such as process oriented clouds, intelligent clouds, functional clouds etc beginning to emerge as bundling of computing capability, application suites and data needs are created. This will emulate the industry vertical bundling of software packages to provide complete plug and play solutions, but in the cloud it will be play and pay.

I for one, who has worked alone in the trench between IT and the business for many years am looking forward to the new B-IT collaborative model – where sales, distribution, innovation, financial, logistics, talent and manufacturing processes will be based on infrastructure which exists in a virtual context. Where applications and data will connect to others through heterogeneous structured and non-structured environments.

Cloud provides an ideal point of connection between both individuals and processes that require rapid online connections to other processes without invasive techniques. It is a place where business people can iteratively describe what issues they are tackling and speak a common language with their IT counterparts in a setting which can deliver the constant innovation, without having to wait for complex and slow development techniques.

The above is an excerpt from my upcoming book “Getting to Cloud – The Essential Guide to Decisions About Cloud Computing” – by Gail La Grouw

A KPI is a key measure that is linked directly to a strategic outcome. With a fast moving market, strategies can change significantly more often than just ten years ago. This means that KPI must also change and be monitored using a transparent performance management system. The key in selecting and filtering KPI are the decisions that the organization makes, and which of those decisions are most critical at any one time.

There are effectively three kinds of decisions made in any organization:

1. Strategic decisions – these are the small group of ‘big’ decisions, made by the small executive group, that involve big investments, with significant outcomes. For instance, developing a new product line to attract a new market or acquiring a competitor.
2. Tactical decisions – those decisions made by a larger, but still contained group of managers that determine exactly how the strategic decision will be put into play, in terms of approach and offering. For instance, a product manager making decisions around a pricing schedule and launch bonuses relating to the new product line.
3. Operational decisions – the business decisions made by many people, on a daily basis, that have a smaller business impact when measured independently, but when aggregated with multiple operational decisions add up to a lot of value. For instance, a sales person may offer an additional discount to add leverage to a significant account to sign up to the new product.

Using the above example, the new product group, the executives will be making strategic decisions around meeting EBIT targets, the product manager will have KPI focused around profitability and portfolio contribution to EBIT, and the sales person will be tracking to sales targets related to account revenue and profit. If this discount was offered to his entire account portfolio, the impact on profitability and EBIT contribution could be significant, and could drive decreased performance to KPI up through operational and strategic levels. And this is where the critical missing component comes in.

KPI’s must have business rules attached. Business rules help to define how performance to a KPI must be implemented, and will in this case restrict the offering of additional discounts to drive revenue at the expense of profit. Implementing KPI without business rules definition is a common occurrence in businesses, and accounts for many instances of targets not being met. This is the reason that The Logical Organization focuses very much on decision making when defining its business intelligence strategy.

We start making judgement decisions from the day we are born, taking in all the environmental, comfort and influence factors around us. We get comfortable with this style of decision making, and oftentimes overlook just what and who is influencing our decision making.
Every person has their own filters, biases and personal agendas – it’s human nature and for most, a subconscious participation in decision making. With less time for making decisions today, and even less time to make and correct mistakes, leaders need to use more reliable frameworks fo making complex decisions. Regardless of the tools one uses, not all decisions will have perfect outcomes. But leaders can certainly tip the odds to their favor using tools such as Business Intelligence Analytics.

Since leaders are judged largely by the quality of the decisions they make, it makes sense to use all the data and tools available today to drive that quality higher. Decision quality is measured by speed, considerations of all drivers and stakeholders, and the impact of the outcome on the strategic goals of the business. And, just as important today, decisions need to be transparent for the protection of both the business and the leader.

If you are still making decisions based on judgement, you are tempting fate in ways that have repercussions on not only the business, but also yourself and your family. The best decision any leader can make right now is to protect all stakeholders by implementing a sound analytical application from which reliable, relevant and real time information can be accessed and applied to problem solving and opportunity conversion. Logic driven decisions support evidence based management. Not only will your decisions be smarter – they will be auditable.

On the positive side, the report suggests that although cloud represents a ‘great opportunity to exploit unprecedented IT resources it has a number of obstacles to overcome”, ten according to the report.

In the report ‘Above the Clouds: A Berkeley View of Cloud Computing‘ the group ,which works in the Reliable Adaptive Distributed Systems Laboratory funded by companies such as Google, Microsoft, IBM and Sun, argued that “the construction and operation of extremely large-scale, commodity-computer datacenters at low-cost locations was the key necessary enabler of Cloud Computing”.

In respect of service provision, the paper defines different types of cloud computing providers, ranging from the infrastructure end typical of Amazon EC2 to the application-specific services such as those provided by Google AppEngine. Providers must also do their bit to ensure availability by accessing massive bandwidth to insulate against the impact of DDoS attacks. And some good news. For those who fear that commoditising computing power will lead to a low-margin business model, the Berkeley team disagrees, stating “The apparently low costs offered to cloud users may still be highly profitable for cloud providers.”

Not a lot to add to that we already know. But they did highlight that “vendors need to rethink the way they build their products”. In particular they referred to the ability to both scale up and DOWN to meet the changing needs of users, and that service plans must also accomodate short term needs for computing power.

The hardware needs must also be scaled up, with larger racks, energy efficiencent servers and flash memory.

A key enabler of multi cloud computing vendors will be the development of a standard set of application APIs – it doesn’t matter what the technology, standardisation issues always rise to the top and act as a major constraint.

The 10 obstacles to cloud computing:

1. Availability of service
2. Data lock-in
3. Data confidentiality and auditability
4. Data transfer bottlenecks
5. Performance unpredictability
6. Scalable storage
7. Bugs in large distributed systems
8. Scaling quickly – up and down
9. Reputation fate sharing – an interesting term the report elaborates on
10. Software licensing

Not a lot the industry is not already aware of, however, the report also provides some good suggestions for customers of cloud computing, such as procuring services with several cloud providers to ensure service availability.

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Most of us do not look at decision making as a distinct process, with very distinct pitfalls and very distinct remedies. In its simplest form, the decision process has four steps:

Key Takeaways

Frame – Solve the right problem, by framing the issue correctly. Most people solve the wrong problem – makes it difficult to find a good solution.  Frames are mental constructions that reduce the problem to its core essence. This often requires that you step away from this issue and determine whether what you are focusing on, is what you really need a decision on. Different people see a different reason. At this stage we must determine whether the frame is correct for the decision that needs to be made.

Investigate – Once you have a frame, then look at the quality of the intelligence and data. It then challenges those involved as to whether it confirms or challenges our beliefs.

Negotiate - Decisions often requires tradeoffs, so you need to understand the various parts of the solution, the cost of each part and the benefits gained from it.

Learn – how this decision can benefit you and how you can leverage the most from it.

Good decision making is about balancing the resources and effort on each of these four steps

The key is in making this information reusable by multiple parts of the business, hence increasing the return on time invested in gathering it. It must also be available in the format most suited to various business users.

But information sharing isn’t just a one way event. Also now critical in selling more complex solutions, such as software products, is sharing information with the customer before the solution presentation stage of the sales cycle. This is not information about your product. It’s information about how to use a product such as yours in the customers company and what benefits will result. Customers have ready access to information online as to the different technologies available, but the real information that makes the difference is in how the solution can be used in their business. Most business decision makers are faced with rigorous business case requirements for sign off of most technology solutions, and seek greater understanding of how they can increase they can gain wider business support and demonstrate a short payback period and higher return on investment. They often have limited insight into how to apply a solution such as yours across the various parts of the business, so help them by providing access to seminars, webinars, videos, audio, articles and blogs – informational media that will build the value proposition in their minds and help them gain widespread business support to buy your product. These events are both educational and promotional rather than highly product focused selling events. Consider them edumotional.

Rather than helping your customer climb over the many barriers to closing a sale, help them remove the barriers instead. If you want a detailed insight into how to use edumotional selling, watch out for the release of my next book which focuses on analytics and information based selling.

When I am investing in real estate, one of the demographic markers I use for the area is gained by visiting the local supermarket and checking out what wines they stock, and the balance between different price points. So I was intrigued as to what wine intelligence was all about.

Clicking through to the site www.wineintelligence.com I found an array of interesting market data extracted from Vinitrac Global consumer survey, due for launch in March 2009. Insights such as:

“lot of turbulence in the middle of the Wine Wall ($4-$10)”.

“Buyers really are trading down from $7.99 to $5.99″

Following 9/11, it was proposed that wine sales were “recession proof”. The New York Times recently reported that consumers are trading down, but buying more. The argument given was that there was “even more of a reason to drink,” ….I’m with you on that one buddy! Whilst the price dropped 17%, the volume increased 15%. But what about the impact on the producer side. Since the cost of distributing a $5.99 wine is not $2 less than a $7.99 wine, trading down has a big effect on producer and retailer profits…..so one can expect revenues and profits to take a hammering. In markets such as China, where wine is still considered a luxury item, it is more easily deleted off the shopping list without substitution.

All this data is harvested from grocery store loyalty card programs…there is a reason they are willing to give you all those airpoints and free homewares. The article represents a great example of how important it is to understanding the desires and thought processes behind consumer behaviour. In any market condition!! It also illustrates how modelling a current scenario, aligning to common elements in past scenarios can help companies predict with reasonable certainty how the market will react to certain products and services.

Read the full article http://www.wineintelligence.com/

1. Ignore It,
2. Accept Defeat, or
3. Take Control

And the way to take control is to put the customer back into the center of your business

“Act on every lead, Win every deal, Keep every customer.”

It is easy for businesses to seek complex solutions to simple problems, and whilst the magnitude of the problem today is significant, the best response is quite simple. If your business does not have the tools to tell you how well you are performing in each of these three key areas, how do you expect to perform better than your competitors. BI is about collecting data on a continuous basis so you can convert it hour by hour into usable, actionable information. If you can not see the change in state of your business in real time, you are going to find it very difficult to make the best of the current market environment. I have a favorite saying….If its not in sight, it’s not insight!

Even large, cumbersome businesses are experiencing remarkable improvements from using BI solutions:

Sales Pipleline – 172% increase

Sales Growth – 70% increase

Team Productivity – 20% increase

It’s no longer a matter of not being able to afford CRM/BI tools – it’s a matter of not being able to afford to NOT have them.

So don’t let the current gloom beat your business – get data, get insight, get ahead….Take control!

Watch out for my next blog which will include a short audio on exactly how BI provides competitive advantage in EVERY part of your business.

In spite of thinking you have the ‘memory of an elephant’, the brain knows otherwise.

Long term memory resides in an area of the brain called the Hypocampus. Alcohol interferes with forming long term memory, as does being relaxed. At the opposite end of the scale, fear strengthens memory. This is why we remember events connected to strong emotions. This is because emotions use the same part of the brain as long term memory.

To remember something long term, the brain must make chemical pathways or connections between brain cells. And it helps when those brain cells co-exist in the same part of the brain. Eye witness accounts are typically very unreliable, despite the person truly believing they are representing an accurate account. For instance:

• Color is inaccurate
• The brain adds logically expected items
• Tunnel vision is common – don’t see beyond the zone of activity related to stress. This disturbs recall outside a few details

For these reasons, it is not difficult for a skilled person to change people memories. Lawyers use the minds infallibility all the time to confuse and trick witnesses – at times resulting in prosecution of the innocent and freedom of the guilty.

Juries are very convinced by eye witnesses. Studies have shown that 54% of jurors swing their decision between guilty and not guilty based on eye witness accounts that are ‘guided’ by the lawyer’s questions. It has also been found that 95% of convictions overturned by DNA were originally convicted based on eye witnesses accounts.

So before you start getting defensive about being the exception to the rule, and priding yourself on your excellent memory, just remember, data-driven evidence does not lie.