deal architect

The Real Deal: Damon Auer and Bob Glynn on “Rigid Agility or Agile Rigidity”

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Damon Auer, Partner at Tribridge and Bob Glynn, co-founder of Affinity Inc, two high-class boutique consulting/systems integration firms. I have worked with Damon on a number of technology strategy projects and it’s always a joy to see his creative mind solving unsolvable problems -  like the seeming oxymoron of Agile development in a world of Rigid methodologies.

“Nothing like starting a story with an oxymoron.  But this one’s appropriate.

Our firms partnered 2 years ago to help a global Healthcare and Life Sciences company implement a new system to better support Configuring, Pricing, Quoting, and Processing Orders around the world.  The software to enable this functionality had already been determined to be Siebel (now part of Oracle). 

The initial plan was to build, validate, and deploy the system to about 7,000 users over a 24-month period using a very rigid Waterfall methodology.  This Waterfall methodology had been refined over a period of years at the company and was deeply integrated with Quality processes to insure that any system that goes live meets strict FDA systems validation guidelines. 

It was a good plan but . . .

3 months into the project things changed.  A lingering lawsuit took a turn for the worse and the company had only 12 months to get the new system live or face tens of millions of dollars of legal penalties.

We huddled with company Program Leadership and realized our current (tested but rigid) waterfall method would never get us across the goal line in time.  So we decided to immediately chuck the Program Plan, break our team into “Scrums”, enlist “Product Owners”, and “Sprint” as hard and fast as we could to meet the new time challenge.

This approach created a whole new set of challenges including immediate skepticism about our ability to execute an Agile project while dependent on 26 other teams (in 14 countries) still executing the classic Waterfall method.  And this was a packaged system (Siebel) not a custom development project – how was that going to work?  And how would we ever get the system documented thoroughly enough to meet FDA validation requirements?  And what the hell is a Scrum and a Sprint and a Product Backlog?  Oh yeah, and how will we take the consultant’s (us) Fixed Fee contract for implementing the system and fit it into a new schedule with a different set of requirements?

All great questions but we decided we didn’t possibly have time to answer them to everyone’s satisfaction – so we started the first Sprint.

We learned as we went.  Our skeptics continued their skepticism.  Until we went live with a system designed to meet businesses requirements 12 months later.  Then we were heroes. 

What we learned was: (1) the value of Agile methods in driving User ownership delivered systems; (2) the granular accountability (and empowerment) that Agile creates; (3) you can Sprint until the system is functioning then retrospectively validate the system to meet documentation and regulatory requirements; (4) Agile works with packaged systems! (this was a real aha for us).

What we already knew but had reinforced by this experience is: (5) there is no substitute for smart, flexible, committed Program Leadership – you can accomplish just about anything with the right people; (6) every transformational project has skeptics until you deliver.

So, oxymoron it may be, but Agile concepts (if not strict adherence to every nuance) can work in the most Rigid of Waterfall regulatory environments to produce great product. 

Take that from these two hands-on consultants. There you go - we ended this post with another oxymoron :)”

They can be reached at Damon DOT Auer AT tribridge DOT com and rglynn AT affinityinc DOT net

The Real Deal: Robert Hoffman on The Public Policy Imperative for Technology Vendors

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Robert Hoffman who recently joined Cognizant as its first Vice President of Global Public Policy. Previously, he served as Vice President of Government and Public Affairs for Oracle, where he oversaw the development and implementation of Oracle’s public policy agenda, which includes patent reform, visa reform, corporate tax reform, and international trade. Robert also previously served as co-chair and spokesperson for Compete America, a coalition of industries and trade associations dedicated to improving the US visa system for highly skilled professionals.  Robert has also served as a public policy advisor for the Governor of California, and four United Senates Senators, including service as Legislative Director for US Senators Larry Pressler (SD) and Mike DeWine (OH).

Here he writes about why technology vendors should be more active in Washington, DC and other major capitals around the world. 

"I’ve heard plenty of so-called Washington truisms over the years, but one cuts through like a Ginsu knife: If you’re not at the table, chances are, you’re on the menu. That’s especially true if you’re a US-based company that operates and sells in the global marketplace, and it's a major motivator for Cognizant's decision to engage in public policy.

Many of our clients and competitors are long-established US multinationals, and veterans in global public policy circles. They’ve known a simple truth: Government matters. Whether it’s in Washington, Brussels, Delhi or Beijing, decisions made by legislators and regulators can shave tens and even hundreds of millions of dollars off a company’s bottom line, or even break up a company. The larger the company, the greater the stakes in terms of jobs and shareholder value.

And given our growing global footprint, we cannot sit quietly and let competitors define the issue agenda, shaping public policies that materially impact our business. That’s why active participation in policy-making is right for our business, and responsible for our employees and shareholders. As our workforce and customer base have become more global, we encounter more minefields of antiquated, confusing, cumbersome and conflicting laws and regulations.

For example, US businesses have to manage under what amounts to a 1990 immigration system and a 1986 tax code. Meanwhile, other nations have modernized business taxes and liberalized migration laws to spur capital investment in high-paying, knowledge-driven industries. Even the European Union (EU) has recognized that the success of its economic integration requires a regional visa for skilled professionals.

Do these and other reforms happen in a vacuum? Of course not. As today’s health care debate has proven, the need for reform does not alone dictate the appropriate or beneficial policy response. It takes collaboration, innovation and inspiration – the same approach we utilize to find solutions to our clients’ complex business problems. Now, we’re ready to apply that same leadership towards complex policy problems.

So how will we engage in public policy? To start, we have to introduce ourselves to policymakers, and in doing that, we’ll also reinforce policymaking’s first commandment: Do no harm. Here, we have a great story to tell: Each day, our professionals are collaborating with market leaders in financial services, health care, energy and other major industries to gain real, untapped value out of their technology investments, enabling our clients to invest more in their core strengths, and fueling future innovation. That’s good business, and good public policy.

Second, by engaging in global public policy, we can better anticipate changing policy trends in regulated industries like finance and health care, and work with our customers on ways to respond to new laws and regulations without diminishing the quality of the services they provide.

Third, we will work collaboratively with our industry partners and policymakers across the globe to reform or remove outdated laws, while modernizing critical policies that enable companies like ours not only to innovate and compete, but also to advance important policy goals, such as energy efficiency, green supply chain, health care cost containment, and capital growth.

Another old DC truism is that businesses see policy making as a cost center – a necessary evil. We disagree. Public policy is an important complement to the core business objectives Cognizant strives to achieve for its clients, employees and shareholders. The real evil is to do nothing.

So, whether it is immigration, data privacy, or taxation, we look forward to being at the policy table. Just like in business, that outlook separates the policy leaders from the policy laggards."

Robert can be reached at Robert DOT Hoffman AT Cognizant DOT com

The Real Deal: Ton Dobbe on Change-Ready Software

This continues a series of guest columns from practitioners and bloggers I respect. The category – The Real Deal – describes them well.

This time it is Ton Dobbe, VP of Product Marketing for Agresso which goes to market with two enterprise software brands:  Agresso Business World and Coda Financials. A long-time software industry veteran, here Ton writes about the general perception that all ERP software is like pouring concrete around your feet. Once it sets, it becomes a significant constraint on your business.

“Readers of Vinnie’s blog know he celebrates disruptive vendors and trends in technology. But technology is not the only industry sector which sees rapid change. Over most of Agresso’s 25 year history, we have noticed a certain type of customer was repeatedly attracted to us: one that lived in a constant state of turmoil. The reasons were varied – restructuring/reorganizations, new government compliance requirements, ongoing M&A activities, etc. – but these types of “hyper-activity” companies kept selecting….and returning to us for repeat business. It was such a constant in our customer base that we trademarked that characteristic - Businesses Living IN Change (BLINC for short)

But that constant change costs companies dearly via their rigid ERP systems and business processes they enable. According to a recent study by CFO Magazine, the average mid-market company is struggling under a recurring annual spend for ERP system change at $1.2 million dollars a year.

We did not know exactly what – but we were doing “something” right by not burdening our customers with that big an expense. It actually wasn’t till 2006 when we first starting asking input from the industry analyst community that our differentiator was brought to our attention. They told us the “common customer thread” was linked to something embedded in our solution: our underlying VITA ™ architecture. As they say, sometimes things which are blindingly obvious to others are not so obvious to you.

VITA’s foundation is an intertwined grouping of business data, business processes and reporting/analytics that move in lockstep. Role-based changes can be made easily at the graphical user interface (GUI) level via easy “drag and drop” actions to tree structures (like those you see in Microsoft Outlook. The net result is that departmental managers can completely bypass the need for IT intervention to create new divisions; collapse, expand or append activities or workgroups; analyze and experiment with outcomes; then immediately expedite and implement change. There are almost limitless variations of changes that can be accomplished by non-IT people. It saves companies that useless investment the CFO Magazine article discusses.

I hear my competitors talk in technical jargon like Services-Oriented Architecture (SOA). SOA is great for plugging together disparate technology/application pieces (and Agresso customers use our SOA for that role), but don’t solve the real problem: fast, inexpensive business change that can be performed ideally at the user level.

I am glad our analyst friends have identified that it’s our architecture that makes us different. It has helped us to be of better service to those who need us the most – BLINC organizations. It has also clearly demonstrated to software buyers that technology is not a commodity…there are indeed very compelling reasons for buyers to gain a clear understanding of the differences before buying.”

Ton can be reached at ton DOT dobbe AT unit4agresso DOT com

The Real Deal: Karen Watts on the Changing Role of CFOs – From Tactical to Impactful

This continues a series of guest columns from practitioners and bloggers I respect. The category – The Real Deal – describes them well.

This time it is Karen Watts who is President and Founder of Corefino. CFOs have long nudged even pushed their peers in manufacturing, HR, IT, other domains to outsource but have tended to keep their own operations in-house. Karen asks why?

“They say the definition of insanity is doing something over and over again and expecting a different outcome, yet that’s exactly what happens year after year within the CFO community when it comes to running our accounting departments. I know, because until Corefino, I spent my entire career as a CFO and, like the rest of my financial executive brethren, was an all-too-willing participant in perpetuating what might be called “OFF” -- On-site Financial follies!

It works something like this: most CFO’s come up through the financial department rank and file as accountants, financial analysts, etc. and are used to collaborating and being surrounded by “the pack.” As we work our way up the management chain to controller and CFO, we draw comfort from cube after cube of head-down workers tirelessly crunching numbers, re-checking compliances and performing “routine financials.”

But here’s the wrinkle: three things changed that turned even the most conscientious, intelligent CFOs into anything BUT strategic:

· Technology Complexity – Accounting systems are now packaged within or integrated with multiple enterprise application source systems. These primarily on-site deployed systems are expensive to install, even more difficult to learn, and absolutely are impossible to change easily without additional cost and disruption;

· Workforce Complexity –Today, your most efficient accounting new hire is (at best) trained on one or two enterprise applications, which lasts only until the next version/ release. Those on-site employees need to be repeatedly trained at significant cost and time disruption. And, companies can no longer react quickly and easily to bad quarters by immediately excising redundant personnel based on current HR laws.

· Accounting Compliance Complexity -- Multi-national, multi-division, multi-currency accounting is no longer the exception, it’s the rule. Sprinkle in a good measure of changing local, state and national tax changes, a dash or two of changeable accounting rules and you’ve got a recipe for disaster if you aren’t up on every new edict. And that’s not even factoring in massive sweeping accounting changes – like the cut-over from GAAP to IFRS, or the growing proposed array of “green” laws carrying financial/accounting implications.

The once comfortable CFO paradigm of on-site technology and on-site accountants works now only under this scenario: if CFOs willingly enslave ourselves to the tactical, versus the impactful. The multiple millions of dollars that mid-market and larger firms spend on deploying and keeping their financial solutions current make the CFO accountable to ensuring these millions are spent right: picking the right vendor, involving themselves in key technology deployment decisions, etc. The people training factor makes it worse. That pulls us off (yes OFF – Onsite Financial Follies) of the strategic financial activist job, and makes us technology/people babysitters. And yet we doggedly repeat this on-premise model and expect a different outcome. That’s insanity!

I founded Corefino (out of desperation!) to provide an integratable, Best- in-Class solution for the “Strategic CFO.” It has three pieces: a People-Place-Platform paradigm.

First, I leveraged what hasn’t existed previously – the newest genre of sophisticated software-as-a-service (SaaS) financial solutions (like Salesforce.com-architected CODA 2go and Intacct). This removes the technology headache of performing a routine financial function on site – the same way that ADP perfected the routine payroll function.

Next, I focused on the people issue. Corefino’s business process outsourcing (BPO) model is second to none: a highly skilled, scalable team of off-site accounting experts, each selected for their skill in a particular expertise, each process passing from one expert to the next.

Finally, I spent three years building the Corefino Triple-C Platform™ …a three-part Connect-Correct-Comply vetted framework of more than 500 Best Practices and business process workflows. It’s patented, one-of-a-kind, and constantly updated. CFOs (and others) have 24x7 anywhere/anytime access via a convenient Web-Based portal.

All three of these pieces are available on a monthly, subscription-based model that saves most companies between 25-40% immediately.

All of us need to look no further than financial press pages to know that the CFOs role in business is evolving and under assault. One headlined blue chip firm in the financial sector just announced that it’s hired its third CFO in as many years. CFO magazine runs the CFO “Churn-o-Meter.” It’s time we start doing something different with our time/focus; it’s time we exit the technology/people babysitting and leave it to others.”

The Real Deal: Nagaraja Srivatsan on Rethinking Product Development in Life Sciences

This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal - describes them well.

This time it is Nagaraja Srivatsan who is Vice President & Practice Leader, Life Sciences at Cognizant, a leading outsourcer – and a sponsor of this blog. He writes about the significant opportunities to rethink product development in Life Sciences

“Among the major strategic challenges facing global life sciences companies today is how to reduce the cost and time-to-market associated with bringing new products to market. The process averages nearly $900 million and 10 years of research and development for every major product.

As many industries before them, life sciences companies are being forced to answer a few fundamental questions: Which business processes are core to operational success, and perhaps more importantly, which are not. If a task is non-core, then it is likely a candidate to outsource to a trusted specialist which by harnessing a lower cost, highly skilled global talent pool can deliver superior outcomes. Taking this approach enables life sciences companies to then reallocate resources to core activities.

Historically, life sciences companies were comfortable outsourcing tasks in the clinical trial process to Contract Research Organizations (CROs). As life sciences companies started to create process standards, they looked at specific functions or business processes in the execution of clinical trials to outsource. This was called the Function Solution Provider model.

Today, the global economic crisis is changing the competitive equation. Amid resource constraints, life sciences companies are facing heightened pressure to speed new molecular entities through the regulatory approval process. They need a mechanism to increase the velocity of outcomes that arise from the clinical trial process to accelerate the transformation of costly R&D into revenue- producing activities. They now realize the “not-invented here syndrome,” which had limited outsourcing to CROs, reinforced an expensive and inflexible cost structure. They now know that not everything previously deemed core to their business was so. As a result, many companies are reassessing and re-defining what is core. And finding several areas which can be moved out including Clinical Data Management, Clinical Analytics and Medical writing, Submissions Management Support, Product Complaint Centers, Safety Case Processing and Safety Reporting.

How can life sciences companies embrace a more flexible business model to handle these newly considered non-core activities? We suggest a framework called “The In (sourced)-Out (sourced), Here (high-cost locations like U.S. and Europe)-There (low- cost locations like India and China)”.  The graphic below shows an example across the 4 quadrants (click on graphic to enlarge)

Here’s how this model could work in clinical operations. Start by examining key business activities, taking an end-to-end perspective. For instance, with Clinical Data Management they need to evaluate activities starting with study planning, set-up, panel recruitment and study execution and through data clean-up, analysis, reporting, closure and reuse. Life Sciences companies then need to decompose these processes into sub-processes and assess the best location where the process should be executed – Here ( in close proximity to stake holders) or There (executed remotely) and also evaluate if this process is core and needs to be executed (inside the organization or outsourced). This must be done for each and every activity.

Core sub-processes stay “Here” and “In”; non-core are moved “There” and “Out” to trusted partners. This is true across the industry, whether product development occurs in high-cost locations in the U.S. and Europe or lower cost regions of the world like India. The challenge is maintaining consistency of process across the product development lifecycle so that product quality doesn’t become a victim of necessary cost containment initiatives. In life sciences, as you can imagine, you cannot tolerate quality short cuts.

So, what are the critical success factors for a successful global service partnership? It’s the usual things (to name a few): proper governance; effective process; resource management; risk mitigation; and of course, delivering value – outcomes that could not be achieved otherwise. Some key steps include:

o Meeting/Exceeding required service levels: Bringing the right domain, talent and the tools can ensure exceptional quality of service.

o Measuring success: By establishing key performance metrics and rigorously measuring and monitoring them, life sciences companies can quantitatively demonstrate engagement success.

o Meeting regulatory requirements: You need to have the right audit process as well as quality system. Domain experience ensures that you are compliant with all audit rigor required by global regulatory agencies.

Judiciously applying the In-Out, Here-There approach will enable life sciences companies to elevate their operational efficiency, reduce costs and deliver higher quality products that sustain competitiveness in any economic cycle.”

He can be emailed at NSrivatsan AT cognizant.com

The Real Deal: Michael Lamoureux on Software Acquisition Tips and Traps

This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal - describes them well.

This time, it is “The Doctor” recapping a series of good, solid software spend tips

“At times, the acquisition of enterprise software can be just as complex as the acquisition of software services ... so much so that you might want to bring in a Deal Architect to help you. But if you know what to look for, you can avoid the negative gotcha's that inflate the price tag and catch many firms by surprise.

Watch Out for the Big Lie

Some sales representatives will lie and say "yes, we have that capability" when they don't, and others will give a resounding "yes, we do" if the solution only has part of the capability. Avoid the Big Lie by insisting on a live demo where you can test the functionality for yourself.

Chuck the Check Lists

Don't follow the common trade-rag practice of comparing products side-by-side using feature lists. The lists are always dominated by big vendor features, product differences can't be defined as "yes/no" entries in a 400 line grid, and it's not the features, but the functionality. Does the product support your business processes?

Wait for the Blush to Leave the Rose

New customers are highly motivated to say the software is great, they just spent a bundle on it. For a balanced testimonial of real value, talk to a customer who has been using the product for a year or two.

Don't Be Put At Ease by the Presence of an SLA

The majority of Service Level Agreements (SLAs), designed to give you a false sense of security, use ambiguous wording that insures that the vendor will get to keep your money for the length of the contract, no matter what.

There's No Such Thing as a Free Lunch

Free modules? Free support? Free training? Not likely! Either it's included in the price or it's being offered as an enticement to lock you in for a fixed term. Buy extras a-la-carte.

Don't Get Fooled by the License Fee in Disguise

Many enterprise software contracts have a deeply buried clause that requires you to pay the annual maintenance fee or lose the right to use the software. That's not a maintenance fee, that's a license fee. If you've paid a large amount to acquire the software, make sure you should retain the right to use the software (as-is) for as long as you desire.

Don't Get Screwed by a New Release

The vendor will eventually come out with a new release and expect you to pay a large tranche of money to get it. Make sure that the price of upgrades are defined up-front to understand the true lifetime cost.

Forego the Escrow

You don't have a dedicated software development team and even if you do, it's going to take them a long time to wrap their head around millions of line of unfamiliar code. What you really need is the ability to get a complete extract of your data in a neutral format (XML, CVS, etc.) at any time. That way you can always obtain a competitive solution, load your data, and keep on truckin'.

Be Clear on Software vs. Service

Some software products aren't really software at all. They require services, configuration, or other "magic" to be performed on a regular basis to keep the product running. Make sure that you can procure services from third party vendors.

Don't Get Blind-Sided By IT

You identify a new software program that will make your life easier and deliver ROI. You're about to sign the deal when IT says "we already have a product that does that with extra licenses", even though they don't! Sound familiar? Avoid this scenario by building your ROI case with the IT department. That way you can verify that no available product solves your problem and present a strong case to management.

If you follow these tips, you're well on your way to getting a good deal on the right enterprise software for you.

P.S. This guest-post is a condensed summary of the first four posts in the Software Acquisition Insider Tips series that originally ran on Sourcing Innovation. You can find the originals here: Part I, Part II, Part III, and Part IV. “

The Real Deal: Jeff Walker on Building a Seriously Fun Software Company

This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal - describes them well.

Jeff Walker, a fellow Enterprise Irregular, recently announced his company, Altassian (which makes wikis and other collaboration software) had passed life time revenues of $100 million in revenues (- revenues for this year are running at $40 million).

So I asked him how that was any different than that of so many other companies before them that had crossed the milestone. His response “we have had more fun building it than anyone else before” Now, I was intrigued – how could a company with the weight of the world on its shoulders (the name is derived from Atlas) be “fun”?

So I invited him to write a guest column, and as you can read there is a much deeper meaning to his idea of “fun.” Not surprising for someone who has beaten cancer twice now and has learned to balance work, life and fun as few of us can imagine.

“At Atlassian, we talk about creating something different. Not for the sake of it. Because we’re never convinced norms should be accepted. Even our own could change. At the risk of simplification, these are my three Deep Lessons I have internalized over 3.5 years in this company.

1. Open Up Your Company

Why do software companies hide prices? Why must I call a sales person to get them? Why must I fill out an order form to get a goddamned PDF of half-baked content? Why don’t more companies treat customers with respect and develop trust through openness? Sounds straightforward, but this is the cat-and-mouse game that enterprise software companies persist in.

We think open pricing, open license terms, open bug and issue tracking of our products, and licensing our source code are what people, like us, want. We ask ourselves: would we buy this crap? How do you want to be treated? That’s a good test for how transparent you are.

2. Affordable Prices

Mike Cannon-Brookes (one of our founders) pounds on the table regularly about the price of entry. He is always trying to figure out how to make it easy for the next developer, the next IT manager, the next knowledge worker to not hesitate. Once we have a product we would use, then we have a fist fight over keeping the prices low. The low price principle was most striking when I met Mike and Scott Farquhar, the other founder.

They are, let’s say, frugal Aussies. They had that shining spirit from Down Under which is an authentic Aussie practicality that was refreshingly unconventional in Silicon Valley. Funny thing is: even though the founders are no longer quite so frugal, our prices have rarely changed. Keep your prices low, Mister Software Man.

3. Anal-Retentive Analytics and Metrics

Scott is our Super Metrics Warrior. Scott got us measuring Net Promoter Score. Scott quizzes for so much detail and facts about the business, people leave the room dizzy and frustrated because they are starting to realize what they don’t know.

We don’t have the systems and analytics yet to measure up to some great large companies, but for a $40 million/year business with 185 employees, we’ve pretty damn good. We analyze the shit out of everything. We are constantly writing queries and dashboards on our internal wiki running Atlassian Confluence. This is our form of Lighting Business Intelligence, without any traditional BI software overhead. It’s also one of the hidden gems in our wiki.

Every team has a dashboard, but more important, every team is pissed their dashboard isn’t better. Continually unhappy with the gaps in our data, and searching for that Last Shaker of Metrics, we are on a Forced March for more data. This is a Mission from God I am still learning.

I could rant on about what we think a different kind of software company should be, because we’re still not there. We’re trying though.

And having our version of serious fun -)”

Jeff can be reached at Jeffrey AT atlassian.com

The Real Deal: David Axson on why most BI projects disappoint

This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal describes them well.

I first met David Axson in 1996 when he was pioneering concepts around process benchmarking at The Hackett Group and have stayed in touch. He is noted author and speaker in business management and technology. He is currently working with a number of organizations on the translation of technology promise into tangible results – which should keep him busy for many years. He was also a former Head of Corporate Planning for Bank of America. 

"Remember when just a few years ago it appeared that SAP stood for Solves All Problems? Well now the focus is squarely on the power of business intelligence to drive increased competitiveness, value creation and any other appropriate buzzword you care to mention – and SAP’s right there with their acquisitions of Business Objects, Outlooksoft and Cartesis to its portfolio. Can their cure for cancer be far behind?

Don’t get me wrong, I fully appreciate the potential of business intelligence tools and applications to dramatically contribute to an organization’s success,but I also see numerous initiatives disappoint. Why the gap between expectation and realization?

Having observed and participated in numerous “BI” initiatives over the last twenty years I think the problem is easy to understand. Take a look at the exhibit below.

 

This is the David Axson view of all IT projects. It’s incredibly simplistic and devoid of acronyms – not an OLAP or XML in sight; but it does encapsulate the main elements of every BI program. First we collect data from somewhere; then the structure it; before putting into an efficient and accessible storage vehicle;the data can then be accessed in order to perform certain transformations or analysis that can be automatic or user-defined; and finally we use it to make decisions. Pretty simple really. However the disconnect comes when one considers the relationship between cost/effort and value. In any BI project, the first four steps consume 95% or more of the effort/cost. We spend lots of time and money sourcing data, cleansing data, organizing data and transforming data. However, when you adopt a value perspective close to 100% of the value occurs in the fifth step when the resulting intelligence is actually used to make a decision. Now in the average project plan and budget, consider how much money or how many tasks are devoted to the first four steps versus the fifth step. All too often the “training” line is minuscule and consists of teaching users how to print and providing them with the number of the help desk which is usually staffed by folks who know little or nothing about how to use information to make better decisions. We deliver incredibly rich applications with little or nig guidance on how to use them effectively. It’s the business equivalent of giving your car keys to your sixteen year old and the only guidance you offer is to, “Go have fun.”

Until we give at least equal weight to the use of information and the associated skills, authority and confidence necessary to make better decisions as we do to the “cool” technology we will continue to lament the disappointing ROI on BI."

David  can be contacted at david@davidaxson.com or at www.davidaxson.com.

The Real Deal: Jackie Bassett - Stop educating the CEO about the business value of technology

This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal describes them well.

Jackie Bassett is founder and CEO of BT Industrials Inc., a strategic management and technology consulting firm that helps CEOs and CIOs of global companies integrate technology into business strategy. She is a co-author of the book "A Seat at the Table for CEOs and CSOs"

"Why stop? It’s not working – and it will never work.

We need to stop selling FUD to the fearless. We need to stop leading with compliance to justify IT spend (when was the last time you bought stock in a company using compliance as a key motivator?)

We need to stop focusing on emergencies and efficiencies or we become the very definition of a cost center. The only thing a CEO (or CFO) will ever look to do with a cost center is cut it.

“Insanity is doing the same thing over and over, expecting a different result.” - Albert Einstein.

Globalization has just met digitalization and we’ve just run out of time.The average tenure for a CEO at a Fortune 500 company is 3 years. He doesn’t have time for Linux or Vista or patch Tuesday or SOA– he must deliver the results that the Board, the shareholders and the market are looking for.

He needs to deliver what customers want, when they want it and how they want it or he will miss the market. He knows that if he can’t deliver, he will lose customer business to someone who can.

Want a seat at the table? Take the lead here!

Your CEO won’t return your call asking for $100K on WAN optimization but he’ll chase you down the hall when you offer to help build a product that will win new international customers.

IT knows what customers want or at least knows how to figure it out. Customer conversations, requests and insights are right in the network! The right answers are in their emails to your sales teams and their phone calls to customer support.

They’re in every transaction between your customers, partners and suppliers. They’re in structured and unstructured data. They’re right in the hands of IT!

It’s not what keeps the CEO up at night that matters. It’s what gets him up in the morning that matters – the sound of Ka-Ching!

Focus on the many, many ways we can turn IT into a Profit Center. Ka-Ching! No CEO or CFO ever looks to cut their profit center. As Rudy Provoost CEO, Philips Lighting says:

“Technologies are just a vehicle to respond to needs and come up with absolutely brilliant solutions and applications.”

Jackie can be reached at: jackieb@btind.com

The Real Deal: James Taylor on Raising your Enterprise Application IQ

This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal describes them well.

James Taylor is co-founder of Smart(enough)Systems and co-author of a book with the same name.

"While almost anyone who has to use one of today’s typical enterprise applications probably has a long list of things that are wrong with their particular application, there is at least one thing that is common to almost all of them: they are dumb. Now that’s a pretty strong statement but think about it. A typical enterprise application, whether custom or packaged, let’s you put in data, stores it for you and regurgitates it when you ask nicely. 

Such an application relies entirely on people for any intelligence, for any decision making. This reliance:

• Limits straight through processing in any but the simplest processes.
• Means that 24x7 operations require 24x7 staffing.
• Reduces the ROI of event processing or business activity monitoring

More than anything, it means that none of the data in these systems is being used to improve their response to your customers, suppliers or partners. The data simply gets stored and then shows up in reports – past behavior and results do not inform the next transaction. And if your data is not being used to improve your operations then you are failing to use one of your most important assets – the unique visibility you have into your own business. Traditional BI approaches are focused on delivering insight to knowledge workers – they are not going to work for automated systems or high-volume, operational transactions.

Fortunately there is a well established path to improving the value of enterprise applications and taking more advantage of your data. This approach is known as Enterprise Decision Management (or Business Decision Management or just Decision Management). Here’s a definition:

Enterprise Decision Management is an approach for automating and improving high-volume operational decisions. Focusing on operational decisions, it develops decision services using business rules to automate those decisions, adds analytic insight to these services using predictive analytics and allows for the ongoing improvements of decision-making through adaptive control and optimization.

Identifying the critical operational decisions that inform, personalize, target and control the transactions within your enterprise applications can make those applications smarter – not intelligent, but smart enough to be useful. Instead of offering every customer the same price, your application can take a pricing decision. Instead of telling a customer someone will get back to them, your website can determine the risks and tiers for a policy and underwrite it. Instead of adding a generic cross-sell offer to the call script, your call center application can customize the script to maximize the value of this conversation with this customer. Instead of an account manager starting their day finding a message that a delayed shipment might upset a key customer, your system can re-route deliveries across customers to minimize the cost impact based on service level agreements. And so on.

When you focus on these decisions there is a way to add insight from your data. The pricing model can be based on an optimization model that uses historical trends, the underwriting decision can use risk scorecards that turn past behavior into future probabilities, the cross-sell can use data-driven segmentation to target customers. Suddenly the data you have can be put to work making your operations smarter.

The technology to do this exists today. Not only are there a number of decisioning platforms, there is a strong market for business rules management systems, plenty of data mining and predictive analytic tools, optimization products and growing integration between them. Processing power, data storage and virtualization, integration technologies and SOA have all helped make this approach cost effective and practical. 

It’s time to end the era of dumb applications and start making your computers do more of the work."

Read James's blog at http://www.smartenoughsystems.com/wp