Even today, Business Intelligence is one of those very popular and least understood terms.
I have always had my reservations on the very definition of Business Intelligence as term. Infact, since the day I jumped into the thick of how it has been defined, understood and implemented (as if it is a program or project!), I found it to be extremely limiting and misguided.
Recently, I saw a blog post in a popular Information Management portal where the current evolving definition of Business Intelligence was posted; I simply could not resist expressing my views to a broader audience. Here is the definition that I saw:
“A set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making”.
Even the Wikipedia defines BI as –“Business Intelligence (BI) refers to skills, processes, technologies, applications and practices used to support decision making”
If you closely look at these two definitions, they have the following serious limitations:
1. It’s not defined in a Business language
When you look closer it seems to be plausibly good definition for Information Supply Chain rather than Business Intelligence, although information supply chain is a critical and integral part. Also, we need to define the term “Business Intelligence” and not Business and Intelligence as two independent definitions
2. It does not contain a Business purpose
What should a business do better in business terms that is clearly measurable and can be benchmarked over the long term? Let me borrow the definition of BUSINESS from Wikipedia to explain this better – it says business is a legally recognized organization designed to provide products and services to consumers for a profit. The purpose thus should be on providing these in ways that increases return and wealth of owners.
3. It seems to capture information life cycle only
Behaviours and people are the core to being intelligent. It does not specifically highlight if organization has the motivation to exploit the information and act on it. It also does not capture if organizations know what to measure and analyse to run the business better.
4. The word “Decision–making” used in the definition can apply to life in general and not Business in particular
Here is an alternative definition for Business Intelligence Iam proposing to the broader business community.
According to me, Business Intelligence is “An organization’s motivation and ability to effectively create and use information to execute business activities that deliver higher and sustainable profitability compared to competition”
What does this definition imply?
1. Sense of Urgency to Succeed – “Motivation”
2. Action – “Execute business activities that deliver”
3. Focus on clues that matter – “ability to effectively create and use information”
4. Customer-centric and Ethical - “Higher and sustainable profitability”
5. Measurable and Benchmark able – “compared to competition”
I welcome your thoughts and suggestions to improve the definition.
Tuesday, February 23, 2010
Tuesday, June 16, 2009
From sourcing ingredients to delivering the Burger - Suggested Recipe for Indian IT Service providers to move up the value chain
Imagine walking into a McDonald’s restaurant and being served the following in a plate - A slice of Tomato, some Lettuce, a slice of Cheese, a Chicken or Vegetarian or Beef patty and some mayonnaise on the side.
Place you hand on the heart and say what would your reaction be? It is more likely to be “I don’t think I will be satisfied eating this and by the way where’s the bread?” This is precisely what the CIO feels when he is evaluating you as a vendor for IT services outsourcing. The service stack of 9 out of 10 Indian CSI (Consulting and System Integrator) would resemble the one depicted in the burger picture with perhaps very few even having visibility about the breads “Business Strategy” and “Business Operations”.
A hungry person feels happy only when she can chew from top to bottom in every bite. Similarly, a business would get ROI from IT only when it cuts through all components that link strategy to operations as shown in the burger picture above. What can we learn from this very simple burger example?
Place you hand on the heart and say what would your reaction be? It is more likely to be “I don’t think I will be satisfied eating this and by the way where’s the bread?” This is precisely what the CIO feels when he is evaluating you as a vendor for IT services outsourcing. The service stack of 9 out of 10 Indian CSI (Consulting and System Integrator) would resemble the one depicted in the burger picture with perhaps very few even having visibility about the breads “Business Strategy” and “Business Operations”.
A hungry person feels happy only when she can chew from top to bottom in every bite. Similarly, a business would get ROI from IT only when it cuts through all components that link strategy to operations as shown in the burger picture above. What can we learn from this very simple burger example?
Today, most CSIs have the following goals:
1. We are looking to plan next wave of growth and revenues?
2. We are aiming to be different than the others in the pack?
3. We need to move away from being known as a body shopper or “run of the mill” Application Management Services(AMS) provider and move up the value chain
If your answer is “Yes” to one or more of the above sentences, here are some ideas that you can use to achieve those goals for yourself.
1. Try switching yourself from a “Services” to “Solutions” mindset. Mind you a solution cuts across current services that you have. Choose specific focus areas such as verticals or business improvement opportunities. Services are one of the most common elements I find on every company’s website. This hardly articulates what challenges of which customer you will help overcome. Remember customers don’t care so much about the glory of your methodologies as much they do about proving themselves to their organization. A solution to a recognized problem may perhaps create a hook!
2. Understand the uniqueness of your customer’s business situation and then create a burger that she will love. I have heard of and even been in some meetings where a vendor and customer celebrate 5 or 10 years of partnership and the customer says “We cherish the partnership too” and goes ahead and selects other vendors for services. You had 5 years to understand the uniqueness of the business and still allowed other vendors in! Make the transition from “Gathering Requirements” to “Advising on Requirements” today.
3. Don’t just focus on the ingredients. You will not be able to serve a burger if you focus on supplying ingredients for too long. You will end up creating an ingredients mindset that will be tough to change. This will also make you extremely vulnerable in uncertain times because you wouldn’t know just how many burgers will be consumed and your customers won’t tell you that. You will end up justifying, like others, why you produce the most superior Tomato slice!
4. Get the Bread. Your Sales team and Delivery Heads may tend to be people with very generic skills. You may well be using General Program Managers to deliver just about anything. This may be stopping you from showing the popular “value add” in delivery. Can you see the gap? Your sales team should be consultants who understand customer’s business extremely well. This will give you a clear ability to command respect and access to all levels, spot opportunities faster and of course sell much better. Try fixing this and see how the burger of win-win can be made.
1. We are looking to plan next wave of growth and revenues?
2. We are aiming to be different than the others in the pack?
3. We need to move away from being known as a body shopper or “run of the mill” Application Management Services(AMS) provider and move up the value chain
If your answer is “Yes” to one or more of the above sentences, here are some ideas that you can use to achieve those goals for yourself.
1. Try switching yourself from a “Services” to “Solutions” mindset. Mind you a solution cuts across current services that you have. Choose specific focus areas such as verticals or business improvement opportunities. Services are one of the most common elements I find on every company’s website. This hardly articulates what challenges of which customer you will help overcome. Remember customers don’t care so much about the glory of your methodologies as much they do about proving themselves to their organization. A solution to a recognized problem may perhaps create a hook!
2. Understand the uniqueness of your customer’s business situation and then create a burger that she will love. I have heard of and even been in some meetings where a vendor and customer celebrate 5 or 10 years of partnership and the customer says “We cherish the partnership too” and goes ahead and selects other vendors for services. You had 5 years to understand the uniqueness of the business and still allowed other vendors in! Make the transition from “Gathering Requirements” to “Advising on Requirements” today.
3. Don’t just focus on the ingredients. You will not be able to serve a burger if you focus on supplying ingredients for too long. You will end up creating an ingredients mindset that will be tough to change. This will also make you extremely vulnerable in uncertain times because you wouldn’t know just how many burgers will be consumed and your customers won’t tell you that. You will end up justifying, like others, why you produce the most superior Tomato slice!
4. Get the Bread. Your Sales team and Delivery Heads may tend to be people with very generic skills. You may well be using General Program Managers to deliver just about anything. This may be stopping you from showing the popular “value add” in delivery. Can you see the gap? Your sales team should be consultants who understand customer’s business extremely well. This will give you a clear ability to command respect and access to all levels, spot opportunities faster and of course sell much better. Try fixing this and see how the burger of win-win can be made.
In conclusion, use some of these ideas to become that true strategic partner to your customers and help a CIO achieve the elusive ROI from IT services and enable business become competitive.
Monday, April 27, 2009
What would change if Business doesnt get judged every quarter?
I know this may sound very silly, but there is something that bothers me to no end - "What would change in our lives if businesses didnt get judged every quarter?" - Would business leaders produce better returns for investors over the long term rather than trying to continuously meet unrealistic short term expectations of spectacular financial results?
When I read the news about companies registering profit drop or increase compared to last quarter or last year same quarter, I ask myself one question - So what?.....I mean what are you trying to say here? How are the fundamentals of a company getting better by delivering these short term results ? Companies will cook up financials, sales guys will sell to wrong people or sell wrong things this quarter, people will cut into investments made in sincere people half way through just to meet cost cutting targets - just to please a few brokers of greed ? Would love to hear what you feel?
When I read the news about companies registering profit drop or increase compared to last quarter or last year same quarter, I ask myself one question - So what?.....I mean what are you trying to say here? How are the fundamentals of a company getting better by delivering these short term results ? Companies will cook up financials, sales guys will sell to wrong people or sell wrong things this quarter, people will cut into investments made in sincere people half way through just to meet cost cutting targets - just to please a few brokers of greed ? Would love to hear what you feel?
Sunday, April 26, 2009
Nikhil's Wild Guide to Business Intelligence
In the wild, the competition is for survival and growth and winners usually are those that practice three simple steps time and again regardless of intrinsic advantages such as size, strength, speed etc.
- Know precisely what Survival Boosters (Right Food) and Survival Challengers (Competition including adverse climatic conditions) can increase/decrease chances of their survival and growth
- Look out for those Survival Boosters and Challengers in changing conditions of habitat to make survival and growth more predictable
- Constanly seek to choose to move/ live in habitats that have Maximum Survival Boosters and Minimum Survival Challengers
Winners implement these very effectively in the wild to not just survive but grow their species. Those who dont, do not survive their term! This is the Lifeline Strategy and Intelligence in the wild!
Lets look at a parallel of the Lifeline Strategy and Intelligence in the Business World. Obviously, Survival and Growth means the elusive Profitable Revenue Growth in business.
- Know precisely what Survival Boosters (Right Food) and Survival Challengers (Competition including adverse climatic conditions) can increase/decrease chances of their survival and growth
- Look out for those Survival Boosters and Challengers in changing conditions of habitat to make survival and growth more predictable
- Constanly seek to choose to move/ live in habitats that have Maximum Survival Boosters and Minimum Survival Challengers
Winners implement these very effectively in the wild to not just survive but grow their species. Those who dont, do not survive their term! This is the Lifeline Strategy and Intelligence in the wild!
Lets look at a parallel of the Lifeline Strategy and Intelligence in the Business World. Obviously, Survival and Growth means the elusive Profitable Revenue Growth in business.
This is what the principles would have to look like:
A. Knowing the Survival Boosters and Challengers
Survival Boosters are in two forms :
a. Risk free, Profitable, Long term customers that promote your business
b. Your weak competitors!
Survival Challengers are in two direct forms:
a. High risk, Unprofitable customers, one time customers that damage your profits and brand
b. Your Strong competitors
and one indirect form - Your wonderful organization culture!
Businesses need to know them extremely well. In my view, "Business Profit is directly proportional to currency of knowledge about customers and competition"
The second aspect is to make profit predictable in various scenarios. Hence, businesses need to look at complete set of data - past and current to make a meaningful prediction of future. Most businesses do not view it this way.
B. Know How to Apply it for Winning
Discover patterns for success. Asking tough questions like "Why is my current customer with me?"; "What are the top three things I should not do to lose this customer?"
Any business that is struggling under current economic scenario to make more money than the competition even after spending more, needs to very clinically investigate if it is implementing the "Life Strategy and Intelligence" principle objectively. It represents a fundamental review of how business is organized to survive and grow. This is what I call the foundation of Business Strategy and Intelligence and would strongly urge all Business Leaders to instill this into their businesses. Here are four simple tips to consider:
1. Proactively remove all organization silos. This is one of the biggest survival challenger manufactured by and sold into your oragnization and only you have the authority to change that permanently. See how several information silos falling apart can result in immediate wins for your business.
2. Deep Dive into your Survival Boosters and Challengers. Investigate all data about the Boosters and Challengers; it is usually lurking in people's heads waiting for you to declare "sharing as a mandate" or in many cases outside of your organization and ofcourse in your internal application assets. Get working on it right now or you will become a Booster (a weak competitor) for your competition now and even more when the climate changes!
3. Align efforts and resources to beat Challengers and Maximize Boosters. Get tough and real. Not about reducing costs to mathematically maintain a margin, but by aligning process and people (hence costs!) where they are usually most effective - Revenue Generation!
4. Prepare now for next logical Revenue cycle. Think of decline in your revenues from your current capacities as a logical indicator that your customers' world is likely to change. Think proactively about next wave of consumption, invest and be ready for your customer; ofcourse way before your competition!
And a wild final idea (Probably a new paradigm) - How about organizing your business around customer segments rather than functions and products? Maybe people will start working for marketshare outside the organization rather than inside!!!!!
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