Is Your Business Running On China Time

As you are meeting on a new product, you are drawing, sketching, and feature listing on your Motorola handheld tablet - you then click and send these out to the production folks, who respond within 12 hrs with estimates to get an initial product shipped within one month. Meanwhile the specs are sent to marketing who send out customized press releases within 24 hrs. With estimates back in 12 hrs, pricing details are sent out to customers within the next 12 hours. Customer orders are received within the next 24 hrs to size production. With production quantities known, vendor orders are requested within the next 12 hours and orders placed.

In short, your product goes from concept to production and sales within 24 hours and product is shipped and cash received with 30 days. All done electronically. Of course if your decision-making was automated, you could do it within a couple of hours.

Sound like some megatrend prediction? It's how things are running in China today. Are your IT systems up to it ?

Automate or Go Under

In one of my rare, unscientific opinions, I have stated that most American companies need to reduce their staffs 30-50% thru automation in order to compete and survive in the new normal global economy.

The new sign of a prosperous, prestigious company is how FEW employees they have, not how many. I love to hear our competitors boast how many offices or employees they have - it just means we're killing them on overhead expense.

The real metric today is productivity - either revenue/employee or fully allocated cost per product. And the best way you can boost those numbers is thru automation. Not just on the factory floor, but in the office. And automation means IT. Is your organization increasing it's automation efforts with more IT budget or trying to hang on to employees?

In the 80's and 90's General Motors, Chrysler, et al tried out robots - they deemed them too unreliable and stayed with employees. Look where that strategy got them. Even the infamous "Clunkers" stimulus gave highly automated Toyota the abundance of sales. Why? Automation gave them higher quality and reliability.

But automation software is not just for the factory floor - it's even more important for the office! Today many companies make most of their money from services. And guess what, many services can be automated.

I've heard it said that software can't make decisions the same as old Joe - that's right - it can make BETTER decisions. By having a good knowledge data base, you can be pulling in the advice of numerous experts, not just one. And 24x7. And no H1N1 staffing headaches! This can be another "quick win" for your department.

Are Your Dashboards Dumb ?

Look at most presentations on business intelligence and you will see most of the emphasis on beautiful, jazzy dashboards - gauges, drill downs, ... They give you lots of factual information, but little help in figuring out what to do.

So most dashboards are actually dumb in the intelligence sense - they don't think, they don't give advice, and most times they don't even predict. Did your dashboards warn you about the big Wall Street crash? Or that your business would not get the capital it needed ? Or even that you should have cut your expenses 10% more than you did? Or that your sales demographics are changing big time?

Actually, I know that a few smart companies and hedge funds really do have "smart" dashboards - the kind of systems that reveal, predict, and advise.

At Tiger Nassau, we use the slogan "more than just dashboards" to emphasize that business intelligence should not be about fancy looking dashboard gauges, but rather, ... intelligence!

We are not yet at the point where computers can out think the average human - Big Blue, the chess game, wins against grand masters, but only because the rules of the game are constrained (size of board, number of pieces, types of moves, etc).

However, it's likely we are reaching, or have reached, the 80-20 point - where intelligent systems can sift thru or take you to the 80% point, freeing your brain to spend time on the last remaining 20% of really complex analysis and decision making. In short, your systems should be answering not only "what happened", but, "what is likely to happen", or even "what are the likely outcomes if we do x or y or z".

This is the key to your success for making highly productive, excellent decisions. So, are your dashboards intelligent or just dumb ?

Getting Quick Wins

"Quick Wins" are fast actions that deliver core value to the organization: sales increases (and subsequent increased cash flow); increased market share; and immediate cost savings.

But to be a "quick win", the action must be real, must be immediate, and must be demonstratable. This means you need the tools to both examine as well as measure.

Let's take a simple example:
Your web statistics show customers that are looking at back pain ointment also look at heating pads. But your sales statistics show only the low cost, low margin back pain ointment is selling, with little sales in heating pads. So you run a promotion with signage around the ointment display that if customers buy $5 or more of back ointment, they get 50% off a heating pad. You immediately see sales and margins go up => quick win.

As CIO, what's your role in this ? Isn't this a "marketing thing"? Actually it's a "data systems thing" and you're master of data systems. It's your data systems that sifted thru millions of product sales and web activity to identify some likely candidates for marketing to focus on. It's your data systems that evaluated the likely outcomes for different marketing initiatives. It's your
data systems that closely predict inventory levels during sales promotions to ensure they are ready for increased sales. And finally it's your data systems that measured the success of the promotion.

So don't get caught spending all your time focusing on the big, major IT investment projects and spend some time generating a few "quick wins". You need and deserve some recognition at the Board meeting.