Using rear view mirrors when driving at high speed through the mist!
Predicting tomorrows business, Business Analytics and Business Intelligence are only as reliable as the data they´re based upon! Just make sure that you get what you want!
Authors: Fred Keßler, M.BC.; Gilles Fiorio
Cutting edge competitiveness, is what business leaders are striving for – and they need to achieve it under pressure. To create the future, you need to understand the past – this is what we all learnt in school but, when it comes to a “corporate past”, we frequently experience guessing rather than facts.
The systematic and continuous analysis of an organisations´ data has mainly been introduced with larger enterprises to gain insights into their past (known as Business Intelligence) as well as to generate predictions for future business developments (known as Business Analytics). But, can you really expect to leverage your business, customer and supplier relations, or reduce your risks when you look at figures coming out of black boxes?
Looking at the history of meteorology for instance, we have evidence, that only after rigorous data collection since antiquity – which certainly inspired sometimes meaningful sayings in the Renaissance – the reliability of forecasts grew exponentially only from understanding atmospheric mechanisms based on the underlying data (especially by the Norwegian school of Bergen).
Learning from the past: You definitively need to understand and master how data is generated before you draw conclusions from how it looks like.
In our first article, we introduced you to the idea to have a closer look at your data and make a fair judgement only if you could trust them. With this article – as well as the following articles – we dig deeper and deeper into the subject and give some advice, how to leverage and master decision making.
It is quite a lot of strenuous work to collect, analyse and visualize your companies’ data. Surely, the aid of up-to-date analytical concepts, some software and IT systems will help you to do this much faster in an electronic way and format. Unfortunately, this does not affect the quality of the underlying data sources at all.
The English term “Business Intelligence” became popular in the middle of the 1990s. “Intelligence” stands for the insights generated from collecting and linking information and stems from the latin expression “intellegere”, meaning “to understand”, composed of “inter” meaning “between” and “legere” meaning “to read/to choose”. The more recent term “Business Analytics” is based on the Greek word “analisi” meaning “give a breakdown of”.
Consequently, you really need to understand what happens between input and output of your organisation in its different facets, before you read, break down and choose the pieces that you need to generate your insights.
Some may disagree and say that an experienced doctor can determine illnesses from symptoms. Such comparison is void, because it would postulate, that the quality of the standard operations of companies and their control by its analysts is equal to the perfection of a healthy human body shaped by a few hundreds of thousands of years of selective evolution.
Others might object that experienced business analysts have such strong knowledge of a field that it gives them the ability to deliver relevant explanations from the “numbers”. This could be true, but it would always be limited to their area of expertise and the given context of their businesses.
The development of access to mass data and the computer tools of analysis mean that you significantly succeed in describing what has happened so far or what should happen in the future by extrapolation. However, the risk here is to merely excel in the ability to explain discrepancies between forecasts and results without being able to progress in the delivery of results consistent with objectives as desired by any CEO. Moreover, you would not progress much on how to influence the achievement of results with respect to the desired objectives and the strategies undertaken.
Moving upstream this way, too many succeeding dysfunctions could be observed in organizational initiatives, generating the insight that current efforts do neither enhance control nor bring solutions! Too many professionals are demotivated by the pressure that the management put at bay, attempting to achieve chimerical objectives! Should you resign? No, you must not!
Your progress in developing and executing your strategies will come from your willingness and ability to re-invent the processes on which your company operates as well as to take advantage of modern information delivery and analysis capabilities. Only, when you know the results that your (internal or external) clients expect, you will be able to describe/design the transversal logical sequences of activities necessary to produce them. It is by knowing your clients expected value that you will learn to develop yourself without a silo vision. Your improvement in the implementation of strategies and the achievement of results will be coming from your successfully embedded and performing normative processes, producing consistent and reliable data over time. Finally, the analysis over process cycles will allow you adjustments, leading to the improvement and the setting of new ambitious as well as motivating goals!
Undeniably, introducing performance analytics to your organization that refers to results achieved through business process management has tremendous positive effects on the entire organisation.
You are a professional and of course you want to go on producing good results / value in your area. We want to make you aware that you could contribute to leverage your results. This could be achieved by pro-actively and kindly taking care of the pre-requisites of your success in areas, where you might not be directly accountable.
Let us open one of “pandoras boxes” by looking at a common mystery – the sales process. This is where a lot of people are normally doing something and achieving results (or simply don´t) but nobody could explain the why, the when and the how.
Most sales managers and sellers claim that they have a sales process in place. Well ultimately, they don´t but instead of intimidating them or make them lose their face they should rather be helped. First, they need to see what we see (and you will see in a minute). Please ask each of them independently to write down their process by simply filling the following form (use more lines, if necessary):
Within very short time you will have the undeniable facts before of your eyes. There is nothing even close to a process. You will receive as many variations of process rudiments as the number of participants who fill in the survey. Knowing an ideal sales process, from an academic point of view it is interesting to see the deviations between the different named results and the estimated forecast values (expected win probabilities at a certain result). From a CXO perspective this is not funny at all!
Integrating performance analytics based on what happens so far will not bring the desired results, as it is assessing a pooled variety of human assumptions – also called “a mess”.
Remember: A process is a series of activities in a timed-logical sequence to achieve one or more results.
Now imagine that there was a way to determine desired, sensible and measurable intermediate results on the way to a sale. The process would capture the achievement of the (desired and necessary) results by writing data into a database. Thus, you could analyse the performance of either everybody on an individual level or on teams, divisions, countries, until you could aggregate the performance of the entire organization.
You should have now noticed the importance of processes (Business Process Management) – especially and mandatorily prior to any kind of digitalization.
If you do not have a process, then you have a chaos. Digitalization will only automate the chaos! Would you still like to?
Finally, integrating performance analytics based on results achieved through business process management has tremendous positive effects on the entire organisation:
- Precision in forecasting
- Shorter sales cycles
- Better and quicker response to environmental changes, such as the needs and expectations of your customers, meeting their requirements while avoiding the expensive over-quality.
Marketing (like with sales, most companies do not even have a process in marketing and moreover, marketing is too often completely disconnected from Sales)
- A highly targeted execution of marketing actions, tailored to insights, generated from the data of the sales process operations
- A development of a common culture and a company organisation by processes together create that missing sense and bring joint efforts back to work.
- A neutral, factual and homogeneous measure of the processes performance with the data creates a reference base for the company and allows the longevity of the knowledge.
- Increased operational cash flows, by reducing the operating costs through continuous process innovation (matching objectives and resources).
- A seamless compliance by positioning the right controls at the right places.
Altogether, such endeavour is significantly increasing your competitiveness. We are sure that you would not believe all this from reading this article. Therefore, do not hesitate to get in touch with us to see why, how, what and where we have done it.
We at Synchrotech desire to nurture every true leader´s striving for excellence. We are convinced that critical reflections combined with aggregation of knowledge and adaption of methodological approaches are much better foundations for strategy development and execution than pure “go with the flow” mentality.
In 2019 we are delivering a series of articles and events on current CXO-topics, all designed to create an innovation hub with and for our customers, partners and employees, where we are building processes, bridging the gap between business and IT.
We cordially invite everybody to comment and discuss with us and / or meet us, as already frequently occurring. Also visit us on LEC Exhibition, April 09-10, 2019, in Geneva.