Categories
Analytics Various

Collaboration and BI?

One of the first things we learn from our parents and teachers is that we are stronger when we act as a team. 1+1=3 or something like. And it is true! I have had some of my best learning experiences in a team environment. Every once in a while, we forget just how powerful teamwork and collaboration can be. We get stuck trying to solve a problem by ourselves and we loose a lot of time. Okay. Everybody knows that.

But what about Business Intelligence and Business Analytics? Are we really collaborating with that team idea in mind? Even more important: even if we wanted to collaborate, would we be able to do so in an effective and efficient manner?

What does collaboration for BI and PM look like. Think about the following common situation. It is early Monday morning and you conduct some analysis in your BI portal. You quickly realize that there is a big problem. And you have no idea what to do about it. The first question that comes to mind is whether anybody else has come across this issue. But what do you do? It’s early in the morning. Nobody is in the office.

Social media are changing the way we communicate with each other. Email did that for us 15-20 years ago. Today we are at the start of a new revolution again. Twitter, Facebook, Flickr etc allow us to collaborate in an unprecedented way. We can leverage the wisdom of large crowds of people. People we don’t even know. The other day, I had a problem with my camera. I sent out a tweet with a question about it. 20 minutes later I had the problem solved with the help of other photographers out there on this planet. And this new way of collaborating is now entering the corporate world.

Back to our little Monday morning problem. We still have no idea what to do. Imagine we could quickly identify whether another colleague had reviewed this dashboard and come across this problem? What if you could see what steps they have taken to identify a solution? Wouldn’t it be nice to search for similar problems and find out how colleagues fixed this in the past? How about we could help other team members by contributing to their questions?

The time is right. We should be able to collaborate in our corporate world just like we collaborate in our private lifes. Cognos 10 allows us to just that. We can comment on dashboards, reports, cells, graphs. We can share activities, we can assign tasks. We can discuss, review and share. Just like we do on Facebook and Twitter. Within our own company. I have had to opportunity to test this functionality and I love it! But most importantly, the many customers I have shown this to love it just as much. When I return from travels through Europe and the Middle East I will share some additional thoughts and reactions about this. What do YOU think about this?

Categories
Finance Various

The useful budget?

Fall of 2010. Many people across the world are engaged in a process that has polarized generations of business managers. Some love it. Most hate it. Yet, almost every company invests endless numbers of hours into the process. We are talking about the annual budget.

BEGINNINGS

The annual budget is a management tool that was invented to help managers guide their undereducated employees. It had its origin in the public sector. The annual budget provided workers with guidance and predefined resource allocation throughout a fiscal year. It helped managers control their employees. That was back in the 1920s and 1930s. A lot has changed since then. Volatility has increased, employees are highly educated and the speed of business has accelerated. But we are still using the same tool. Every year. Is that the right approach?

WASTED TIME?

Jack Welch famously called the budget a serious waste of time & resources. And indeed, I have worked with many companies over my career where the budget consumes an enormous amount of resources. One particular Fortune 100 company I met with, spends around 9 months per year working out their budget. 9 months! But the reality is that about 75% of all budgets loose their validity after only 2-3 months of a fiscal year. We spend so much time and get such little return?

DYSFUNCTIONAL BEHAVIOR

Many companies use the budget as the main pillar of their variable compensation scheme. As a cost center manager I get a bonus if I stay within my budget. As a sales manager, I get a bonus if I make my sales numbers. Unfortunately, experience has shown that this type of compensation leads to dysfunctional behavior. The cost center manager won’t invest in a useful activity only to stay within budget. The sales manager might cut some bad deals towards the end of year to make his number. And then there is sandbagging: people will do anything to protect their budgets. The cost center manager will try to spend his budget to avoid any potential cutbacks in the following year. And the story goes on and on.

A BETTER BUDGET?

We could spend all day arguing about the budget. But truth of the matter is that most companies are not ready to get ride of the process…yet. Clearly there must be some value given the enormous amount of time and resources? Personally, I do think that the budget can add value, but it has to be done in the right way.¬†Without going into any details, every company should consider a few things:

  • Less detail: Reduce the detail in the budgets. This speeds up the process tremendously.
  • Change compensation: Move away from the budget compensation to include more important metrics.
  • Update the budget more frequently: Once a year does not cut it, anymore.
  • Automate the process: Throw those spreadsheets away and speed up the process by using proper technology.

Over the next few weeks, I will drill down on some ideas. There are some great stories from my clients. Until then….Happy Budgeting!

Categories
Analytics Various

Hello world and welcome to Performance Management Insights

Thanks much for reading this blog. My intention is to share experiences and ideas for better performance management.

Performance Management helps companies make smarter business decisions. It is basically a cycle of three questions:

  • How is my business performing?
  • Why is that so?
  • What should I be doing moving forward?

Questions 1 and 2 evolve around reporting, monitoring & analysis. The third question touches the area of business planning and predictive analytics.

Over the years, I have turned into an advocate for simple communication and simple approaches. My aim is to transport ideas in a simple way via this blog. Let me know what you think!


Categories
Various

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