Information Systems and the Power of Focus

By Jerome Prescott

Business Intelligence is routinely touted by software vendors as a saviour in this tough economy, and it can provide measurable value. Yet, more often than not, it simply reinforces outdated management practices.

More than any other factor, studies in human behavior have shown that a person's focus ultimately shapes his or her destiny. Where are your people focused? Is it important and will it make a difference in the long run?

The best investment your company could make may be to reduce the number of reports and options available. Your data warehouse may actually be distracting users and negatively impacting your entire company.

Does this sound dramatic? Maybe, but the real story below shows the power of focus and business intelligence.

Years before the phrase 'business intelligence' was invented, a CEO and VP of Manufacturing asked me to work with their machine shop foreman to address problems that were shutting down the final assembly lines at huge cost to the company. They needed help quickly and wanted me to find a solution.

So I went out to the machine shop to speak with the foreman. He told me that he was receiving reports but they weren't helping. He explained that they could keep up with the production lines if they knew exactly what parts needed to machined for each of the next three days. If they could get a couple days ahead of the production lines, they would be fine.

I saw an inventory control person on the floor and together we walked over to the purchasing manager's office. He told us everyone would love to have a firm three-day schedule. With 3 days advance notice, they could adjust to just about any situation and keep the production lines running.

So I went back to the VP and told him about a firm 3-day production schedule. It seemed everyone agreed that this was the most important KPI in the business (though the term hadn't been invented yet). That meant everyone, including IT, needed to make a commitment and make it happen.

So I sat down at the computer with the production control manager and made sure we had a suitable process in place. I then set up a batch job to run an existing program three times in succession and stored the results, followed by a query that output the netted quantities in three columns on a simple report.

From then on, every day the foreman would retrieve the report and tell his people - "If there's any quantity required in Day 1 then build that right away. Then build Day 2, then, if you still have time, build Day 3 and then if you're done with everything, come see me." By the end of the first week, most of Day 1 showed as zero. Within a month, most of the quantities in Day 2 were zero and things had settled down.

What was the ROI of our project solution?

The following year, a group of Japanese businessmen toured the plant with the VP. They were quite impressed by our just-in-time inventory system. Not long afterward, an announcement came down that the company was being acquired by a Japanese conglomerate.

Most of the executives enjoyed an early retirement. A great example of how an entire company met an important objective by asking good questions and acting on the answers they received.

About the Author:

Give your employees the upper hand to achieve operational excellence and gain a competitive advantage. Our BI Roadmap Accelerator is a new alternative to the typical approach. You will reduce your BI spend and get much more in return.

Tactical Business Intelligence For Mergers And Acquisitions

By Jerome Prescott

A merger occurred between two North American manufacturing companies. They were able to unite forces to bring unique value to the construction, transportation, materials handling, and agricultural industries in Canada and the United States.

As a multinational firm which has undergone mergers and acquisitions, the new company had multiple and disparate IT systems. They were seeking a more simple and timely way to access business data and improve its decision-making process to successfully serve customers in North America, Latin America, Europe and Asia.

Further compounding the problem was a disparity in business models of the merged entities. Dealing with multiple systems was causing confusion and tremendous overhead on their employees. Not to mention the reduction in quality of service provided to their customers.

To the Rescue - A BI Bridge and Gasket Solution

It was determined that datacubes could be developed to combine data from the different systems, including Excel, that would allow users to create overlays of data for a consolidated view of profits and sales across business units. We refer to this as a Bridge.

Not only did this approach accelerate their ability to analyze important information, it also reduced the current IT report backlog. Users were empowered to mine the information to meet their own reporting requirements (the 'gasket').

Discovery of Outdated Business Practices

The Business Intelligence solution provided other benefits. A user analyzing the datacubes discovered that customers that bought on-line were paying full price while phone orders were often discounted. A decision was made to restrict the discounts available for certain items. This immediately drove profits higher as on-line ordering increased and profit margins were restored.

China Sourcing and Business Model Reversal

In the past, sales were forecast based on key attributes including customer group, geographies, product classes, and related criteria. Over time the accuracy of the forecasts was steadily decreasing as more and more products were sourced overseas, particularly China.

As more and more products were sourced overseas, the purchasing options for end customers increased. Often there were similar products offered by Chinese suppliers that were only slightly different from similar products sourced in North America.

While this supplier substitution delivered a new competitive price and quality combination, it created havoc with customer forecasts effectively reversing the business model from customer driven to product driven. Forecasts became useless over time.

The BI Bridge and Gasket approach provides the means to identify and understand problems caused by a transition from customer-driven to product-driven forecasts. This is another example of how rapidly deployed solutions based on current and focused business drivers help companies in competitive industries.

About the Author:

Discover how focused analytics for business mergers will reconcile unrelated systems and help your company better manage multiple business models. Our BI Road Map Accelerator offers a try-before-your company-buy alternative for immediate, tangible results.