IT Strategy

Management by Analytics?

Raj Sheelvant — Tue, 09 Mar 2010 03:15:45 +0000

Economist article titled “Clicking for Gold” reports on how the internet companies profit for data on the web. The article notes that traditional businesses generally collect information about customers from their purchases or from surveys, internet companies have the luxury of being able to gather data from everything that happens on their sites. The biggest websites have long recognized that information itself is their biggest treasure. And it can immediately be put to use in a way that traditional firms cannot match. The article points to how eBay, Amazon, Google, Facebook and other internet companies are successfully using the user data to better understand their customers.

But there is a growing consensus that data mining can help organization make better management decision. New book by Thomas H. Davenport titled “Analytics at Work: Smarter Decisions, Better Results” tries to provide some tips on how companies can take advantage of advances in analytics to improve business management (I have not completely read the book yet). They show how many types of analytical tools, from statistical analysis to qualitative measures like systematic behavior coding, can improve decisions about everything from what new product offering might interest customers to whether marketing dollars are being most effectively deployed. In their previous book “Competing on Analytics”, Thomas Davenport showed how pioneering firms were building their entire strategies around their analytical capabilities.

Data mining and analytics is new area and Mr. Davenport makes a compelling case for management to use data smartly to make strategic decision, I think depending on ‘data’ to make all the management decision is not wise. Remember how the new breed of data ‘guys’ at Wall Street were going to manage ‘risk’. Read last year’s Wired Magazine article titled “Recipe for Disaster: The Formula That Killed Wall Street” on how the Quants – brainy financial engineers- almost destroyed global banking system. This is also the gist of the book by Scott Patterson WSJ staff reporter titled “The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It”. See his interview on Bloomberg below.

Agreed, companies mentioned in the Economist article will not bring the entire economy down by thier reliance on data, but if they depend on the statistical data alone to make strategic decisions then there is a possibility that they may miss cues on macroeconomic impact, competitive threat etc. It’s OK to adjust the business strategy based on analytics but I don’t think companies should base their business strategy solely on the analytical data they are gathering.

What’s the role of IT Business Analyst?

Raj Sheelvant — Wed, 03 Mar 2010 01:58:00 +0000

In a blog post by Kristen Caretta titled “Do You Need a Project Manager and a Business Analyst?” writes that organizations of all shapes and sizes are considering not just a strong project manager to lead their efforts, but also a business analyst to guide the content of those efforts.

So how does the role of Business Analyst differ from that of Project Manager? Kristen notes that the Project managers focus on all of the management efforts involved in completing a project — communications management, resource management, financial management, schedule management — all of the different aspects involved in project execution. Business analysts, on the other hand, focus on the content of the project — gathering requirements, understanding the business needs and expectations and translating them into a language both IT and the business will understand.If the project was completed on time and on budget, but the business customers are not completely satisfied with the results, then the role of business analyst becomes critical. In other words if the IT solution does not map the business need then its a marker that the project needs a business analyst. The business analyst is somewhat of a liaison between IT and the business.

It’s good to see a distinction made between the project manager and the business analyst. I think there are certain gaps in an IT project that the Business Analyst can fill. The business analyst needs to have clear understanding of the customers’ business. The business analyst not only should document the current business process, but should be empowered to challenge and simplify the business process. The customers being too close to their problem domain may not see issues with their business process. Business Analyst should be able to provide an unbiased perspective to the customers to simplify and streamline their business process. This is, in my opinion where business analyst can add tremendous value to the successfully implementing a software system.

Borderless Innovation

Raj Sheelvant — Sat, 20 Feb 2010 17:44:36 +0000

Many of the world’s top multinationals have been leveraging the latest technological developments, their expanding global business networks and even competitors’ expertise to change the way they harness new ideas. But while these tools may make global collaboration easier than ever, there’s plenty of work left to do to make “borderless innovation” deliver, according to Knowledge@Wharton article titled “Borderless Innovation: Stretching Company Boundaries to Come Up with New Ideas”.

Although the collaborative technology has reduced the barriers for borderless innovation, old corporate structure that creates silos acts as impediment towards achieving the goal of borderless innovation. In addition to this ‘internal’ challenge there is one other external challenge that is -Differing national and ethnic cultures.

The article comes up with several models to transcend both the internal and external challenges:

The Orchestra Model, which is highly structured and centralized. It is typically focused on upgrading an existing product or service that dominates a market, with tightly controlled ownership of intellectual property.
The Creative Bazaar Model, which is based on leading players in a particular market that want to acquire new ideas from small companies or individual inventors in order to broaden their range of products and market position.
The MOD (“MODification”) Station Model, in which ideas come from a broad, global community, with the goal of coming up with new uses for existing products.
The Jam Central Model has the loosest organizational structure and mission, often involving experts asked to solve problems that might not fit well into a large corporate profit strategy.

This article points out correctly that understanding local customers is an important challenge to overcome to achieve border less innovation. Geert Hofstede’s ‘Cultural Dimension’ is very relevant in this next phase of Globalization. I think the companies need to develop ‘Cultural Intelligence’ in order leverage borderless innovation.

Millennials’ Impact on Organization Structure

Raj Sheelvant — Thu, 18 Feb 2010 02:12:26 +0000

Accenture High Performance IT research program titled “Jumping The Boundaries Of Corporate IT“, which surveyed 5,595 students and young workers in 13 countries. It uncovers how the Millennial generation uses technology and confirms the Millennial archetype—global citizen, eager adopter of new technologies, willing to improvise to get the job done—but identifies regional differences for CIOs eager to create a technology environment that enables high performance. Click here for an interactive map showing Millennials’ profiles by country.

The study also finds that these millennials have different skillsets and approaches for solving problems and this has a far reaching implication on the corporations. Information Week article titled “Global CIO: Accenture Millenials Study: The IT Revolution Has Begun” points that “As businesses return to growth mode and start hiring in substantial numbers, they will once again face intense competition for certain skills and top talent. Millennials will be the bulk of new hires over the next two decades, so conventional command-and-control cultures could be at risk in this regard.” Since the companies will heavily depend on these young workers with new ideas, new expectations, and new attitudes, the organization culture has to change. With collaborative mind set, these millennials’ will not be able to function optimally within the current organization structure where innovation plays central role in fostering growth. Decentralized innovation is the future. The Information Week article further states that “Millennials are more intimate with technology than any previous generation. Even high school interns can now add value. Companies that figure out how to tap younger workers’ tech savvy and listen to their ideas in a productive way will likely enjoy an increasingly strong innovation-based competitive advantage. CIOs need to be able to see the massive potential and encourage an environment of shared learning that enriches both traditional workers and the new-wave Millenials. It’s not unlike lots of other revolutionary impacts on the IT world that CIOs have had to learn how to master—except that the stakes might be higher.”

The gist of the study is that the companies are dealing with a generation that’s incredibly knowledgeable and sophisticated about technology and a generation that’s grown up never known anything but ubiquitous, instantaneous, wireless connectivity to everything. It’s imperative that the companies change to take advantage of this new generation.

Crowd Sourcing Business Process Improvement

Raj Sheelvant — Sat, 13 Feb 2010 22:34:34 +0000

Essay in McKinsey Quarterly titled “Using knowledge brokering to improve business process” pose a challenging concept about the possibility of using of open-innovation principles to enhance not only the company’s products but also their core internal business processes.

The article defines Knowledge Brokering as “a systematic approach to seeking external ideas from people in a variety of industries, disciplines, and contexts and then of combining the resulting lessons in new ways” and states that smart companies have started to take advantage of it. Open innovation is changing the face of product development as more and more organizations find clever ways to use Web-based technology to pair internal “seekers” with external “solvers.” Same can be used for Business Process Improvement.

The essay says the companies can bet more out of open innovation if they use the following 4 steps

Analyze the ‘problem space’: If the problem is too high level or complex, few potential solvers will have the experience to address it. The goal then is to ‘chop’ the problem into multiple manageable outcomes.
Evaluate brokering communities and choose experts: Cast an appropriately wide net. Teams should pay particular attention to companies or sectors that have experienced the problem recently or where all industry players must excel at addressing it.
Engage brokers to extract ideas: The most effective way to draw out this kind of information is a structured approach that follows a few simple guidelines. First, the whole project team should listen to a knowledge broker because the probability of a breakthrough increases with the number of listeners, each with unique experiences and viewpoints.
Incorporate the new ideas into a change plan: The final step is for the team to incorporate the ideas into an implementation plan for a new process, which doesn’t have to be flawless—just significantly better than the existing one.

2010, The Year of IT Project Managers?

Raj Sheelvant — Wed, 10 Feb 2010 01:43:09 +0000

Kristen Caretta blog titled “Rise of the middle managers: Jobs in IT project management still hot” in CIO Symmetry points to Global Knowledge survey, jobs in IT project management are the hottest positions for the year 2010. The businesses are turning to IT to maximize investment and enable innovation and thus is putting new importance on the IT project manager to make sure those investments truly pay off. She also writes that the business is in search of a role to bridge the gap between the technology and the needs of the organization. She says that specifically CIOs are looking to IT Project Managers to fill that role.

Kristen points to the survey by SearchCIO-Midmarket.com, 30% of the respondents (all IT managers, directors and CIOs from midsized organizations) spend most of their time on project management. Thus, the rise of the middle manager is happening as the project manager finds a new place in IT – helping to make sure that technology is not just being pursued for the sake of more technology, but that it’s also moving the company forward.

IT Project Managers are going to play a central role in making sure IT and Business is aligned. It’s about time. IT Project Managers need to transcend the typical role of completing project within time and within budget. Now, they need to challenge the scope and purpose of the project. They need to understand the relevance of the project to the business. In other words, IT Project Managers need to have a strong background in understanding Business Strategy. See my view on critical additional skills required by IT Project Managers in my blog titled “Evolving Role of the IT Project Manager”

Long Tail of Manufacturing

Raj Sheelvant — Tue, 02 Feb 2010 01:39:08 +0000

I am back from sabbatical. It’s time to start blogging on IT Strategy. Well, I read interesting article in Wired “Next Industrial Revolution Atoms are the New Bits” by Chris Anderson (of Long Tail Fame).

Chris writes that “Transformative change happens when industries democratize, when they’re ripped from the sole domain of companies, governments, and other institutions and handed over to regular folks. The Internet democratized publishing, broadcasting, and communications, and the consequence was a massive increase in the range of both participation and participants in everything digital — the long tail of bits. Now the same is happening to manufacturing — the long tail of things.”

Very astute observation on how the next Industrial revolution will involve mass customization is might be happening in a garage next to yours. With the cost of 3D printing, prototyping continuing to fall, number of small companies can now enter Manufacturing space. Chris writes that when the monolithic industries fragments in the face of countless small entrants leads to lowering the barriers to entry and the crowd pours in. Same phenomenon of crowd sourcing that revolutionized Web (Web 2.0) has started to happen in Manufacturing (Manufacturing 2.0). Using the collaborative tools, experts, prosumers and hobbyists can be leveraged to build niche products. Same web technology gives one an access to customers worldwide.

The other factor that has accelerated the move to Manufacturing 2.0 is the economic crisis/credit crisis of 2008. It has, according to the article, triggered an extraordinary shift in the business practices of (mostly) Chinese factories, which have become increasingly flexible, Web-centric, and open to custom work. This in turn enables ‘one man’ manufacturing clients to custom build their innovation.

We now have a perfect recipe in place for Cottage Manufacturing Renaissance!

Gone Fishing… Back in February 2010

Raj Sheelvant — Tue, 08 Dec 2009 23:19:26 +0000

I am on Sabbatical for couple of months. I am taking some time off for R&R. I am doing some traveling, catching up on my reading and learning to play tabla. I thought I would be able to blog on IT Strategy during this time off. But I guess I am having too much fun to post thoughtful blogs. I will start blogging regularly after I am back from Sabbatical in February 2010. In the mean time I will check my email periodically and if you are interested in writing a guest blog, you are more than welcome. Please send me your blog post (it should relate to IT and Business Strategy) and I will upload it.

No related posts.

Next Gen Business Intelligence Tool

Raj Sheelvant — Mon, 09 Nov 2009 20:33:15 +0000

Information Week’s article titled “Next-Generation Business Intelligence” (you can download the pdf by clicking on the link here), highlights the new breed of Business Intelligence (BI) tools). The article correctly notes that the next generation of BI technology is still evolving and comes with plenty of risk. Prediction typically requires statistical expertise that’s scarce and pricey. Real-time monitoring of stream processing technology can be a lifesaver, but only if end users can respond as quickly as they detect opportunity or risk. Fast in-memory-analysis tools are selling briskly, but they may require companies to pony up for higher-performance 64-bit hardware.

“Real Time” data as marketed by BI vendors seldom mean subsecond or even subminute response. But there is increased latency from previous generation of BI tools. Low-latency BI, faster business activity monitoring, and ultra-low-latency complex event processing are all examples of stream processing technologies. They typically include instant alerts so people can react when a particular threshold, event, or pattern is seen. But at these speeds—anywhere from a few seconds for low-latency BI to milliseconds for complex even processing—most companies also need to couple low-latency insight with automated response. With software-as-a-service options, BI doesn’t always require the months-long distraction of building a data warehouse or a new data mart application, something particularly attractive for small IT shops.

See the survey result below which puts fast data exploration and ease of implementation as the top two priorities.

IT Strategy Survey Results

Raj Sheelvant — Thu, 05 Nov 2009 01:13:27 +0000

Results from the IT Strategy Survey are posted below. This survey was conducted by Ivo Velitchko (read more in my blog titled IT Strategy Survey).

Out of 104 people who responded 80% of you thought that the topic of IT Strategy in the past decade has been increasing. Good to know!