Archive for the ‘Data’ Category

Does Your Firm Suffer from Information Disadvantage?

In many of our client assignments, we’ve been challenged to solve significant information gaps. Managers understood that they were significantly behind their competitors in leveraging information, but they didn’t really know where to start in evaluating their deficiencies.

We came up with a scorecard methodology to evaluate 5 key areas that make up an information platform. We approached the evaluations party on how well the information platform was built, but also partly on whether what was being built and used was aligned strategically with the goals of the organization. The 5 key areas are:

Info Disadvantage - Chart

1) Information Capture: how information gets captured or procured. Is the firm capturing the right internal information from their systems or personnel, and are they procuring the right third party data?

2) Data structuring and integration: how well the data is organized, structured, and integrated with other information within the firm. Are the data from different sources brought together to complement each other and matched so that similar information is well mapped and accessed together (for example information about a certain client)?

3) Data availability: making the data made available for review and analysis. Are tools built or made available for analysts and data scientists to explore the data?

4) Information context: enriching data and creating metadata to give more meaningful cuts and views of information that is more relevant to managers. This is related to the data structuring  point above, but differs in that much of this context is business-specific and in many cases need to be defined by the business, specifically product and sales managers. Are there consistent and global definitions in order to make sense of the information, for example consistent definition of products and regions?

5) Information delivery: creating tools for managers and salespeople to access, receive, and interact with their information so they can use it to enhance their business. Are these tools easy to use, intuitive, fast, and up-to-date.

Half-Baked

What’s interesting is to note how many of the client’s past projects have identified and attempted to expensively address deficiencies in one or two of the five key areas but have often rendered sub-optimal results because problems in other areas were not addressed. In a lot of instances, for example, large investments have been made in information delivery, creating front-end tools to dress up information, but lesser investment in cleaning up the structure of the underlying data or not procuring 3rd party data that could add significant value to existing data.

Firms need to strive to realistically evaluate their platforms in all five fundamental areas and make sure that they understand, and invest strategically, in each of those areas. The knee-jerk response by managers is to argue that it would be prohibitively expensive to address the build-out of the entire platform. Our response is that you don’t have to build out all the areas in full and and they don’t have to be done at the same time. If you target certain specific deliverables that involve development across all five areas, you approach this problem more cohesively and inter-dependencies become much clearer. Also this will most likely be a multi-year project, so it should be planned and invested as such. The project also should be designed to include an element of flexibility to allow for evolution of requirements as the business changes over time.

With this broader approach, an organization can ensure that projects they embark with will be more successful and valuable to the organization.

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CRM System: Buy or Build

LobbyEvery client-centric organization needs to adopt a CRM system of some kind. Many managers realize the clear value of a CRM system will have increasing productivity, institutionalizing client relationships, and providing better management intelligence about their customers and sales teams. The challenge then becomes deciding what kind of system they want to to have, leading then to an overwhelming series of options that are available to them.

Technology groups embedded within organizations large enough to have them, will be inclined to want to build their own system rather than rely on an off-the-shelf solution. They are ‘developers’ by trade. Most organizations though will opt to adopt a vendor product. The minute that managers begin the investigation process on vendors, they get quickly overwhelmed with options, benefits, and features. Often they feel that to get what they really need, they should just hire an unassociated group of developers to build them their optimal system.[more…]

Managers end up unsure as to what the ultimate solution should be. A CRM system decision is one that managers must live with for a long time. They want to make sure they are making the right call. I’ll outline some key considerations when making the decision of buy or build their system

1) How unique and complex is the organization’s business model, and ultimately their information model?

2) What is the organization’s capacity to support and enhance an internally grown system?

3) Of the available vendors, are their any that specialize in workflows and requirements of an organization’s specific industry or sub-industry?

4) How financially stable are the vendors that provide solutions to the organization’s industry?

5) Are there consultants or subject matter experts available internally or externally that can function as trustworthy and unbiased advisors who can help navigate the options?

Pros and Cons

Custom built solutions allow for the greatest flexibility for specific requirements, especially if there are particular nuances related to an organization’s unique business model or market differentiation. Custom solutions also have more agility to integrate with already existing systems and data. They provide the potential for the biggest competitive advantage. None of your competitors will have this tool. The biggest downside, of course, is cost. Firms will need to commit capital for the build-out, plus a ongoing costs for enhancements and support.

Vendor solutions will in most cases provide the majority of requirements if industry-specific solutions providers exist, and for most financial sub-sectors they certainly do. Most are out-of-the-box so require very little configuration. The challenges come when a firm has specific things they want to do, but are constrained by the technical limitations or development schedule of the vendors. It’s hard to get a clear understanding what the true advantages and disadvantages are with just direct engagement with the vendors. Their demos give very little insight on what their deficiencies are, or which vendors are better than others.

There is no one simple answer to whether it’s better to build or to buy. Each organization is going to have their own unique CRM and information requirements. If there isn’t in-house expertise, we highly recommend finding someone who can help navigate the waters.

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Velocity of Information

Photo Aug 28, 5 26 15 PM (2)An interesting concern that we often have to address is the worry that manager and salespeople risk being overwhelmed with information. Most people can barely keep up with their existing information flow. What would new screens and automated emails do to their inboxes?

We discourage people from looking at information as a collection of valuable pieces of data that have to be stacked and reviewed, like a stack of magazines. We think it more like a river of information that doesn’t need to be read every time it updates, but rather the flow increases the perceived proximity to the most current information.

Proximity of Information

“Proximity” is the operative word. Decision-makers at all levels need to feel that the information they need is close and easy to acquire. This could translate to several different delivery scenarios depending on factors such as sophistication of the userbase, technology available, volume and rate of change of the information.

The analogy that we like to use is that information is the lifeblood of any dynamic organization, so if information flows at the pace of molasses, the organization will stagnate. What’s interesting about this perspective is that we are actually striving to reduce the value of a single given piece of data crossing someone’s desk. An email with a snapshot of revenue information that is only made available once a month, for example, is going to be held at higher value relative to a weekly or daily revenue alert with the same information.

Understanding Molasses

What holds information from flowing more quickly isn’t bad intentions, even though this tends to be an often cited cause.  It’s usually a combination of legacy behaviors ingrained in people’s habits and routines, as well as embedded hierarchical structures and legacy technology issues.

Because it’s a combination of things, not just one, it’s difficult to find one simple solution. By tackling only technology, for instance, and not addressing the other institutional obstacles, the promise of realizing higher information velocity may not be realized.

Getting everyone comfortable with the idea that what matters is increasing data flow is critical to dislodging information and weakening the molasses.

People need to feel that they can easily dip into the information flow naturally and not stress about “missing” or “losing” critical data points. Increasing information “velocity” increases the ease in which people interact with knowledge within their firm.

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