Erich Stauffer

Category: Management

  • 10 Ways Businesses Can Use Analytics to Expand their Business

    Businesses have more information stored on their customers and their business processes than ever before, which adds complexity in trying to collect, manage and interpret data into information that can help guide a business to success. Here are ten ways to use analytics to handle this complexity.

    1. Get organized and get feedback.

    The first step to any goal is to get organized. This could be an entire post in itself, but put simply, get rid of clutter in your computer and on your desk. Obstacles like bad file management (on your desk and in your computer) can eat up valuable brain cycles and time. Second, know what your resources are. This includes people, places, and things. Third, know where you want to end up. Begin with the end in mind. And four, which related so the first, have a place to store the plan once you create it. If you’ve done this before and have templates, use them. If you’re comfortable with a specific type of software that can help you, fine – use it. But don’t mistake learning a new process for moving forward on a project. Only tasks that move the project forward can be considered ‘working on the project’. If you have no idea what business analytic tools to use or where to start, go on to idea 2.

    Web resources like Google Analytics can show you how far you’ve come in many customizable ways–number of visitors, sales goals, conversions, traffic sources, and top content. It can also tell you were your visitors are located, how long they stay on the site, which pages they enter and exit, and what day of the week they tend to visit. All of this information helps you know your visitors so you can improve their experience and improve your sales. Social places like Facebook, Twitter, & Youtube are also great places to get feedback from visitors on the products and services you offer. The more information you collect, the better your business will be. It’s true – content is king, but what you do with that content can make all the difference in the world.

    2. Look for business analytics tools that are easy to use, flexible, and support a wide range of roles.

    Usability and functionality—that is, business capabilities—stand out as manufacturing organizations’ most important considerations in selecting business analytics regardless of company size, individual role or functional area. These should be central focuses in evaluating tools. To be usable and functional, analytics systems must provide a range of options for how to include the information in presentations, which are increasing; participants indicated an interest most often in the standard charts, reports and tables. However, documents, visualizations such as gauges and sliders, text, Web pages and maps were also identified as important by one-third to one half of these companies. Determine which of these are important to your organization today and may be tomorrow.

    The most important capability for an analytics system is to make it possible to search for specific existing answers. Because anomalies are common in business, individuals need to be able to drill down to find underlying causes. The second-most frequently chosen capability is exploring data underlying analytics, also deemed important or very important by nearly three-fourths. The participants rated similarly (22 percent to 28 percent deemed them very important) four other capabilities: to publish analytics and metrics; to explore data by working with maps, charts and tables; to set alerts and thresholds; and to collaborate in the review of analytics. The most important capability is being able to source data for the analytics. Without this capability it’s difficult to compile meaningful analytics. Equally important is the ability to take action based on the outcome of the analytics.

    3. Prepare for growth by analyzing personnel.

    Most people who have primary responsibility for designing and deploying analytics have experience with sophisticated tools. About half the time, analytics are designed and deployed by the business intelligence department, a data warehouse team, or by general IT resources. Line-of-business (LOB) analysts are involved the least, but in some cases collaborate. It helps when IT and the (LOB) work together on analytics. One example is to document tasks and documentation for each item in a ‘process map’ so that you are prepared for if you need to split a role, hire, or outsource some or all of those tasks due to volume or an influx of new tasks. The LOB analyst can then begin building a ‘staffing model’ which multiplies task volume by average task times to anticipate future personnel needs and analyze current business practices.

    4. Assess the maturity of your business analytics.

    While the Ventana Research Maturity Index placed 12 percent of respondents at the highest Innovative level in their use of analytics, 60 percent are in the bottom half of the maturity hierarchy. In people-related issues, the index identified lack of skilled resources and lack of executive support. Process-related issues included taking longer than a week to provide metrics from analytics, formally reviewing metrics no more often than quarterly or annually and low prioritization and lack of budget. In information-related issues that negatively impacted business analytics use, the research identified stale, outdated and inaccurate information as well as failing to prioritize basic informational needs. In the category of technology, the research found immature technology that is not working, unsophisticated technology known to be ineffective and a failure to prioritize forward-looking and predictive analytics. These shortcomings all impede a manufacturing organization’s effectiveness and performance and all need to be addressed.

    5. Ensure business analytics are widely accessible.

    In Ventana’s overall research on business analytics, only one-third of senior executives and one-fourth of vice presidents, directors and managers have analytics always available. While it is true that a large majority of executives have most of what they need, this is insufficient for optimally effective performance. Almost nine in 10 manufacturing organizations regard making it simpler to provide analytics and metrics to those who need them as important or very important. Also keep in mind that doing this from mobile devices such as smart phones and tablet computers will only increase in demand; already more than one-third of participants said this is important or very important.

    6. Don’t let inferior data undermine use of business analytics and metrics.

    Business analytics should be about determining what is happening and will happen to an organization. Most time is spent waiting for data, preparing data, and reviewing it for quality and consistency. Conversely, only a fraction of time is actually spent on true analysis processes such as assembling scenarios, searching for causes, and determining how changes will impact current business. If these preparation obstacles could be addressed, the amount of time people work with analytics could be reduced. Take steps to ensure your source data for analytics is both fresh and correct; if it isn’t, you risk undermining the use of metrics and KPIs as business improvement tools.

    7. Replace spreadsheets as tools for business analytics.

    Spreadsheets are well established as a tool for analysis in organizations of all kinds and sizes, but they are ineffective for repetitive analyses shared by more than a few people. Spreadsheets are the tools companies most commonly use to generate analytics, business intelligence technologies (for querying, reporting and performing analysis), and analytic warehouses and databases, but while they may be familiar, organizations using spreadsheets least have more accurate, timely data—and they deliver periodic reports about 40 percent sooner. Organizations should limit the use of spreadsheets as data stores and for repetitive analyses, particularly in cases where the results are reported to and used by more than a few people. Their failings, limitations and necessary work-arounds undermine the needs identified by participants to simplify analytics and metrics and ensure technology usability in the process of producing business analytics.

    8. Understand the value of predictive and forward-looking analytics.

    Predictive analytics can give a business glimpses of what may happen, the consequences of actions and scenarios for how to respond to change. Technology has advanced to a stage where it is feasible to provide them to a variety of users in manufacturing businesses. Yet the research shows predictive analytics are not yet high-priority analyst capabilities for the lines of business (LOB) nor are what-if and planning-based analytics; each is deemed very important by less than 30 in the LOBs. Exceptions were contact centers, in which predictive analytics ranked second-most important, and supply chains, where they are third-most important. Finance departments are the least likely to use predictive analytics even though they could be widely applicable within this function.

    9. Resources must be adequate to enable investment in technology to make analytics easy to access and use.

    Driving change and addressing barriers require understanding the benefits of investments. Demand that vendors show how their products deliver clear benefits such as these and address issues such as total cost of ownership and return on investment that can help lower the barriers in your organization. Consider cloud computing for deploying for business analytics. Slightly more than half of manufacturing organizations still prefer on-premises deployment for business analytics, but the research found a significant preference for software as a service, or cloud computing. Consider evaluating if your organization is looking to avoid the effort and expense of having in-house technology resources manage your business analytics.

    10. Address barriers standing in the way of improving business analytics and performance.

    The most significant barriers to making changes in analytics are fundamental:

    • Lack of resources
    • No budget
    • A business case that is not strong enough
    • Too low a priority assigned to the effort

    To make matters worse, these barriers are interrelated. Failure to provide a compelling business case results in a project receiving a low priority and therefore not being allocated the resources or budget sufficient to implement the changes. And a failure to properly organize, begin with the end in mind, and forging on without gathering feedback, will all be obstacles in the way of having a successful project or business.

  • June 2011 Interest and Exchange Rate Forecast

    The June 2011 RBS Interest & Exchange Rate Forecast (PDF) is out.

    Interest Rates

    The Bank of England did not raise rates in June, despite higher inflation due mostly to commodity prices. In order to curb inflation, their Monetary Policy Committee (MPC) may raise interest rates, but it depends on the strength of demand in the United Kingdom.

    In the US, as quantitative easing (QE2) draws to an end, the Federal Reserve is turning to how and when it starts to tighten policy. The April minutes of the Federal Open Market Committee meeting indicate that it has a preference to lead with interest rate hikes, which would curb inflation, rather than begin unwinding its quantitative easing program (though options for this were discussed). RBS expects the Fed to wait until the first half of 2012 before raising interest rates.

    The European Central Bank (ECB) left rates on hold at 1.25% in June, but by using the code word “strong vigilance” President Trichet signalled a second hike for the year at the next ECB meeting in July. With inflation at 2.7% in May and above the 2% ECB target for six consecutive months, the ECB Governing Council will justify an increase in interest rates despite signs of a slowdown in the euro area. ECB President Trichet suggested the establishment of an EU Ministry of Finance with veto rights over member states’ specific spending decisions as a first step towards closer fiscal union. While this will be of little help in the fight against the current sovereign debt crisis, it may be an issue to be tackled by Mario Draghi (Italy) in October, who has received the support of France, Germany and the ECB to succeed Trichet as President.

    Exchange Rates

    The euro plummeted from 1.49 against the USD to 1.40 in mid-May – a two month low, while GBP/EUR jumped to 1.15. But much of the lost ground was regained with an outline agreement for further financial aid to Greece (though the outline fails to address the long term issue regarding the sheer scale of Greece’s debt burden). Moreover, the hawkish ECB continues to provide support from a yield perspective, signalling a second rate hike in July, while all other central banks sit firmly on their hands. The long term impact of rising interest rates could prove euro negative if it disrupts the recovery in the periphery economies, but this factor has certainly been supportive in the short term. The relative attractiveness of sterling and the dollar has been hit by softening growth/interest rate expectations and jitters over the size of the debt overhang facing these regions. With macro data pointing towards a further slowdown in UK and US economic activity, growth expectations have also been scaled back. Moody’s warned the UK that 16 banks could face a downgrade to its credit rating if a further slowdown in growth put the government’s fiscal austerity plans in jeopardy. Meanwhile, US policymakers continue to bicker over an extension to the Federal debt ceiling and a long term deficit adjustment plan. GBP/USD has been range bound between 1.60-1.65 for the past month and we continue to expect it to remain at these levels which also look to be close to fair value. JPY has appreciated against the USD and is approaching levels south of the 80 mark which triggered multilateral currency intervention in March.

  • Exchange Rate Forecast

    Exchange Rate Forecast covers European currencies like the Euro, currency converter forecasts, currency charts, American currency, African currencies, US dollar exchange rate history, long term currency exchange rate forecasts, cross-currency swaps, and balance of payment (BOP) exchange rates. If you’re not sure what any of this means, don’t worry, I’ll cover those things here on Ex-Forex. Exchange Rate Forecast was originally ran and created by the author of Economy Watch, which covers the world economy, investment, banking, and credit cards for Australia, Canada, India, Ireland, Malaysia, Pakistan, Singapore, South Africa, the United Kingdom (UK), and the United States (US).

    Many people search for exchange rate forecasts during the week to guide them on Forex, which is a decentralized over-the-counter financial market for trading currencies. This currency exchange marketplace assists international trade and investment, by allowing businesses to convert one currency to another currency, such as US dollars to British Pound Sterling. It also supports direct speculation in the value of currencies, and the carry trade (investors borrowing low-yielding currencies and lending or investing in high-yielding currencies), which is a form of speculation on the change in interest rates in two currencies.

  • Should Amazon.com Go Brick-and-Mortar?

    Those who remember walking into a Service Merchandise may recall the assortment of toys, electronics, and fine goods where the selection was larger because there was only one of everything. That’s because you ordered your item in-store and picked it up from a warehouse in the back. It was the pre-Internet version of Amazon.com and it could be Amazon’s next move.

    On May 15, 2001, Steve Jobs led a group of journalists from a hotel in Tysons Corner, Virginia to Apple’s first store in the second level of Tysons Corner Center for a commemorative press event. The first two Apple Stores opened on May 19 in Tysons Corner and later the same day in Glendale, California at Glendale Galleria. Around the same time Service Merchandise was going through Chapter 11 bankruptcy and by the beginning of 2002 they would be out of business. Apple now has over 200 stores and Service Merchandise is now online-only. So what can we learn from Apple’s success and Service Merchandise’s failure and what does it have to do with Amazon?

    Service Merchandise was a catalog showroom, which meant it showcased a lot of high-end goods and sold them to people who may not have bought them otherwise. I can remember salivating over their boomboxes and Casio watches, things I would never have been exposed to otherwise. This is how the Apple Store has leveraged their retail outlets. Apple used the iPod to get people familiar with Apple products and to come into the store. There they were exposed to Mac computers and any new innovation that came along (think iPhone and iPad). By situating themselves in high-end shopping centers, Apple made sure that the trend-setters were well taken care of and that is partly why there are sometimes more employees inside an Apple Store than customers. What if Amazon opened a catalog showroom in upscale malls around the country like in Glendale, California, Carmel, Indiana, or Manhattan, New York, and showcased their upscale goods – the ones they stock, but people don’t see – and helped change the way people think about Amazon from being an online bookstore or even an online version of Wal-Mart to being the best way to buy anything – including high end goods like watches and jewelry. Could a retail outlet store like Service Merchandise do that for Amazon.com?

    Let us know what you think in the comments.

  • My CEO Heroes

    I am going to write about a couple of my CEO heroes, Howard Schultz of Starbucks and Elon Musk of SpaceX and Tesla Motors.  Previously I wrote about my media heroes, which included two CEOs, Rupert Murdoch and Mark Zuckerberg, but when I classify ‘CEO’ heroes I value the entrepreneurial spirit and management style of Schultz and Musk in the same way I value the media empires of Murdoch and Zuckerberg.

    Howard Schultz

    Starbucks CEO and former owner of the Seattle SuperSonics, Schultz joined Starbucks in 1982 as director of Marketing after a sales trip to Seattle as a general manager for Hammarplast drip coffee makers, which Starbucks was buying at the time.  While working at Starbucks, Schultz travelled to Italy to buy coffee and noticed not only were they selling coffee, but espresso too.  He also noticed a new dynamic, one he would later embrace, “The third place,” after noticing Italians ‘hanging out’ at coffee shops all over the country.

    The Third Place

    The ‘third place’ is a phrase coined by contemporary sociologist Ray Oldenburg.  Oldenburg in 1990 that postulates that the third place is a term referring to a public place where people gather for the social satisfaction that they can’t get from the first two domains of the home and the workplace.  Oldenburg argued that the availability of such gathering places in America was lacking and so, inspired by Oldenburg’s observations, Schultz turned America’s ‘lack of place’ into a business opportunity encouraging loitering and turning Starbucks into a cozy home-away-from-home.

    The Great Experiment

    When Schultz got back from Italy he convinced the management team to add espresso to the menu.  They agreed to try it out in one store and although it went over well, the management refused to roll it out explaining that they didn’t want to get into the ‘restaurant business’.  Frustratated, Schultz started his own company to serve coffee, Il Giornale, in 1985.  Two years later the original Starbucks management team decided to focus on their Peet’s Coffee & Tea brand and sold the Starbucks name to Schultz and Il Giornale for 3.8 million.  Schultz renamed Il Giornale to Starbucks and aggressively expanded the brand across the United States.  In 2000 Schultz left the company, but rejoined as CEO in 2008, taking the company to new records in profitability.

    Elon Musk

    Co-founder of Paypal, SpaceX, and Tesla Motors, Musk is currently CEO of SpaceX and Tesla Motors in addition to being chairman of SolarCity.  Musk was inspired by Thomas Edison to solve three “important problems”: the Internet, space, and clean energy.

    His first company was Zip2, which Musk cofounded with his brother, Kimbal Musk. Zip2 was acquired by Alta Vista in 1999.  That same year Elon Musk cofounded X.com, which later merged with Confinity, which owned the domain, paypal.com. This helped him solve his first problem, the Internet.

    Paypal.com was originally used by Confinity for email payments by Palm users, but after 2001 became known for what it is today and X.com changed its name to PayPal.  Just one year later, in 2002, Ebay acquired PayPal and that same year Musk founded his third company, SpaceX. This helped him solve his second problem, space.

    Musk was still building SpaceX when he cofounded Tesla Motors in 2004.  He later became CEO in 2008.  Tesla Motors make all-electric cars, which use much less energy than traditional gasoline-powered vehicles.  Lyndon Rive, Musk’s cousin, founded SolarCity in 2006 of which Musk is chairman of the board.  Together with Tesla Motors, Solar City helped him solve his third problem, clean energy.

    In 2007 Musk won Inc.’s Entrepreneur of the Year award and his fortune is estimated at over 300 million dollars. This serial entrepreneur and father of five works 100-hour weeks and is passionate about what he does.  His passion is an encouragement to me and that is why is one of my CEO heroes.

  • A Day in the Life of a Business Analyst

    Boiling a business analyst’s primary functions down, you get the following:

    • conceptualize, visualize
    • troubleshoot, problem solve
    • research, mine data and reports
    • identify trends and patterns, predict
    • identify similarities and differences
    • interact with people, communicate
    • innovate and discover solutions to problems
    • create proof of concepts, write business cases
    • document procedures and implement solutions

    Here is a day in the life of a business analyst using some of these primary functions:

    Visualization, conceptualization, and problem solving approaches over a time have matured and are quite structured and repetitive (if done well). However, no matter how structured and repetitive your documents and processes are, the people you work with and report to will always be there to throw obstacles in your way – so expect it. The business analysts role is to confront these challenges everyday at work and constantly innovative to come up with a workable solution.

    A typical business analyst’s day usually contains complexity and challenges, which require an individual to conceptualize, design, research, and report on a variety of products and/or procedures. You may be presented with a question but no data, or data without a clearly defined question. An analysis cannot really start until both the question and the data set is clearly defined. I call this QDAR, which stands for:

    • Question
    • Data set
    • Analysis
    • Report / Revision

    This is similar to STAIR, which is:

    • State the problem
    • Define the Tools
    • Algorithm (procedure)
    • Implement
    • Revise

    Business analysts have to interact with people who have the data but are not ready to part with it for some reason. Maybe they are afraid of what you are going to do with it (such as use it against them) or maybe they feel like you are replacing them (“Hey, I’m the one who owns that data!”), so some social skills definitely come in handy.

    A lot of the time the work you are doing is up in your head. This means you may often look like you don’t have work to do. This is unavoidable, but some things you can do is to make active use of a white board and/or sheets of scrap paper on your desk as a way to look busy, but truly to make sure your ideas get down on paper.

    Some times you’ll lead projects even if you are not a project manager. This means you’ll have to collaboratively strategize, generate acceptability, and ownership. Getting all these people on the same platform and presenting the idea through their perspective while keeping everybody’s attention is one of the hardest parts and primarily what your function will be along with organization of the project.

    Before beginning any big endeavor you’ll want to create a sort of proof of concept (PoC) document. Don’t get too caught up in formalities here. This report is for you as much as your boss to help guide you through the project or task. You’re more than likely going to be working on more than one thing at a time and you’ll likely get pulled away long enough to forget your ideas about the initiative so get th plan down on paper while you can. Use the STAIR acronym if it helps. If there are Business Requirement Specifications (BRS), include those in the document too.

    Once the plan is in place, revised, and approved, it’s time to start implementing. Execution may be the easiest part, but sometimes is the hardest to do because its not analyzing, it’s work. If you’re making a system change, be sure and use change control processes, and when you are done, test, and review. Finally, report on the initiative, get feedback, and move on to your next assignment. You’ve just had a productive day!

  • Innovation Comes from Customers

    Innovation comes from customers…or so Harvard thinks.

    Aha moments rarely come without some sort of problem you are trying to solve and there is no greater ‘problem creators’ than your customers. Twitter is a perfect example of this. They will think of things you never thought of and use your products in ways you’ve never imagined. Learn to harness this phenomenon and you’re on your way to having a more innovative company.

    For example, imagine you have a customer who wants software that allows appointments to be setup online. “No one has it” he says, but he wants it. So an innovator would make it, have it made, or find it, and then package it and sell it to other sites. That’s how innovation from the customer makes your company more innovative.

    But you have to execute.

    It’s easy to create a plan, the hard part is executing it. One trap a lot of companies (people) fall into is creating the structure around innovation or a new project in the hopes that once the structure is in place the new product will almost make itself. “After [that] it’s just ‘plug and chug’,” they say. Executors know that you have to do the plug and chug part too even if that means hiring out or outsourcing to do so. The plug and chug-level work should be a matter of following procedures in a well-defined structure. The creators, designers, and innovators at a company usually like to create the structure, but have trouble filling it in. Either learn to get around this psychological gap or find someone else to finish/maintain the job for you.

  • Life After HTC’s Hero: A Review

    Going Off the Grid

    Now that I have used my HTC Hero I realize that I am more plugged in than I have ever been. Not only is data being collected on me from phone, email, and Internet use, but I am freely giving up more information on Facebook, Twitter, and Tumblr. But I wasn’t satisfied with the amount of data being collected so started collecting more data using Endomondo and Facebook apps on my GPS-enabled phone, the HTC Hero for Sprint. Every since I got this phone with unlimited Internet access, I have been more plugged in than ever before. The New York Times has a great article on this called The Data-Driven Life. My friends have started to comment on the uptick in wall posts on Facebook and I’ve started to get caught back up on email, but I’ve also increased my risk.

    Physical Risk

    Now, more than ever I use my phone while driving. If texting makes you 8 times more likely to get on an accident, what is the odds for someone filming and posting videos to YouTube from the road? There is also the minor strain on the wrists from using the mobile device more and in more situations.

    Financial Risk

    Because my phone has always-on Internet access and unlimited text messaging there is nothing to stop me from using the phone at work. Checking Facebook is an issue that I have found that I have and texting with my wife can happen a lot depending on what she is doing that day. The bible says to be a slave to your master; serve your employer well while you are at your job. Being a good steward of your time is part of that.

    Conclusion

    So now that I’m in, am I wishing I was out? I do like the new features of the phone like weather information, Facebook access, and the qwerty touchscreen, but its just another thing in my life I have to maintain and manage. Like this site, I need to learn to better manage my actions while driving and while at work so I don’t get forced off the grid.

  • How to Successfully Manage People

    How to Successfully Manage PeopleThe purpose of How to Successfully Manage People by Jon Anshutz is to give you a better understanding of what it takes to effectively manage people. “How To Successfully Manage People” is a complete guide for managing. Anshutz goes out of his way to teach you the skills you will need to get the most out of your people. If you are serious about getting the most out of your people then you need to buy this book because it will show you how to create a “family” type atmosphere, how to set goals for yourself and your team, and so much more. No manager should be with out this book.