Growth and Value

The sheer volume of data at our disposal can either bury us or propel us. It s our choice. To ignore our data resources is fatal. Truly sustainable growth is only possible if we are able to leverage resources more efficiently in order to make better decisions faster and less expensively. Productivity, return on investment, operating efficiency, or whatever name we choose to call it, needs to increase by orders of magnitude. To maintain a competitive edge requires constant, geometric productivity increases. Increases only achievable by unlocking the value of our information capital. Information ”clean, correct, complete, up-to-date data ”needs to be immediately and readily accessible to those who need it most, when they need it. Only then is the competitive productivity gain assured.

Bank of America

As early as 1989 Bank of America envisioned the day it would operate based on a single version of the truth. Instead of wasting time sorting through multiple sources of data, Bank of America envisioned using information as a new engine of growth. As the company moved from an acquisition orientation to a growth orientation, the focus shifted to finally realizing that vision of a single source for data. The task of cleaning and consolidating the disparate information sources in the company has just begun, but conservative estimates are that a 20 percent increase in productivity has been achieved already. That number is only going to look better as Bank of America continues to unlock the value of its information resources.

 

The growth trend is already there ”human productivity has increased dramatically over the past decade . Economists at the Federal Reserve have identified a direct relationship between increased labor productivity and rising share prices since the early 1990s. The bottom line is that we all want higher share prices. We want our success to be reflected in the market.

Experts Say

One Wall Street expert has argued that a company s share price is a brand unto itself, reflecting the value-creating ability of the CEO and the enterprise. Brand building is tough. We want to protect what we ve built.

 

Why is productivity increased when we begin to mine the value of our information capital? We gain control of decisions and outcomes . The result is increased efficiency and the kind of reliability the market recognizes. Boards and investors don t like surprises. Surprises disrupt the momentum of a company and can destroy value. The market rewards companies who deliver what they say they will. But change is a fact of life in today s complex business environment.

To rise to the challenge and the opportunity of change, we need to have a complete view of our company, a single view of the business. How? Have all our information in one place, in one understandable form, accessible to those who need it, when they need it to make the right decisions now. The technology already exists to make this possible. It is no more than the tool. The more important question is whether we have the vision to commit to using our information to drive growth. If we want to stay competitive, it isn t a choice.

Experts Say

There s been a paradigm shift in the way companies view their information resources. We ve moved from a view of dependence and utility to one of criticality.

Ed Glotzbach
CIO
SBC

 

Experts Say

At FedEx the information about the package is as important as the package itself.

Fred Smith
Founder
FedEx Corp.

Customers are the only reason a firm exists. And the best way to grow the company is to increase the value of each customer to the company.

Don Peppers and Martha Rogers
Founders
Peppers and Rogers Group

We were thinking about data before data warehouse became part of the vernacular. We resolved to look at information as a competitive weapon.

Martin Lippert
CIO and Vice Chair
RBC

 

Why base our decision-making on assumptions? We can know, not guess. And we can act now on the knowledge and information we have. Travelocity is already doing it.

Travelocity

When Travelocity heard that TWA had established a special low fare from L.A. to San Juan, Puerto Rico, it quickly identified all of its L.A. region customers who had inquired about Puerto Rico fares and e-mailed them the information the next morning. 25 percent of those e-mailed purchased the TWA ticket, or another ticket to the Caribbean, an astonishingly high direct-marketing response. Travelocity s information is earning high returns.

 

Every company needs to get holistic.

The speed and complexity of competitive decision-making requires us to have deep and immediate access to our information capital. Increasingly businesses are asking impossible questions: questions that draw on information from across a company ”market basket analysis combined with weather patterns; the most profitable locations for planes on any day given advance bookings, anticipated same-day passengers and the overbooking allowance; the profitability implications of delivering Package A late vs. Package B. Think of how many times we ve asked those kinds of questions and been told there was no answer, or if there was an answer we could have it soon next month, not now, when we need it.

The productivity breakthroughs are not going to come from running faster computers. The right technology is an essential tool, but it is never sufficient. The true breakthroughs come from more creative brains using our company s information capital.

Realizing the value in the brainpower of the knowledge worker is the real source of productivity breakthroughs and company growth.

Our information allows us to get closer to the customers, suppliers, partners , employees , various divisions in our company and ultimately the market. Information is our corporate sight. In a fast-changing world like ours it is critical to eliminate blind spots. The economy is changing. So is the way we do business, our competitors businesses and the geopolitical landscape. The market rewards agility. The best CEOs are managing the future.

Harnessing the horsepower of a company s information, or business intelligence, should be a closed loop system. The goal is to create a system that replicates the process by which individuals make decisions every day.

TDWI

Wayne Eckerson, Director of Education and Research at The Data Warehousing Industry, TDWI, describes it this way. A business intelligence strategy consists of a five-step cycle: gather, analyze, plan, act and review. This is the same process that human beings employ to make decisions.

The job of business analysis, Eckerson says, used to be the specialized responsibility of an elite group of analysts. Increasingly it is becoming a job for everyone. That means the information needs to be at everyone s fingertips. Feeding and managing the continuous cycle of gathering, analyzing, planning, acting and reviewing enables a company constantly to fine-tune the business intelligence process.

Every decision a person makes is based on the accumulation of all the experiences they have ever had. As experiences accumulate, a person subconsciously, or consciously, builds inner rules for dealing with a variety of situations. Each subsequent experience, decision and outcome feeds back into the process, enabling a person to reassess, refine or rebuild their inner decision-making rules, Eckerson says.

A human being s ability to act spontaneously, flexibly and yet wisely in new situations is simply the result of well-honed rules that have been refined through a lifetime of experiences. The ideal business intelligence system should operate the same way, Eckerson says.

 

Optimizing decision-making requires companies to make information available to those who need it now. Protracted historical analysis is only a start and is largely ineffective in this economic environment where speed and precision are valued.