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The Case for Business Intelligence

Business intelligence is increasingly becoming an integral part of organisational culture. It is no longer a ‘can have’ but a ‘must have’. That’s because in a data-driven economy, it gives decision-makers across an organisation the ability to harness data, draw insights and come to meaningful conclusions.

Monique Verduyn

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According to Gartner, business intelligence (BI) revenue is set to reach more than $17 billion by 2016. That’s because there is a drive to enable the entire organisation with fact-based decision-making tools, rather than just a few stakeholders.

Globally, organisations across all industries are embracing solutions that aid them in converting information into intelligence.

SMEs need to rise to the occasion and take advantage of the opportunities that BI represents. That’s the word from Nick Bell, CEO of BusinessIntelligent, a provider of business intelligence and application development solutions in South Africa.

“With the global economy in the state it’s in, companies need to make the right decisions the first time,” says Bell.

“They cannot afford to be reactive because their competitors will step in and take control of the markets they play in. To improve competitiveness, they need to enable their people to make better quality decisions – that is what BI is all about. It makes a business predictive, proactive and informed.  BI deployments aid revenue growth and foster competitive advantage.”

Bell says the uptake of BI in the smaller and mid-tier space has been sluggish in South Africa because it’s still misconstrued as being too expensive. However, companies that value information and organisational insight are seeing the opportunities that BI has to offer and they are willing to invest in decision-making tools.

Business analysis first

The process should always start with business analysis ­– defining needs and recommending solutions that deliver value to the organisation. This is a specific skill that is usually best brought in from outside the business.

It involves locating all the master data, which is information that is key to the operation of a business, fetching it and making it more accessible through technology like dashboards.

An in-depth understanding of the business identifies what drives the specific organisation, and what is needed to make improvements and ensure competitiveness.

A business intelligence dashboard, which is really a data visualisation tool that displays the current status of metrics and key performance indicators (KPIs) in an organisation, consolidates and arranges numbers and metrics on a single screen.

They may be tailored for a specific role and display metrics targeted for a single point of view or department. The essential features of a BI dashboard include a customisable interface and the ability to pull real-time data from multiple sources.

Then actionable data

One of the issues impacting the availability of information in the organisation, says Bell, is that most systems – like ERP, CRM and accounting, for example – are designed with processes in mind, not reporting. They contain data, but they are not designed to empower users with information.

“BI leverages the strength of your existing systems and gives you the power and the capability to turn that data into actual information. If you have determined where you want to take your business, BI reports can enable you to achieve those goals by enabling you to understand what you need to do to get there.”

It gives the business the ability to answer a question like what do we need to do on a daily, weekly or monthly basis to drive revenue? When it comes to your team, they can get access to information that will change the way they think about the business.

Read Next: Meet the Gaming Enabler

Improving efficiency 

Bell had a customer in the packaging industry who wanted to improve the efficiency of the picking line. Of all warehouse processes, order picking tends to get the most attention as the cost associated with picking is a big chunk of the total warehouse labour budget. Another reason for the high level of importance placed on order picking is its direct connection to customer satisfaction. The ability to quickly and accurately process customer orders has become an essential part of doing business.

Key objectives in designing an order picking operation include increases in productivity, reduction of cycle time, and increases in accuracy.

Productivity in order picking is measured by the pick rate. In Bell’s customer’s case, providing reports on productivity for the people in the pick line would not have been appropriate.

“Instead, we completed a business analysis exercise and then used the information to build a visual solution. We placed TV sets in the warehouse which broadcasted workloads and performance levels of teams and individuals during each shift, and used these figures to set bigger targets. The warehouse was transformed into a competitive environment, in which teams and individuals were challenging each other to do better. Within a month, performance had doubled.”

That was achieved simply by being able to access the correct information – if you know how many items or cases are being picked every day, and how many have to be picked in order to double or treble productivity, you have a goal to work towards. The end result is vastly improved efficiency, leading to lower costs and higher profitability.

Bell says that when a business takes the opportunity to look at the costs of BI versus the return on investment, it ceases to be a grudge purchase. “People are shocked when they realise the massive value and performance optimisation that BI can yield.”

Empowering employees is key

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There’s another aspect to BI that should make business owners sit up and take note. Many smaller and mid-tier companies fail to empower their employees with information. Often, critical business information is the preserve of a select few – usually the owners and a couple of other people at the top.

“Rolling out a BI solution that gives the right people easy access to data and key reports has the effect of empowering more people in the business to make an impact. Again, it’s an exercise that reduces the cost of insight and the speed to access, while improving business processes.”

Bell explains that without BI, companies tend to drown in information, while being starved of intelligence.

“Data is redundant unless it can be analysed and converted into understanding that drives fact-based decisions. In today’s organisation, insight creation as well as decision-making is not just dependent on an individual or a department. Every member is an integral part of this process. With this shift in the organisational landscape, it becomes imperative that everybody is able to not only get the data, but also to analyse, slice and dice it, and collaborate that information within the organisation.”

This democratisation of data demands that you have the tools and solutions in place that can easily be understood and used by everyone.

Business users want BI tools that empower them, letting them get what they need rapidly and precisely, Bell stresses.

BI solutions make it possible for all users to gain business insights by understanding how data is associated, and enabling users to conduct direct and indirect searches across all data, anywhere.

“BI allows people to make sense of data so that they can make better decisions faster. It’s a business solution area that is growing rapidly across the globe because companies are seeing it as an imperative,” he adds. “In today’s economy, there are no margins to waste.”

Read Next: Is That a Growth or a Strategy Problem?

Small & mid-sized  starting to gain the intelligent edge

Small and mid-size businesses are often more agile and closer to their customers than their larger counterparts, which gives them a BI advantage.

A recent report from BI analyst Dresner Advisory Services, the 2013 Wisdom of Crowds Business Intelligence Market Study, found that SMEs have some unique characteristics when it comes to how they leverage BI.

One key finding: When compared to large enterprises, SME BI initiatives are more likely to be driven by executive management and the sales function.

“SMEs have the advantage of agility and the ability to use BI as a competitive differentiator,” says Howard Dresner, chief research officer at Dresner Advisory Services.

“Because of the closeness of executives to the technology, business and customers, they have an edge against larger competitors. While larger enterprises may have an advantage when it comes to BI resources, SMEs tend to face fewer operational challenges than their large competitors.

“Larger organisations get bloated with bureaucracy and process, forcing them to focus BI upon efficiency,” says Dresner. “In contrast, smaller enterprises are, by definition, more efficient and can focus externally – enabling them to take market share from larger players.”

Dresner says SMEs are able to execute quickly to achieve meaningful results. They did not report the same length of BI experience as larger enterprises. This is not surprising, given that BI vendors initially focused on larger enterprise customers in client-server environments.

The report found growing interest not only in SaaS, but also in mobile device support and dashboards. These are trends that Dresner expects will continue.

“SMEs tend to be more nomadic than their larger counterparts, so mobile is very natural for them,” he says.

“Cloud is also a natural fit, which goes hand in glove with mobile – enabling readily-implemented and consumed solutions at a price point that enterprise software can’t approach. And everyone loves dashboards.”

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

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Innovation

R&D: Compulsory Homework For Your Business

Why Research & Development are critical to your company’s future.

Greg Morris

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It’s one thing to develop a technology that everybody wants. It’s a completely different thing launching it, if the legislation or environment aren’t encouraging. Often, the result is companies who have grand ideas and little influence, and this is why it’s essential that you carry out in-depth Research and Development (R&D).

Defining market research

Market research is the gathering and analysis of information, so that organisations can better understand the market, environment, and demand for a new product.

The purpose of this data is to:

  1. Understand and advise on existing and upcoming business plans
  2. Develop new products and innovations
  3. Forecast new developments that could disrupt the industry.

This kind of insight helps business leaders to be educated on factors that can impact their businesses, ensuring robust, up-to-date bases for their decision-making.

Related: Alan Knott-Craig’s Answers On Selling Internationally And Researching Your Idea

The reason you need R&D

The success of a new product depends heavily on its impact on people’s needs. If it doesn’t add sufficient value, it’s not worth the investment. Because of this, your innovations must be in line with the legislative, economic, political, technological, environmental, and social requirements of the people you hope to sell them to.

How R&D has evolved

R&D ensures that your organisation stays viable and sustainable. You can approach it through organic growth, innovation, or a mix of the two.

However, in this new era of the Fourth Industrial Revolution and the Internet of Things, we’re seeing some significant changes to R&D spending. Because these days, people aren’t alone in their connection to the Internet – machines are there too.

In the future, the success of a product is likely to be determined by its ability to connect to the Internet; without that, it will become obsolete. Smart devices will also create new challenges for organisations, as they’ll require entirely new skills and approaches to business, if they are to grow and evolve.

Innovating through R&D

Innovation is not just supported by R&D; it’s also enhanced by it. It’s also affected by:

  1. Understanding consumer needs
  2. Your ability to innovate sustainably
  3. R&D partnerships that allow you to collaborate with others, so you can share the risks and costs of innovation, and speed up the various processes.

An open approach to R&D

One approach to R&D collaboration is through open innovation, where an organisation partners with another party. An initiative like this works well for technological advances, globalisation, and changes to comms technology.

A closed approach to R&D

The more traditional closed approach to R&D is where one company funds and contains the R&D initiatives. And it can be successful too, as long as the initiating company has well-defined and measurable input, throughput, and output.

Related: 3 Ways You Can Innovate And Improve As A Franchisee

R&D in an investment company

Sometimes the subsidiaries in a holding company experience poor communication, resulting in divided direction and unhealthy competition. Because R&D can be expensive and resource-heavy, an organisation-wide strategy must be implemented.

Then, when all stakeholders understand the potential ROI and the operational process involved in R&D, healthy competition and an educated understanding of customer needs can be maintained. This is, of course, the ‘win-win’.

R&D is essential to making relevant, strategic, and educated business decisions. And in our global economy, it’s a competitive advantage you can’t afford not to have.

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Innovation

3 Strategies To Implement A Culture Of Innovation In Your Business (Without Blowing Billions)

Learn to think differently, encourage your team to do the same, and innovative disruption could become a part of your company’s DNA.

Douglas Kruger

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You’re seeing it everywhere. Disruptive innovation is becoming the new norm, and you’re concerned that your business is merely going through the motions, missing opportunities.

How can you join the Elon Musks of the world, without the corresponding bulging budget?

It turns out that many of the techniques of today’s top innovators don’t require vast outlay. They’re simply about different ways of thinking.

Here are three strategies for enhancing the culture of innovation in your organisation without blowing billions.

1Use ‘Ignorance as strategy’

You’ve encountered the aphorism, ‘To a man with a hammer, everything looks like a nail.’ Similarly, to a banker, the only imaginable approach to banking is ‘the way banking has always been done’. When bankers try to think of innovative new ways of banking, they invariably think of greater complexity.

Along came PayPal

In the April 2016 edition of Harvard Business Review, Reid Hoffman, one of the founders of PayPal, said, ‘All the banking people knew the rules. That prevented them from trying anything that looked remotely like PayPal.’

PayPal was not invented by a bank, just as Uber was not invented by a taxi driver.

Related: Demanding Customers Are The Ones Who Motivate Innovation

To make use of ‘ignorance as strategy,’ try this. Gather a group of strategic thinkers and set the rule: ‘The old way of doing it has been outlawed. How else might we serve the same need?’

Or: ‘We are now our competitors. We have half the budget, but our hearts and souls are invested in one purpose: To topple the original company. We can’t do it the way they do it. So how could we go about it?’

Or: ‘The company has burnt to the ground. We’ve lost everything. We need to keep serving our customers but we need a new, cheap, fast way to do it right now that doesn’t rely on any equipment or systems we used before. What have you got?’

2Use commander’s intent

military-commander

Imagine: You’re a military commander. You need to move a convoy of trucks through a dangerous canyon. Your intelligence tells you that there is a sniper on one of the escarpments.

There are two ways you could issue an instruction to a soldier:

The first way: ‘Go take out that sniper.’

That’s very clear, and very good. But there’s something surprisingly important missing from it. The ‘why’ is not overtly stated, and for that reason, the mission could actually fail.

Let’s try it again the second way: ‘Go take out that sniper because we need to ensure safe passage through the canyon for our convoy.’

That may sound like a ridiculously obvious addition. Here is why it’s not: In a real, dynamic scenario, things change constantly.

Let’s say your soldier breaks off from the convoy and heads up into the mountains. Very quickly, three things go wrong:

  1. He can’t find the sniper
  2. Enemy forces start firing at him, making it difficult to look for the sniper
  3. His own weapon fails to fire so that he can’t shoot back.

If our soldier thinks only about the literal instruction — ‘shoot the sniper’ — he is now unable to carry it out. But if he bases his actions on the commander’s intention — ‘secure our convoy’ — other options open up to him.

Related: Reel Gardening Warns That Innovation Is Never Easy

He might draw their fire. He might set a bushfire. Or he might cause a commotion in a different canyon, disguising the movements of his convoy. He might, he might, he might… But only if he is absolutely clear on Commander’s Intent, and not working according to an explicit tasked item only.

Managers love to create detailed rules and procedures. But these can actually stifle innovation. Commander’s Intent is the life hack by which we get the upper hand again, freeing up leeway for creative potential.

3Instead of rules: Imaginative debate

Organisations accumulate rules over time. Problematically, rules can become a form of culture. And there is a better way.

When NASA faced two separate, well-known challenges, their culture at each stage was very different.

In 1970, Apollo 13 was two days into its mission when an explosion knocked out one of their oxygen tanks. The ensuing creative scramble to get the astronauts safely home is the stuff of legend. The creative trial and experimentation that went into rescuing them was formidable. New procedures were made up back on earth, then tested in the simulator, then relayed to the astronauts 200 000 miles away, almost in real-time.

Through this process of creative trial and experimentation, of collaborative inter-disciplinary debate, one by one the issues were resolved and the crew was brought home safely.

At this point in time, NASA’s culture was ruled by imaginative debate. It was an exploratory culture, an experimenting culture, a culture based on learning and evolution.

By contrast, at the time of the Columbia disaster of 2003, the culture of experimentation had given way to one of formalised rules, regimented procedures and rigid hierarchy. NASA had stopped being a learning organisation. It had become a bureaucracy instead.

As Columbia re-entered the earth’s atmosphere, a large piece of foam fell from the shuttle’s external tank and broke the wing of the spacecraft. The shuttle broke into pieces. NASA recovered 84 000 pieces from a debris field of over 2 000 square miles.

The investigation revealed some damning insights about the culture that led to the problem.

Related: Howard Blake Stays Hungry With His Innovation Strategy

During a post-launch review, a group of engineers actually saw this foam dislodge from the rocket. They tried to pass on this information. NASA’s management, which by this stage liked to manage everything ‘by the rules’, had seen dislodged foam before, and, according to their institutionalised perceptions, deemed it to be unimportant.

The engineers tried to argue that it seemed like a lot more foam than usual. It was a qualitative argument, based on human insight and intelligence. But NASA was unable to listen. Dislodging foam was a known quantity, and the voices of dissenters went unheeded.

NASA by this stage was so bound in rules and procedures that, in important ways, it had ceased to be a learning, experimenting culture. And that made it incapable of hearing an idea, to its great detriment.

Situational awareness

Imaginative debate allows situational awareness to pass up and down the chain of command. It promotes the opportunity to see innovation possibilities. It shows up problems that fall outside of the capacity of norms and guidelines.

The Israeli Defence Force uses an examination of these two cultures within NASA as a way of perpetuating a learning culture within its own organisation. In Start-Up Nation, Israeli air-force pilot Tal Keinan is quoted as saying that if NASA had stuck to their experimental culture, the way his own air force and military do, they would have identified and seriously debated the foam strikes at the daily debrief.

Debating everything isn’t tedious. It’s illuminating.

Putting rules in place of debate isn’t clarifying. It’s dulling.

Rigid rules enforced by unlearning authority are a recipe for real danger. The use of strenuous debate helps to overcome these blind spots.

Cultures of learning are far more idea-friendly than bureaucracies. And it costs nothing to become one. Merely a little willingness.

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Innovation

To Have An Innovative Company, Let Your Employees Take The Reins

‘In order to clean, they need to get messy,’ serial entrepreneur Justin Klosky tells Entrepreneur’s editor-in-chief Jason Feifer.

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Related: Demanding Customers Are The Ones Who Motivate Innovation

An innovative company starts with an innovative team. And what’s the best way to innovate? Give your employees the freedom to run with their own ideas, then manage the chaos later. At least that’s what Reid Hoffman believes.

“If you want your company to innovate, your job is to manage the chaos,” says the co-founder of LinkedIn, partner at VC firm Greylock and host of Masters of Scale, a podcast series examining counterintuitive theories to growing a company.

Hoffman’s theory doesn’t seem too far-fetched either. In fact, he’s not the only person who thinks giving employees the freedom to think and create on their own triggers innovation.

“When [people] have that ability to explore and innovate without the pressure of failing, you’re setting yourself up for a ‘win’ situation, because you’re going to get the best out of somebody,” Justin Klosky, founder of professional organizing company O.C.D. Experience, tells Entrepreneur’s editor-in-chief, Jason Feifer, in a video.

Although, when you’re empowering employees with this much freedom, you’ve got to be hiring people you trust. This can be easier said than done. Rather than dissecting a person’s resume, Klosky recommends digging deeper and asking prospective employees questions that will really open them up – anything from who they are, where they’re going and what brought them here.

Related: Beyond Innovation – it’s Innovation Velocity That Really Matters…

After you’ve hired a group of honest, intelligent employees, now what? Don’t tell them how to innovate. Instead, let them figure that out on their own. Allow employees to do what they do best, return to you with their results and from there manage the chaos.

“In order to clean, they need to get messy,” says Klosky.

For more insights and advice about managing an innovative culture, check out the video.

This article was originally posted here on Entrepreneur.com.

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