Changing Business

An existential approach to process optimization

This week I had a meeting with a client that, for a moment, took me back to my college days and the intense, alcohol induced philosophical debates my fellow students and I used to get drawn into. The debates often involved trees in forests, fish, bread and bicycles etc. Jean Paul Satre’s ‘The Age of Reason’ and Immanuel Kant’s ‘Critique of Pure Reason’ both came flooding back.

I was in a meeting with a senior manager whose team had the responsibility for designing KPI’s for measuring the effectiveness of business processes. At one point I ignorantly suggested that to design an efficient process it is best to separate technology from the process itself. I suggested that no matter whether we are in SAP, Cognos, BO, or any other system for processing and/or reporting, we simply need to get back to the essence of the transaction itself. It was at that precise moment that my client interrupted me by saying:

“Harley, I have been studying this exact theory for the last 13 years and no matter how I approach it, I realize that what you are saying is impossible. Try imagining even the simplest of processes without the use of tools. For example, imagine how to design the process of getting from your home to your office without any tools or technology – you can not, it’s just not possible. So we are obliged to accept that tools are an intrinsic part of the process its self, there is no other way of approaching it”.

I considered what he said for a while then told him a true story:

I was once working in China, my client was in the closing stages of building a giant chemical production plant which was situated two and a half kilometers away from the regional head office. The problem was that twice per day a massive amount of data needed to be transferred between the plant’s production systems and the servers located in the regional head office. By coincidence, I had joined a technical meeting addressing the problem, at the point where everyone present had seemingly exhausted all the options. I was told that: ‘Laying a dedicated cable meant tunneling under our competitors factory. Going around it was way too expensive and the cable would then be subject to damage from road building schemes and other forms of maintenance. Using satellite or 3G technology would be too unreliable and would cost the earth.’

The participants were close to panicking – the new plant had cost millions of dollars and was only a few weeks from going on line. It was then I noticed a Chinese construction worker cycling past on his bicycle – “Why can’t you do it manually”? , I asked. “Why not simply download the data onto an external hard drive and have someone cycle with it to office”? The room fell silent. “Are you kidding?” someone asked. “No, I am deadly serious! Give me one good reason as to why it might not work? Give me a simpler, better idea if you have one. If you are worried about risk, download the data onto two hard drives and have two cyclists, one in reserve – just in case”.

As far as I know, to this day the bicycle method is still being used!

Of course – this process, just like any other, uses a tool so my client is correct – but it is not the kind of tool that technologist naturally consider – why? Because, it’s too simple, too embarrassing to admit to one’s colleagues. Me, I don’t care. I am not an engineer. I am just a pragmatic manager that dislikes endless discussions and simply likes to get on with the job in hand. (Except when I have had a few too many units of alcohol and I am in the presence similarly intoxicated philosophers)…

Business Intelligence (BI) – An analogy

This week I sat down to write a short piece to illustrate exactly what Business Intelligence (BI) is. A colleague of mine needed something to support a presentation he had to give to his directors. What I wanted to achieve was to create a lasting image of what BI is, how it can be useful and why it is absolutely needed in order to out smart the competition by seizing on opportunities that only knowledgeable and responsive companies have. So I wrote this story (in fact I wrote it a long while ago to explain something completely different to a bunch of investors, it worked then so hopefully it will work tomorrow in its new context)!

Imagine you are a fighter pilot in a state of the art F16. You are flying high over enemy territory when suddenly there is a blip on your radar screen. Your on board computer systems tell you that the blip is most likely another aircraft. Business intelligence is knowing whether the pilot of the detected aircraft is an enemy or a friend, before he even knows you are in the sky.

Today, most companies (without sophisticated Business Intelligence systems) can see a blip on their radar screen and, after some deliberation, can detect if the blip is another aircraft and if it is from their own squadron. But when it is not one of theirs, then they can not be sure about anything. The aircraft can be enemy or friendly (from another geographic location). Thus for companies with inadequate BI systems, fast global decisions can be risky and flawed. Quite simply their Chief of Staff (CEO) and Wing commanders can not see the complete global picture in front of them, and any picture they might have will most likely not take into account all of their assets, resources and opportunities.

To win in a competitive market place companies need to be able to detect enemy aircraft before they even leave the ground. This might sound like a dream but good (well integrated) global Business intelligence systems can give this kind of advantage.

Thus for me business intelligence is knowing what information you need to have and why you need to have it. It is no use simply gathering data on every measurable event. You need to know what matters and what does not. And then you need to know what you are going to do with the knowledge, once you have it. Far too much time and money is wasted by middle management collecting data to prove that their departments are running smoothly.

The best BI systems integrate external events with internal events and allow company managers to create opportunities by making intelligent decisions, based on real data. A classic utterance from a manager from an under performing company without good BI: ‘If only I had known that there was a shortage of my product in that geographic region, I could have shifted my overstocked product there and sold it at full list, instead of dumping it at a knock down price in the market where it was originally sent to!’

Interim managers need to be aware about BI, what it can do and how to implement it. It is a lot more than just a Balanced Score Card feeding results into an Excel spreadsheet.

As T.S. Eliot wrote “After such knowledge, what forgiveness” This can mean anything depending on how you interpret it, but to me it means ‘how can we excuse ourselves for the fact that we did not know better, and the mess we made because of it?’