Project X Discussions

Peter Schiff Video Prediction Last Year

I was just sent this amazing video clip from last year.  A debate between Peter Schiff and other financial investment experts.  Really will be a classic and likely video of the year. 

http://paul.kedrosky.com/archives/2008/11/14/homage_to_peter.html

Nobody agreed with him but he was spot on.  I do not know anything about him but it is really scary what others were saying and calling him crazy and demented.

Any comments?

Successful Data Warehousing 2

One of the keys to successful data warehousing is to consider the consumer of the products from the warehouse.  Originally the thought was that senior management would be the consumer of the products in the form of management reports or dashboards.  While this is often true, the business analyst is more likely the consumer or user.  Often the analyst is in marketing or sales. 

One characteristic of business these days is rapid change and the question you have today may not be the question in the next quarter.  To be effective the answers to questions must be answered quickly.  The general rule of thumb in the BI world is three months.  That means that the whole project from requirements to answering the question takes three months or less.  That is quite a challenge for a conventional IT organization which is responsible for the data warehouse.  New data is likely needed.  Requirements need to be understood.  Data imported and reports or dashboards produced.  However business value is often time sensitive.  Developing a methodology that produces rapid results is critical.  Projects that take too long find that the requirements keep changing as time marches on. 

I suggests that we need good tools and creative people who can produce results quickly.  The ways these things can be implemented depend on the organization.  I think that if the data warehousing organization cannot be nimble and responsive, the user will turn to spread sheets and other stand alone applications which do not help the overall business. 

The vision of the business leadership and the IT leadership will be critical in producing results.  However the development methodology must be responsive to the consumer. 

The theme of rapid results is one that Project X Ltd. considers very important and demands innovative approaches.  The use of agile methods can help but the idea must be part of the fundamental beliefs of the data warehousing organization.

More on this subject will appear later.

Rapid Results and the Big Systems Project

One of the challenges we face in the systems business is the production of rapid results or early wins in the context of the large systems projects.  One of the important principles of change management is to create momentum and early bottom-line results.  I think we all are familiar with the challenge but let me describe it from my point of view. 

The business wants to improve a particular process in their organization and looks to the systems group for help because they know it will involve new systems.  Another way it may arise is the systems group develops a strategic systems plan and identifies a particular area where high return on investment is possible.  As a concrete example, let us take an inventory system for a large integrated mining company.  The current system consists of a distributed set of warehouses of parts through out the organization without any central information as to where things are.  In this organization, some of these parts are worth thousands of dollars and their availability is a large determining factor in the productivity of the company.  The company strategy has been the relentless pursuit of productivity and they have made big gains in the past.  One simple change was to make the driver of a underground scoop tram responsible for changing the tires on his vehicle.  These tires cost $20,000 each.  This change reduced dramatically the number of tire failures because the driver became more careful. 

The organization decided they needed a centralized information as to where all the parts are in this very decentralized organization where productivity is the responsibility of each group.  The multi-year project was undertaken to define requirements, select a system and implement it.  Because management was waiting for the new system before implementing changes, the old systems continued.  In the end, the system was implemented but none of the expected gains were achieved.  I expect the old inventory system remained.

Why did this organization which had been so successful in raising productivity in many areas fail on this project?   I honestly do not know for sure but I have some ideas.

I think the first cause was that the project was a systems project as opposed to a project initiated by the business with help for the systems people.  I suspect the system would likely worked just fine if it were part of a change effort by the business.  Centralized information on where parts are being held could have been implemented in many simple ways using their existing systems.  I expect each part of the organization was jealously guarding their spares to maintain their productivity.  Tackling that deeply entrenched behavior was a business problem, not a system issue.

During time the system was being developed, the business continued with old processes because they decided why change to something that will be replaced shortly anyway.  Because change is difficult anyway, they decided wait for the new system to drive the change.  My opinion is that attitude is a recipe for failure.

So what is a solution for these big systems projects because they absolutely necessary for most organization to modernize their processes and get productivity gains.  I do not think there is a simple answer and every project must be looked at carefully.  Each has unique characteristics but here are some important things to think about.

• Is the business driving the project and wanting the changes?
• Is the business eager to implement changes before the system is ready?
• Can the project introduce early changes to the processes to get productivity gains?
• Are there ways of introducing parts of the project quickly to effect improvements quickly?
• Are there ways to maintain the change momentum throughout the project?
• Will the big change give the organization indigestion?
• Are there more creative ways to introduce the changes to achieve rapid results?
• Is the organization capable of making the changes required? 
• Who are the most effective change leaders?

I have a great deal of sympathy for the systems people who are trying to help their organization make productivity gains.  I think senior management really needs look at the business organization and business leaders to take more leadership in making changes.  If you do not have a strong change coalition in the business that are will lead the change and produce rapid results, be careful and think twice about the big system project being the silver bullet that will save your organization.

I welcome comments and other ideas people have about big systems projects,

Successful Data Warehousing 1

Recently I have been doing some research on the characteristics of successful data warehousing services.  I have learned some very interesting things and the challenges that organizations face.  The interesting thing is how important this area is for a successful business.  The stories of the leaders are legendary and the skills necessary to use good business intelligence are in great demand.  However the challenge of people offering business intelligence services is significant.   This blog will be first of many on successful data warehousing.

The challenge of every organization is to find a way of sorting out truth from fiction.  Most organizations have a tremendous amount of information in the systems that run their business and do their financial reporting.  However the information is often not available in a form that can be used by decision makers.  The challenge is to collect the data into a data warehouse which can produce some good reports and help people make good business decisions.

The challenge in many organizations is the people in IT have a vision of what is possible with good decision making tools but the decision makers are really not aware of what is possible.  Some business sectors, like finance and retail, have made great strides in changing the direction of their organization with good business intelligence.  Many others have had difficulty getting started. 

A typical sign of an organization which is moving towards better business intelligence is the use of very complex spreadsheets for management reporting.  Usually the data for these sheets are entered manually for other sources and then manipulated to give some impressive and important reports.   Most organizations have at least one horror story of a decision which was made because of errors in entering the data or an error in the spreadsheet.  Most organizations do not really have much of a choice because to get started in data warehousing can be quite intimidating.  I do not think it has to be difficult but needs to be carefully planned. 

One of the difficulty many organizations face when trying to get started with a data warehouse is they set too ambitious target at the beginning.  Do not bring in all the data at the beginning.  Set up a structure that can grow but start small.  Many people think that the first step is huge, I believe a approach that leads to early short term benefits is really important.  Often the grand design is easier to imagine but with some effort and creativity you can create some early wins.   I think the business people must demand early results and be impatient.  These demands can create some design challenges but lead to better learning and business results.  The penalty of not moving forward to make good decisions from good information can be very serious for an organization. 

The challenge of the IT leader is to move with the readiness of the organization and at the same time take leadership, very delicate balance.  The ideal circumstance is a business leader who is demanding better information and an IT leader who sees a vision of data warehousing that meets immediate needs and builds for the future. 

The difficulty is the justification of the expenditure.  With operational systems, the justification is related to fairly tangible return on investment.  How can one predict the value to better information to make better decisions?   I think the metaphor of mining is a great one.  Mining companies spend a large investments looking for new ore bodies.  Management is always looking for better business intelligence to make better decisions.  The search is very important because in the rapidly changing business environment, being blind or basing decisions on multiple versions of the facts is very risky.  Not every search will lead to gold but without the search the business is blind.  After the search is successful, we now want more and more.  One of the most interesting things that the data warehousing project finds frequently is that the sources of data is very bad.  From the business point of view, basing decisions on bad data is very risky.  By looking at the data outside of the operational framework often reveals weaknesses that do not necessarily affect the operational systems but should not be the basis for decisions.

My next blog will continue the discussion on successful data warehousing.

Business Analyst Role

One of the most important roles in a data warehousing project is the business analyst.  However on most projects the role can involve several different roles.  In addition, the project might require then to fill multiple roles.

The first and most common role is that of defining business requirements.  So let us call this function business requirements analysis.  In this role the job of the data analyst to discover from the business their requirements for the project.  These requirement can be documented in various ways.  Often the requirement can be expressed in the form of questions the business has.  Another way the requirement can be expressed is in the form of report requirements.  In each case we are not looking at the business processes, only at questions the business has or the reports the business wants.

Another role is that of business analysis.  This role is more challenging because the analyst must understand the business and the challenges the business is facing.  Based on this understanding, the challenge of the analyst is to come up with ideas about how better information can help the business perform at a higher level.  Take as example a retailer who captures buying patterns of shoppers based on the cash register record.  The analyst might suggest to focus on a segment of purchases and analyze the profitability of that shopping basket.  Another way of analyzing the buying patterns is to look at the customer as opposed to the basket.  The customer buying patterns can be analysed often through loyalty card data.   A good analyst will look at the actual processes in the store and ask different questions than the retailer might ask to divine business intelligence.

The third activity as opposed to role is one of design.  The result of most analysis is a design to meet requirements.  I have found that most analysts rushed to solution and design far to fast.  Based on the data that is available the analysts quickly comes up with reports that can present the data in new ways.  However if we avoid the steps of understanding the business problem, we will rush to a report based on the data we have as opposed to a response to a business problem.   Most analysts will rush to solution and design because of the discomfort of dealing with uncertainty and admitting to a lack of understanding of the business problem and process.

The business analyst is caught in the middle between the business and IT folks.  The role is to create a bridge and understand the issues on both sides of the chasm.  I do not think we appreciate how difficult the role can be and do not give them support they need in dealing with the complex issues of data warehousing project hoping to deliver business intelligence. 

The New Management Network

We are pleased to announced that Jim Hayward, one of our senior consultants, has been invited to join The New Management Network.  The Network represents a unique assembly of management consulting capacity embracing strengths ranging through organizational development, strategic thinking, diversity, information management and broad environmental and economic perspectives.  A client in the "high tech" world recently remarked on the scope and depth of this combination of capacity and flexibility. This skill mix, when combined with members' belief in creative innovation and their dedication to drawing out the human spirit in organizations, offers clients unparalleled benefits on issues of corporate purpose, strategic clarity, company-wide alignment with direction, teamwork and organizational culture.

I am honoured to be in the company of such impressive people.  My relationship with Don Fowke began many years ago when I worked on Operation Productivity for the Manitoba Governement.  This relationship gives Project X Ltd. access to some of the leading consultants around the world.   See their web site: http://www.new-management-network.com/about_appeal.html