“It was the best of times, it was the worst of times,” wrote Charles Dickens in 1859, in the opening of his great work: “A Tale of Two Cities.” Dickens’ words seem just as applicable in today’s turbulent times, 150 years later.
Almost daily we receive fresh news of alarming financial, legislative, political, and technological change, with “truth” an elusive commodity.
In the commercial business world, however, corporate leaders must find new ways to develop useable information based on real truths. They must seek out historical data for more knowledge-based decision-making. And that data must be as detailed and complete as possible, so that when it is combined with effective business practices and processes, executives can make decisions with the highest confidence.
Have we really thought about how to communicate this concept to upper management?
About five years ago, a young leader of a well-known technology company wrote in the Baylor Business Journal:
“An integrated approach to enterprise decision management will no longer be a competitive differentiator, but a simple requirement. Companies that aren’t already evolving toward this vision today may be too late. Vision and leadership, not technology, are the crucial components of an enterprise approach to decision management.”
He forecast that by the year 2008, most companies would have achieved this objective. Unfortunately, a large majority of firms are still struggling to complete this task and/or have decided to let individual departments and managers be responsible for their own ‘truths’ and BI systems.
Today’s most successful business leaders know that:
- Multiple versions of the truth create non-decisions and inaction.
- Multiple systems and databases created in an organization are expensive to maintain and update, and are difficult to keep synchronized with the rest of the business.
- Customers that enjoy quality service and a positive buying experience will likely return with more orders and business; they may even bring their friends and, in broadcasting the “good news” to others, offer the highest plaudits to the firms responsible.
- 4) Corporations that downsize and also reduce their expenditures on managing information and providing enhanced business intelligence usually are not the ones that lead their industry out of a recession.
Can you add to this list of known critical issues?
This last point—companies downsizing and reducing expenditures during a recession—is most important at present. Let’s look at specific industry examples.
Retailers and producers – Typically, companies in these industries lower production and distribution when sales slow and revenues decline. But doing so may not be wise. Smart executives translate a reduction in revenue into catapulted requirements to lower inventories and provide the right products to the right customers in the right markets by effectively managing both the capital assets and the human resources. Perhaps distributing a different mix of products is more sensible. Clearly, reacting directly to changing customer needs should drive decisions, not just budgets, expenditures, mass marketing, and lowered pricing.
Financial services – Smart executives know that customer confidence and personalized inter-communications create long-term value, with both retail and commercial customers. In difficult times, you want to get closer to your customers and work with them through the recession and their lifecycle and life stages. Event-based marketing and detailed personal ‘financial life planning’ could accelerate customer loyalty and revenues. The large number of aging ‘baby-boomers’ and young people with credit problems need new services aimed directly at their future happiness.
Travel and transportation – Smart executives use detailed data to lower the costs of fuel (e.g., BNSF), lower the cost of inventories (or capital investment utilizations, e.g., UPR), and raise customer confidence (through relationship and profitability pricing) to maintain and enhance business. They also look at excess inventories and re-price them instantly. “Next best offers” (NBO), or analytical CRM offer management, can accelerate cross-selling and reduce exposure to reduced revenues.
Manufacturing – Smart executives focus their resources to re-design, re-tool, or find new channels for the distribution of their products. They also focus on lowering inventories and working with both the supply-side (raw materials or distribution inbound suppliers) and the demand side (customers, retailers, distributors, or alternative channels) to maintain customer loyalty. Now is the perfect time for them to create deep, detailed analytics and BI from their ERP, or any like systems, that lack such capabilities.
Communications – Bundling services and using high-cost capital investments (such as the network or local stores and distribution outlets) allow smart executives to focus not only demographics, but directly on personalized offerings and bundles to keep customers happy, loyal, and communicating their value within their various communities. This is also true for the commercial side of their businesses.
In recessionary times, “price is important”; keeping customers may be the highest priority; and “no revenue is no revenue”. Every customer actually does count for companies in the communication industry—if, for nothing else, as “cash-flow” to pay fixed expenditures. CFOs need CMOs to make things happen differently in recessions: to keep customers, up-sell customers, and bring in new customers. The need for “Near-Real Time” (NRT) with relevant, personalized, and meaningful marketing can accelerate a positive rebound or new growth.
Health provision, pharmaceutical production, and health insurance – Educational services may be what’s needed most here. Young and old need to understand and use health services much more effectively to prevent health problems. Using past and present claims provides an opportunity to communicate effectively to, and through, the health industry’s various channels. An ‘ounce of prevention is worth a pound of cure’. BI should be used to help people manage health and also involve them, with their consent, in new ways. In certain states, smart governments have used various DW and BI solutions to provide better health services and new awareness programs, thus enabling immunization for children and immigrants, and even food nutrition and food stamp programs for the needy, thus saving hundreds of millions of dollars.
Do you know of additional historical industry successes?
In my next post, I’ll look at how, by first using detailed customer behavior data, along with life-stages and lifecycle data, and also local economic data, and then focusing on multiple channel communications to introduce changes and availabilities may greatly reduced the amount of resources used by a firm and also reduce the cost of doing business. This alignment has been borne out in many firms in many industries.
