Business Intelligence

New Perspectives on Business Ecosystems

Posted on Updated on

One of the many changes resulting from the COVID-19 pandemic has been a sea change in thoughts and goals around Supply Chain Management (SCM). Existing SCM systems were up-ended in mere months as it has become challenging to procure raw materials to components, manufacturing has shifted to meet new unanticipated needs, and logistics challenges have arisen out of health-related staffing issues, safe working distances, and limited shipping options and availability. In short, things are a mess!

Foundational business changes will require modern approaches to Change Management. Change is not easy – especially at scale, so having ongoing support from the top down and providing incentives to motivate the right behaviors, actions, and outcomes will especially critical to the success of those initiatives. And remember, “What gets measured gets managed,” so focusing on the aspects of business and change that really matter will become a greater focus.

Business Intelligence systems will be especially important for Descriptive Analysis. Machine Learning will likely begin to play a larger role as organizations seek a more comprehensive understanding of patterns and work towards accurate Predictive Analysis. And of course, Artificial Intelligence / Deep Learning / Neural Networks use should accelerate as the need for Prescriptive Analysis grows. Technology will provide many of the insights needed for business leaders to make the best decisions in the shortest amount of time that is both possible and prudent.

This is also the right time to consider upgrading to a modern business ecosystem that is collaborative, agile, and has the ability to quickly and cost-effectively expand and adapt to whatever comes next. Click on this link to see more of the benefits of this type of model.

Man's forearm and hand, index finger extended to point to one of a series of "digital keys"

Whether you like it or not, change is coming. So, why not take a proactive posture to help ensure that this change is good and meets the objectives your company or organization needs.

Changes like this are all-encompassing so it is helpful to begin with the mindset of, “Win together, Lose together.” In general, it helps to have all areas of an organization moving in lockstep towards a common goal but at a critical juncture like this that is no longer an option.

The Future of Smart Interfaces

Posted on Updated on

Recently I was helping one of my children research a topic for a school paper. She was doing well, but the results she was getting were overly broad. So, I taught her some “Google-Fu,” explaining how you can structure queries in ways that yield better results. She replied that search engines should be smarter than that. I explained that sometimes the problem is that search engines look at your past searches and customize results as an attempt to appear smarter or to motivate someone to do or believe something.

Unfortunately, those results can be skewed and potentially lead someone in the wrong direction. It was a good reminder that getting the best results from search engines often requires a bit of skill and query planning, as well as occasional third-party validation.

Then the other day I saw this commercial from Motel 6 (“Gas Station Trouble”) where a man has problems getting good results from his smart phone. That reminded me of seeing someone speak to their phone, getting frustrated by the responses received. His questions went something like this:

Siri, I want to take my wife to dinner tonight, someplace that is not too far away, and not too late. And she likes to have a view while eating so please look for something with a nice view. Oh, and we don’t want Italian food because we just had that last night.

Just as amazing as the question being asked was watching him ask it over and over again in the exact same way, each time becoming even more frustrated. I asked myself, “Are smartphones making us dumber?Instead of contemplating that question I began to think about what future smart interfaces would or could be like. 

I grew up watching Sci-Fi computer interfaces like “Computer” on Star Trek (1966), “HAL” on 2001 : A Space Odyssey (1968), “KITT” from Knight Rider (1982), and “Samantha” from Her (2013). These interfaces had a few things in common:

  1. They responded to verbal commands;
  2. They were interactive – not just providing answers, but also asking qualifying questions and allowing for interrupts to drill-down or enhance the search (e.g., with pictures or questions that resembled verbal Venn diagrams);
  3. They often provided suggestions for alternate queries based on intuition. That would have been helpful for the gentleman trying to find a restaurant.
Digitized image of a man's face overlaying the globe

Despite having 50 years of science fiction examples, we are still a long way off from realizing that goal of a truly intelligent interface. Like many new technologies, they were originally envisioned by science fiction writers long before they appeared in science.

There seems to be a spectrum of common beliefs about modern interfaces. On one end there are products that make visualization easy, facilitating understanding, refinement and drill-down of data sets. Tableau is a great example of this type of easy to use interface. At the other end of the spectrum the emphasis is on back-end systems – robust computer systems that digest huge volumes of data and return the results to complex queries within seconds. Several other vendors offer powerful analytics platforms. In reality, you really need a strong front-end and back-end if you want to achieve the full potential of either. 

But, there is so much more potential…

I predict that within the next 3 – 5 years we will see business and consumer interface examples (powered by Natural Language Processing, or NLP) that are closer to the verbal interfaces from those familiar Sci-Fi shows (albeit with limited capabilities and no flashing lights).

Within the next 10 years I believe we will have computer interfaces that intuit our needs and facilitate the generation of correct answers quickly and easily. While this is unlikely to be at the level of “The world’s first intelligent Operating System” envisioned in the movie “Her,” and probably won’t even be able to read lips like “HAL,” it should be much more like HAL and KITT than like Siri (from Apple) or Cortana (from Microsoft).

Siri was groundbreaking consumer technology when it was introduced. Cortana seems to have taken a small leap ahead. While I have not mentioned Google Now, it is somewhat of a latecomer to this consumer smart interface party, and in my opinion is behind both Siri and Cortana.

So, what will this future smart interface do? It will need to be very powerful, harnessing a natural language interface on the front-end with an extremely flexible and robust analytics interface on the back-end. The language interface will need to take a standard question (in multiple languages and dialects) – just as if you were asking a person, deconstruct it using Natural Language Processing, and develop the proper query based on the available data. That is important but only gets you so far.

Data will come from many sources – things that we consider today with relational, object, graph, and NoSQL databases. There will be structured and unstructured data that must be joined and filtered quickly and accurately. In addition, context will be more important than ever. Pictures and videos could be scanned for facial recognition, location (via geotagging), and in the case of videos analyze speech. Relationships will be identified and inferred based on a variety of sources, using both data and metadata. Sensors will collect data from almost everything we do and (someday) wear, which will provide both content and context.

The use of Stylometry will identify outside content likely related to the people involved in the query and provide further context about interests, activities, and even biases. This is how future interfaces will truly understand (not just interpret), intuit (so it can determine what you really want to know), and then present results that may be far more accurate than we are used to today. Because the interface is interactive in nature it will provide the ability to organize and analyze subsets of data quickly and easily.

So, where do I think that this technology will originate? I believe that it will be adapted from video game technology. Video games have consistently pushed the envelope over the years, helping drive the need for higher bandwidth I/O capabilities in devices and networks, better and faster graphics capabilities, and larger and faster storage (which ultimately led to flash memory and even Hadoop). Animation has become very lifelike and games are becoming more responsive to audio commands. It is not a stretch of the imagination to believe that this is where the next generation of smart interfaces will be found (instead of from the evolution of current smart interfaces).

Someday it may no longer be possible to “tweak” results through the use or omission of keywords, quotation marks, and flags. Additionally, it may no longer be necessary to understand special query languages (SQL, NoSQL, SPARQL, etc.) and syntax. We won’t have to worry as much about incorrect joins, spurious correlations and biased result sets. Instead, we will be given the answers we need – even if we don’t realize that this was what we needed in the first place. At that point computer systems may appear nearly omniscient.

When this happens parents will no longer need to teach their children “Google-Fu.” Those are going be interesting times indeed.

Spurious Correlations Follow-up

Posted on Updated on

In an earlier post I wrote about spurious correlations. Over the weekend I ran across a site that focuses on finding and posting amusing spurious correlations. While the posts are intended to be funny they do make some very valid points. So, check it out, let me know what you think, and have some fun!

http://www.tylervigen.com/

Big Data – The Genie is out of the Bottle!

Posted on Updated on

Back in early 2011 myself and 15 other members of the Executive team at Ingres were taking a bet on the future of our company. We knew that we needed to do something big and bold, and decided to build what we thought the standard data platform would be in 5-7 years. A small minority of the people on that team did not believe this was possible and left, while the rest of us focused on making that happen. There were three strategic acquisitions to fill-in the gaps on our Big Data platform. Today (as Actian) we have nearly achieved our goal. It was a leap of faith back then, but our vision turned out to be spot-on and our gamble is paying off today.

Every day my mailbox is filled with stories, seminars, white papers, etc. about Big Data. While it feels like this is becoming more mainstream, it is interesting to read and hear the various comments on the subject. They range from, “It’s not real” and “It’s irrelevant” to “It can be transformational for your business” to “Without big data there would be no <insert company name here>.”

Illustration of smoke coming out of a brass lantern

What I continue to find amazing is hearing comments about big data being optional. It’s not – that genie has already been let out of the bottle. There are incredible opportunities for those companies that understand and embrace the potential. I like to tell people that big data can be their unfair advantage in business. Is that really the case? Let’s explore that assertion and find out.

We live in the age of the “Internet of Things.” Data about nearly everything is everywhere, and the tools to correlate that data to gain understanding of so many things (activities, relationships, likes and dislikes, etc.)  With smart devices that enable mobile computing we have the extra dimension of location. And, with new technologies such as Graph Databases (based on SPARQL), graphic interfaces to analyze that data (such as Sigma), and identification technology such as Stylometry, it is getting easier than ever to identify and correlate that data.

We are generating increasingly larger and larger volumes of data about everything we do and everything going on around us, and tools are evolving to make sense of that data better and faster than ever. Those organizations that perform the best analysis, get the answers fastest, and act on that insight quickly are more likely to win than the organizations that look at a smaller slice of the world or adopt a “wait and see” posture. So, that seems like a significant advantage in my book. But, is it an unfair advantage?

First, let’s keep in mind that big data is really just another tool. Like most tools it has the potential for misuse and abuse. And, whether a particular application is viewed as “good” or “bad” is dependent on the goals and perspective of the entity using the tool (which may be the polar opposite view of the groups of people targeted by those people or organizations).  So, I will not attempt to make judgments about the various use cases, but rather present a few use cases and let you decide.

Scenario 1 – Sales Organization: What if you could not only understand what you were being told a prospect company needs, but also had a way to validate and refine that understanding? That’s half the battle in sales (budget, integration, and support / politics are other key hurdles). Data that helped you understand not only the actions of that organization (customers and industries, sales and purchases, gains and losses, etc.), but also the goals, interests and biases of the stakeholders and decision makers. This could provide a holistic view of the environment and allow you to provide a highly targeted offering, with messaging tailored to each individual. That is possible, and I’ll explain soon.

Scenario 2 – Hiring Organization: As a hiring manager there are many questions that cannot be asked. While I’m not an attorney, I would bet that State and Federal laws have not kept pace with technology. And, while those laws vary state by state, there are likely loopholes that allow for use of public records. Moreover, implied data that is not officially taken into consideration could color the judgment of a hiring manager or organization. For instance, if you wanted to “get a feeling” if a candidate might fit-in with the team or the culture of the organization, or have interests and views that are aligned with or contrary to your own, you could look for personal internet activity that would provide a more accurate picture of that person’s interests.

Scenario 3 – Teacher / Professor: There are already sites in use to search for plagiarism in written documents, but what if you had a way to make an accurate determination about whether an original work was created by your student? There are people who, for a price, will do the work and write a paper for a student. So, what if you could not only determine that the paper was not written by your student, but also determine who the likely author was?

Do some of these things seem impossible, or at least implausible? Personally, I don’t believe so. Let’s start with the typical data that our credit card companies, banks, search engines, and social network sites already have related to us. Add to that the identified information that is available for purchase from marketing companies and various government agencies. That alone can provide a pretty comprehensive view of us. But, there is so much more that’s available.

Think about the potential of gathering information from intelligent devices that are accessible through the Internet, or your alarm and video monitoring system, etc. These are intended to be private data sources, but one thing history has taught us is that anything accessible is subject to unauthorized access and use (just think about the numerous recent credit card hacking incidents).

Even de-identified data (medical / health / prescription / insurance claim data is one major example), which receives much less protection and can often be purchased, could be correlated with a reasonably high degree of confidence to gain understanding on other “private” aspects of your life. The key is to look for connections (websites, IP addresses, locations, businesses, people), things that are logically related (such as illnesses / treatments / prescriptions), and then make as accurate of an identification as possible (stylometry looks at things like sentence complexity, function words, co-location of words, misspellings and misuse of words, etc. and will likely someday take into consideration things like idea density). It is nearly impossible to remain anonymous in the Age of Big Data.

There has been a paradigm shift when it comes to the practical application of data analysis, and the companies that understand this and embrace it will likely perform better than those who don’t. There are new ethical considerations that arise from this technology, and likely new laws and regulations as well. But for now, the race is on!

It’s not Rocket Science – What you Measure Defines how People Behave

Posted on Updated on

A while back I wrote a post titled, “To Measure is to Know.”  

Picture showing an astronaut floating in space above Earth

The other side of the coin is that what you measure defines how people behave. This is an often forgotten aspect of Business Intelligence, Compensation Plans, Performance reviews, and other key areas in business. While many people view this topic as “common sense,” based on the numerous incentive plans that you run across as a consultant, as well as compensation plans that you submit as a Manager, that is not the case.

Is it a bad thing to have people respond by focusing on specific aspects of their job that they are being measured on? That is a tough question. This simple answer is, “sometimes.” This is ultimately the desired outcome of implementing specific KPIs (key performance indicators) and MBOs (Management by Objectives), but it doesn’t always work. Let’s dig into this a bit deeper.

One prime example is something seemingly easy yet often anything but – Compensation Plans. When properly implemented these plans drive organic business growth through increased sales, revenue, and profits (three related items that should be measured). This can also drive steady cash flow by constantly closing within certain periods (usually months or quarters) and focusing on models that create the desired revenue stream (e.g., perpetual license sales versus subscription license sales). What could be better than that?

Successful salespeople focus on the areas of their comp plan where they have the greatest opportunity to make money. Presumably they are selling the products or services that you want them to based on that plan. MBO goals can be incorporated into plans as a way to drive towards positive outcomes that are important to the business, such as bringing-on new reference accounts. Those are forward looking goals that increase future (as opposed to immediate) revenue. In a perfect world, with perfect comp plans, all of these business goals are codified and supported by motivational financial incentives.

Some of the most successful salespeople are the ones that primarily care only about themselves. They are in the game for one reason – to make money. Give them a plan that is well constructed and allows them to win and they will do so in a predictable manner. Paying large commission checks should be a goal for every business because with properly constructed compensation plans that means their own business is prospering. It needs to be a win-win setup.

But, give a salesperson a plan that is poorly constructed and they will likely find the ways to personally win with deals that are inconsistent with company growth goals (e.g., paying commission based on deal size, but not factoring in profitability and discounts). Even worse, give them a plan that doesn’t provide a chance to win and the results will be uncertain at best.

Just as most tasks tend to expand to use all time available, salespeople tend to book most of their deals at the end of whatever period is being used. With quarterly cycles most of the business tends to book in the final week or two of the quarter – something that is not ideal from a cash flow perspective. Using shorter monthly periods may increase business overhead, but the potential to significantly increase business from salespeople working harder for that immediate benefit will likely be a very worthwhile tradeoff.

What about motiving Services teams? What I did with my company was to provide quarterly bonuses based on overall company profitability and each individual’s contribution to our success that quarter. Most of our projects used task oriented billing where we billed 50% up-front and 50% at the time of the final deliverables. You needed to both start and complete a task within a quarter to maximize your personal financial contribution, so there was plenty of incentive to deliver and quickly move to the next task. As long as quality remains high this is a good thing.

We also factored-in salary costs (i.e., if you make more than you should be bringing-in more value to the company), the cost of re-work, and non-financial items that were beneficial to the company. For example, writing a white paper, giving a presentation, helping others, or even providing formal documentation on lessons learned added business value and would be rewarded.  Everyone was motivated to deliver quality work products in a timely manner, help each other, and do things that promoted growth of the company. The company prospered and my team made good money making that happen. Another win-win scenario.

This approach worked very well for me, and was continually validated over the course of several years. It also fostered innovation, because the team was always looking for ways to increase their value and earn more money. Many tools, processes and procedures came out of what would otherwise be routine engagements. Those tools and procedures increased efficiency, consistency, and quality. They also made it easier to on-board new employees and to incorporate an outsourced team for larger projects.

Mistakes with comp plans can be costly – due to excessive payouts and/or because they are not generating the expected results. Back testing is one form of validation as you build a plan. Short-term incentive programs are another. Remember, without some risk there is usually little reward, so accept the fact that some risk must be taken to find the point where the optimal behavior is fostered and then make plan adjustments accordingly.

It can be challenging and time consuming to identify the right things to measure, the proper number of things (measuring too many or too few will likely fall short of goals), and provide the incentives that will motivate people to do what you want or need. But, if you want your business to grow and be healthy it is something that needs to be done well.

This type of work isn’t rocket science, and therefore is well within everyone’s reach.