Who are the Winners and Losers in this Cost Driven Business Climate?
There are winners and losers in today’s management. Not those who already blew it with fraud, greed and mismanagement but those who are not capable of convincing their management of making a change which leads to a long term cost / time saving.
Perhaps a bold statement but it is true. After almost one year of being in daily contact with decision makers it is clear that there are winners and losers in this environment.
Excepted are those leaders who cut the big peaces out of the cake. Everyone can fire 10,000 people. Short term cost cutters are no winners. Maybe they are not losers either because they get paid for it very well.
Also excepted are the unfortunates who simply had no chance and were part of the inevitable job cut. But this is about those who still are out there and can make a difference for the company, for the colleagues and even for themselves.
The easiest way to describe a winner is a manager who continues looking for improvements and is willing to approach his or her management asking for a change.
As this change involves spending this manager is risking a lot but with the right argumentation and attitude there is nothing to loose.
When can be demonstrated that with often a small investment a large saving will be realized this can only create a win/win situation.
Think of for example tools with an annual investment of 1K, 5K, 10K or 20K where otherwise 10 times more will be spend.
Imagine you propose your management to spend 20K to save 200K. Would they look at it or call you insane?
It is noticed that while the upper management welcomes this kind of opportunities the lower management is not making the effort to inform them. Fear or disinterest?
Losers will not even think about trying. They will deny every possibility of making improvements. They do that for own (job) protection, disinterest or simply to avoid any confrontation with the management.
In fact they see this crisis as a great opportunity to say `no`. “Sorry, we are told to cut spending, so we have no budget”.
What no budget? Will your upper management postpone a decision when all computers are hit by a new virus?
"Sorry, we cannot afford to fight this virus because there is no budget, try again in six months time".
Is the economic crisis not a kind of virus? How come companies blame the economy for missing orders but not spending better on economic information for example?
It is similar to consumers who stop spending which will not help the economy recover. When companies keep on using secondary tools to "understand" economic threats, waste hours on non core business research etc, is that helping?
Is it because economic information is not important or there is no better alternative available? It does not matter because the outlook remains uncertain?
Have you really tried and compared in terms of cost/benefits or it really does not matter costs remain higher in terms of labor and fees of ´we can only contribute in good times` providers.
Unfortunately due to the global crisis there are more losers than winners. Again, this is about working winners and losers.
Where in this cost driven business climate a search for more efficiency and the naturally cost cut is a priority most managers remain silent. What is the benefit of this hiding?
Almost every company turned into a cost cutting machine to remain profitable or keep losses controlled.
While this is an old trick it has to be done but it will not be the best way to prepare the organization for a recovery. It certainly should not be awarded.
What is more important are the smaller changes like for example the attitude of employees but also secondary expenses.
Would some one who after making an effort surprises his or her management with a contribution to the new corporate strategy in the form of a cost/time saving not be better off?
Of course size matters. Big charges will contribute faster than smaller ones but the effect on the long run (economic recovery and growth will take some years) is smaller.
After cutting the large parts it is time to look for smaller parts. But here is entered the domain of the mid and lower management where there are more losers.
To be more successful a company not only needs a restructuring from the outside (immediately visible for share and stakeholders) but also on the inside (not available to public domain). A difference in looking at short or long term results.
Changes on the inside of an organization can only be done by the managers. They have to search for new tools to help lowering costs but without creating disorder or sending wrong messages to their teams, like the upper management with their large cuttings.
To do that you have to be a manager that can operate in both good and bad times. Most managers now only think of their own situation, lesser about the organization and not at all about the colleagues.
They even consider leaving the company or already accepted another job. Sure, surviving is a priority but who guarantees your next job is save? Would it not be better to become a winner?
Who says it is not possible to gain from this momentum? Can you only perform when everyone is winning and loose when everyone is losing?
Should we all feel miserable and wait till the storm is over? Stop being creative and taking initiative? Not listen to what is available in the markets because there is no budget?
Is it really true when offering the board, the higher management or whoever is above you a solution that helps cutting costs, you will be ignored?
Is it more important to stop new spending because of budget restrictions or orders from the top instead of creating a long term synergy? Is it better only to contribute to a short one?
Managers who accept it is time to stop producing, to make no further attempts and wait for the next episode have a higher chance of losing. Not only jobs but around the corner there are always winners.
Managers who can convince their bosses certain changes do not affect negatively but positively business. Managers who for example come with a tool that demonstrates a welcome ROI after the first day, week or month.
These managers can demonstrate efficiency is out there and this is the best time to find and implement it. Even when an initial investment needs to be made. Making a change is not without investment.
Investments can be small but for sure can be done smarter. Why spending 100K when it can be done for 10K? Because it is easier or the ´we are so used to this provider`excuse?
Who would not accept a change from 100K to 10K? Who would not invest 10K when this would lower costs from 100K?
Only winners will accept and will make an effort. Not because it is impossible but because it is the best alternative.
viernes, 31 de julio de 2009
viernes, 24 de julio de 2009
How Corporate Spending affects negatively your Corporate Planning.
During the past 12 months the global companies (read decision makers) negotiated with in regards to supporting them with essential economic data reports clearly were divided in two groups:
One group fully agreed making changes in the cost structure is needed at all means. Not only restructuring the work force or shutting down plants but also saving costs coming from non core business activities.
The other group in contrast was very determined in not spending at all but only in the core business. No chance of smarter or better spending when it comes to external intelligence, no need for additional economic data despite the worst economic crisis in their job history and certainly not willing to even look at the proposal.
When it comes to Corporate Spending is a negative impact on Corporate Planning justified? Can it easy be eliminated or limited?
My main focus will be on the second group. Not only because I disagree with their spending rituals but because I simply do not understand in this climate there is no need for better economic data combined with cost/time savings.
Current market shifts are caused by changes in the local economies and when these recover more market opportunities will occur. This will go slowly and not by one region.
When China improves the immediate affect on Korea or Malaysia will be smaller. The same for Brazil for example while recoveries from the US and Euro zone remain uncertain.
It all needs time and during this period every minute or dollar spent on non core business issues is a direct extra cost. This is not different per sector or industry.
The global crisis is not caused because of one industry. Housing and finance are related but cannot be marked as one industry. Economic data is essential in every market.
To be prepared or in better shape for potential market recovery most attention is paid to the largest efforts of cutting costs; laying of 5, 10 or even 20% of the staff, cutting salaries of executives or shutting down plants abroad. This will save millions and people actually get rewarded for it.
The irony is that when recovery takes place the staff is hired again and plants are re-opened or re-built but that is the way it is.
But what is wrong with a cost cut of 10, 30 or even 100K?
The past 12 month is noticed group two is not interested. Especially when this is regarding non core business information there is no interest as it is not seen as part of the core Corporate Strategy or Planning.
The majority is not prepared to listen or consider a change here as a contribution. Instead they continue wasting corporate time and expenses on non core business information such as economic information.
The contradiction here is that for group two good or bad times do not matter. They do not care who provides them the forecasts or costs involved. They even prefer a well known brand to “blame” for wrong established analyzes.
But they forget hidden costs like non core business spending finally reduce budgets more resulting smaller budgets. Where remain benefits?
People can only spend once in terms of time and expenses. When a too large part is not related to own business it will have a negative effect on the total.
This total includes all budgeting and corporate planning. While those who are in charge of the larger restructurings clean up the next 12 months hidden costs remain untouched.
Why?
An easy calculation concludes that in every organization operating in other international markets 10% spends corporate time and expenses on non core business information such as macroeconomics.
This 10% contain professionals linked to for example corporate / regional / country departments such as Finance, Marketing, Business Development, Country Management, Strategic Planning etc where macroeconomic data is used to complete market insights.
Per person a cost calculation will result in an annual extra non core expense of at least 1,000 dollars based on one hour per week with an average hourly salary of US$ 30.
Just multiply that with the 10% of your work force. Is that a not relevant or can be missed under the new corporate objectives?
Often current external provision is not under revision which leaves costs unchanged which is a missed opportunity. Lack of interests or lack of decision making power?
The same professionals claim not to be able to work without certain global providers of information (business / market intelligence) but are they right?
Should they not instead to complete the new program of Corporate Strategy and Planning, which is adjusted to this cost driven climate, not look for better and more efficient tools?
According to group two this is again not necessary. Conclusion;
New Corporate Planning requires new settings but this cannot only be focused on core business expenses.
When business leaders complain about the market conditions every dime saved should be embraced.
Business leaders should not hide behind the new Corporate Planning, even though this indicates more savings than spending.
All what can positively affect the corporation should be explored and welcomed; even if this is only 10K instead of 1000K.
When a service can cut down 80-90% of non core business costs of similar information and help professionals prepare for a new era of corporate growth, should that be ignored?
Group two screams about the worst performance in decades but only looks at the big and easy numbers. Their non core business spending will therefore remain inefficient in terms of costs and corporate time.
While this looks like a small issue it will finally slow down the whole corporate processing and directly Corporate Planning.
Helping improving the non core business part by spending smarter resulting from the first month in more time and assets available to core business should be welcomed.
Otherwise Corporate Spending will affect negatively Corporate Planning.
One group fully agreed making changes in the cost structure is needed at all means. Not only restructuring the work force or shutting down plants but also saving costs coming from non core business activities.
The other group in contrast was very determined in not spending at all but only in the core business. No chance of smarter or better spending when it comes to external intelligence, no need for additional economic data despite the worst economic crisis in their job history and certainly not willing to even look at the proposal.
When it comes to Corporate Spending is a negative impact on Corporate Planning justified? Can it easy be eliminated or limited?
My main focus will be on the second group. Not only because I disagree with their spending rituals but because I simply do not understand in this climate there is no need for better economic data combined with cost/time savings.
Current market shifts are caused by changes in the local economies and when these recover more market opportunities will occur. This will go slowly and not by one region.
When China improves the immediate affect on Korea or Malaysia will be smaller. The same for Brazil for example while recoveries from the US and Euro zone remain uncertain.
It all needs time and during this period every minute or dollar spent on non core business issues is a direct extra cost. This is not different per sector or industry.
The global crisis is not caused because of one industry. Housing and finance are related but cannot be marked as one industry. Economic data is essential in every market.
To be prepared or in better shape for potential market recovery most attention is paid to the largest efforts of cutting costs; laying of 5, 10 or even 20% of the staff, cutting salaries of executives or shutting down plants abroad. This will save millions and people actually get rewarded for it.
The irony is that when recovery takes place the staff is hired again and plants are re-opened or re-built but that is the way it is.
But what is wrong with a cost cut of 10, 30 or even 100K?
The past 12 month is noticed group two is not interested. Especially when this is regarding non core business information there is no interest as it is not seen as part of the core Corporate Strategy or Planning.
The majority is not prepared to listen or consider a change here as a contribution. Instead they continue wasting corporate time and expenses on non core business information such as economic information.
The contradiction here is that for group two good or bad times do not matter. They do not care who provides them the forecasts or costs involved. They even prefer a well known brand to “blame” for wrong established analyzes.
But they forget hidden costs like non core business spending finally reduce budgets more resulting smaller budgets. Where remain benefits?
People can only spend once in terms of time and expenses. When a too large part is not related to own business it will have a negative effect on the total.
This total includes all budgeting and corporate planning. While those who are in charge of the larger restructurings clean up the next 12 months hidden costs remain untouched.
Why?
An easy calculation concludes that in every organization operating in other international markets 10% spends corporate time and expenses on non core business information such as macroeconomics.
This 10% contain professionals linked to for example corporate / regional / country departments such as Finance, Marketing, Business Development, Country Management, Strategic Planning etc where macroeconomic data is used to complete market insights.
Per person a cost calculation will result in an annual extra non core expense of at least 1,000 dollars based on one hour per week with an average hourly salary of US$ 30.
Just multiply that with the 10% of your work force. Is that a not relevant or can be missed under the new corporate objectives?
Often current external provision is not under revision which leaves costs unchanged which is a missed opportunity. Lack of interests or lack of decision making power?
The same professionals claim not to be able to work without certain global providers of information (business / market intelligence) but are they right?
Should they not instead to complete the new program of Corporate Strategy and Planning, which is adjusted to this cost driven climate, not look for better and more efficient tools?
According to group two this is again not necessary. Conclusion;
New Corporate Planning requires new settings but this cannot only be focused on core business expenses.
When business leaders complain about the market conditions every dime saved should be embraced.
Business leaders should not hide behind the new Corporate Planning, even though this indicates more savings than spending.
All what can positively affect the corporation should be explored and welcomed; even if this is only 10K instead of 1000K.
When a service can cut down 80-90% of non core business costs of similar information and help professionals prepare for a new era of corporate growth, should that be ignored?
Group two screams about the worst performance in decades but only looks at the big and easy numbers. Their non core business spending will therefore remain inefficient in terms of costs and corporate time.
While this looks like a small issue it will finally slow down the whole corporate processing and directly Corporate Planning.
Helping improving the non core business part by spending smarter resulting from the first month in more time and assets available to core business should be welcomed.
Otherwise Corporate Spending will affect negatively Corporate Planning.
jueves, 9 de julio de 2009
Only efficient market research is vital
Please read first at:
www.marketresearchbulletin.com
Top B2B Tips For Emerging Markets
These are my comments:
I especially like the tip that market research is vital and the need of using independent sources.
Still many believe what can be found for free (internet) is better because it is for free. The fact this info is out of date, increase labor costs or can harm results seems of lesser importance.
On top who is best? What market information provider really makes a difference or has done a good job the past 12 months?
I have no doubt many have good knowledge about certain industries or call themselves sector experts.
Still predicting a trend is not the same as explaining one.
Therefore I believe professionals using market research have to divide this in two groups:
1. One for all information directly related to the core business, i.e. industrial analyzes and competitive intelligence.
2. One for all information about the operational countries, especially those where it is hard to find reliable macro data.
For 1. there is a wide range of providers. Most of our clients use one of them or even let them overlap to secure each specialty per provider (for their core business).
For 2. they have our macroeconomic consensus forecast reports because they do not want to rely on single sources (1.) only for different scenario planning.
Furthermore without 2. more valuable research time is spent during core business hours and already time limited professionals are further cut back or delayed.
On top every one complains about costs. Well, in a cost driven climate you should look for more efficient tools and not postpone a small investment.
Unfortunately even the smallest investments on market research are examined or are simply postponed / canceled because the upper management can no longer fly first class or spend corporate money at fancy restaurants.
This is a time for solutions and every contribution should be welcomed.
Now those not being able to use our reports will spend 10, 20 and sometimes even 100 times more the coming 6-12 months in extra labor costs, hence not even including the risks on the results of bad data.
Imagine you can choose between spending 5K or 500K? Would you not go for the 5K and impress your upper management with the cost saving?
Finally emerging markets remain volatile, unstable and less predictable. Still some have clearly become more developed but the information stream remains difficult in regards to economic forecasts.
This cannot be solved (only) by the other steps mentioned by Matthew Harrison.
There is also no one-stop-shop for market research. Like with doing your private shopping also for corporate shopping you must change and become a smarter spender.
Look around or look at our website. I look forward to send you a copy of our global regional reports or any country in special.
Yes, market research is vital but those the one which is most efficient. Or otherwise do not complain about lost revenues due to the crisis.
When for macro intelligence there is no interest in improvements, what is then to worry?
www.marketresearchbulletin.com
Top B2B Tips For Emerging Markets
These are my comments:
I especially like the tip that market research is vital and the need of using independent sources.
Still many believe what can be found for free (internet) is better because it is for free. The fact this info is out of date, increase labor costs or can harm results seems of lesser importance.
On top who is best? What market information provider really makes a difference or has done a good job the past 12 months?
I have no doubt many have good knowledge about certain industries or call themselves sector experts.
Still predicting a trend is not the same as explaining one.
Therefore I believe professionals using market research have to divide this in two groups:
1. One for all information directly related to the core business, i.e. industrial analyzes and competitive intelligence.
2. One for all information about the operational countries, especially those where it is hard to find reliable macro data.
For 1. there is a wide range of providers. Most of our clients use one of them or even let them overlap to secure each specialty per provider (for their core business).
For 2. they have our macroeconomic consensus forecast reports because they do not want to rely on single sources (1.) only for different scenario planning.
Furthermore without 2. more valuable research time is spent during core business hours and already time limited professionals are further cut back or delayed.
On top every one complains about costs. Well, in a cost driven climate you should look for more efficient tools and not postpone a small investment.
Unfortunately even the smallest investments on market research are examined or are simply postponed / canceled because the upper management can no longer fly first class or spend corporate money at fancy restaurants.
This is a time for solutions and every contribution should be welcomed.
Now those not being able to use our reports will spend 10, 20 and sometimes even 100 times more the coming 6-12 months in extra labor costs, hence not even including the risks on the results of bad data.
Imagine you can choose between spending 5K or 500K? Would you not go for the 5K and impress your upper management with the cost saving?
Finally emerging markets remain volatile, unstable and less predictable. Still some have clearly become more developed but the information stream remains difficult in regards to economic forecasts.
This cannot be solved (only) by the other steps mentioned by Matthew Harrison.
There is also no one-stop-shop for market research. Like with doing your private shopping also for corporate shopping you must change and become a smarter spender.
Look around or look at our website. I look forward to send you a copy of our global regional reports or any country in special.
Yes, market research is vital but those the one which is most efficient. Or otherwise do not complain about lost revenues due to the crisis.
When for macro intelligence there is no interest in improvements, what is then to worry?
jueves, 2 de julio de 2009
The Value of Macroeconomics
I received the past 24 hours very interesting comments about my former blog "The value of business intelligence" and how this is used among managers.
Most of the feedback was related to the fact that indeed the right information does not arrive at the right people while they need backup in using this information best.
I agree certain information needs a backup, especially when it is regarding the core business you are in. At least that is what I hear and see.
Still this is strange; getting education about your business from an external professional. I am often told this is to for come valuable information is missed or used by competition. Acceptable reasons but what about non core business information?
I find it very strange in our business that delivering none core business intelligence is not seen as important or lesser important. What is the value of Macroeconomics?
I agree macroeconomic forecasts are not very reliable. But are industrial trends easier to predict? Is it not the same kind of models and calculations where finally the lucky one is closer to the real outcome? Is it not true there are more under than outperformers?
Is it not true industrial and economic trends are too related to make a choice which is more important and that one cannot do without the others?
Of course core business is core business but still many claim macroeconomic data sources do not need to be improved or the way it is currently provided and utilized.
When looking back in history I find this hard to accept. Besides technology I believe industries have not experienced so many downtrends as economies. We are still in the middle of one!
On top is claimed macro data is not used frequently or can be found in the public domain. So, why all the fuss about the economic crisis when the numbers are not taken seriously?
Let us ignore growth indicators or consumer spending signals and when we need it we all go for the free out of date numbers. Is that a conspiracy or just a “I do not care what is better for the company” mentality?
Almost every corporate press release about the latest results or 2009 / 2010 outlook is full of blaming the economic crisis but so far hardly anyone seems to be upset about the numbers used inside their organization.
Or is it indeed just an excuse for not making the numbers promised 3-6-9 months ago?
When that what is available is called sufficient, why complaining about the economic turmoil? Should you not be warned then by your current resources? Or your local contacts / clients?
And what about your exclusive bank relations? Did they not shared their latest opinions or where they dealing with more important clients?
Furthermore new cost cutting strategies focus mainly on the short term but where are the efforts to look for improvements on business intelligence?
Is an economic crisis not the best time to look for better tools or spend smarter?
We believe the solution is to offer macro data in a consensus format to at least demonstrate the often large spreads between different forecasts of (well known) sources.
This tool will not claim delivering the best forecasts as such tool or resources not exist. More important is what the tool adds in terms of synergies (compared to what is available).
Like with any kind of information the implementation has to be done by the key users. We can deliver backup by explaining certain calculations but for sure want to for come lecturing time limited professionals about macroeconomic trends.
Some one informed me that numbers are the foundation of a building. "You need it for the structure, but you don't have a building with only a foundation".
In that sense we do deliver only a foundation as our material is not used by one key target but by all kind of key professionals through an organization. In this case the organization is the structure and the building at the same time.
This is the Value of Macroeconomics. Not as a priority but as the cement to keep the bricks together. To make sure professionals do not loose valuable corporate time researching non core business data in corporate time and to present a wider opinion of different sources than using the same provider that tells you what will happen in your industry.
I would like to add people have the tendency to criticize others without looking first at the differences. I believe a better solution would be to look at the pros and cons before making any decision or gesture. Then only with an open mind and giving the other the chance to communicate will lead to a win/win situation.
Unless of course there is no budget. There is an economic crisis but no budget for economic sensitive data. That is like sending out the fire department but without water. Risking spending more seems a better choice than spending a few bucks on a country report.
Using a budget restriction for a tool that is helping you in the crisis is like forwarding a decision to prevent a new computer virus hitting your PC. Sorry, new budget is available in 2010, put your computer off and let us all go home! See you in 2010 or when economies less affect the business. Then we will have another evaluation!
I look forward to your comments. Thanks again.
miércoles, 1 de julio de 2009
The value of business intelligence
"Up to 50 percent of managers place no confidence in the numbers presented to them". Business intelligence research, Cambridge University 2009
Is that to hide behind the brand or personal failure?
I am a great fan of publications of KPMG International. I quoted them before and will do again as I fully agree with one of their latest published studies:
"Being the best Thriving not just surviving" - "Insights from leading finance functions"
What really hit me is the conclusions that;
A) Real business intelligence is still rare and it’s time to stop downloading and reworking.
B) Almost half of business leaders do not place confidence in numbers of current external resources.
Before putting my own input on these conclusions I would like to share some of the text from this study first.
"In today’s global economic environment, there are two key components to building greater influence – better business intelligence (right information, right time) and deep business skills (right people)".
Here I will focus on better business intelligence as we cannot offer the right people. We have them but they are not for rent, our intelligence is. The study continues with “Real business intelligence is still rare”.
“Business intelligence is a term that means many things to many people. Simply put, it is a collection of ‘intelligent’ information that helps business leaders make better business decisions that enhance shareholder value.
“When it works, it can deliver the real competitive advantage that business leaders strive for. It is the provision of robust business intelligence that in many cases differentiates top performers from the rest”.
“High quality business intelligence is driven by a collection of processes, applications and technologies designed to gather, store and provide easy access to information. At the heart of this, however, is data”.
Absolutely true! But do business leaders really want to be helped? When the data is wrong would that not be the perfect excuse for internal / personal failure? Would that in this challenging climate be a reason not to go for the “change”?
“In many cases it is the underlying data structures and hierarchies that are driving inefficiencies in the production of real business intelligence. These problems also contribute to why such a high proportion of business leaders place no confidence in the numbers presented to them”.
“Finance leaders should address these issues head on. They should invest to align data with key business metrics, and focus on getting to the root cause of inefficient data structures”.
What decides what is best (for themselves or the company)? I am confronted with finance leaders who assume they are fully covered. I would say wrong covered because would that indicate there is no better solution?
Business intelligence inefficiency in terms of cost and time are put aside as long as other priorities are in place in the current downturn. Short or long term vision?
“The recent market conditions have also illustrated the need for a much greater focus on cash and working capital information. The need for truly effective business intelligence, addressing multiple business dimensions, has never been greater”.
“Can the future of the finance function be manipulating data in spreadsheets to “cobble” together information for boards and investors? Top performers know change is needed and are well on the way to developing solutions that deliver real competitive advantage”.
To not only create cash on the short term more effective business intelligence is a must. Manipulating data by collecting certain information from the internet for example should be banned.
How can out of date info become guidance to the board or investors?
To make change business leaders should be willing to change first and to have the ability to change.
Only cutting costs and not spending smarter will not make the change while waiting for market conditions to improve a search for better business intelligence should become a priority instead of postponing.
"Adapting the finance function is now more urgent than ever, by providing the right information at the right time to help business leaders navigate through turbulent times".
Jochen R Pampel
Global Head of Financial Management - KPMG
It seems combining the words of Mr. Pampel and the above mentioned conclusions (A and B) point out that providers of business intelligence can only succeed when:
1. Distinguishing from others. By offering better quality data, more synergy such as time savings and finally helping cutting costs will be directly contribute to “change”.
2. Delivering the right information to the right people will help much better than receiving an overload of information (overlapping) or doing a non core business search internally. Especially now business leaders are more time limited than ever.
3. Finally the urgency as discussed by KPMG should not be interrupted by budget restrictions. Here I would like to give the following example:
Business threats are not only coming from industries and economies but also for example from a simple computer virus. Imagine tomorrow your office is hit by a new virus.
Would the responsible IT or other leaders postpone a cure because of budget restrictions and have to wait till the next budget cycle?
This is exactly what currently happens in regards to macroeconomic intelligence. While facing the worst economic decline in their own professional career many business leaders cannot access valuable reports.
Even when country reports on a monthly basis only cost a few dollars. Understanding this from a rational point of view can justify this decision but would that not undermine the current needs of quality information?
Or is it really like the computer virus that fighting an economic downturn can be done by not changing (improving) your information streams as this only can be done when market conditions have improved?
This might be the answer why almost 50% of the managers place no confidence in the numbers presented to them. I would rather say they lack own confidence in making a change or convincing their management to do so.
I look forward to get your opinion. I sincerely hope business leaders start welcoming better economic intelligence. Not only for us but to finally serve better professionals who for market insights need the kind of data we publish.
Thank you all for the attention in this discussion.
Warm regards,
Martijn Oostveen
FocusEconomics / LatinFocus
Barcelona - Spain
Tel. +34 93 265 1040 / Fax. +34 93 265 0804 / Skype: fe_martijn
www.focus-economics.com / www.latin-focus.com
"FocusEconomics: Global Economic Insight with a Regional Focus"
LinkedIn: http://www.linkedin.com/in/martijnoostveen
Is that to hide behind the brand or personal failure?
I am a great fan of publications of KPMG International. I quoted them before and will do again as I fully agree with one of their latest published studies:
"Being the best Thriving not just surviving" - "Insights from leading finance functions"
What really hit me is the conclusions that;
A) Real business intelligence is still rare and it’s time to stop downloading and reworking.
B) Almost half of business leaders do not place confidence in numbers of current external resources.
Before putting my own input on these conclusions I would like to share some of the text from this study first.
"In today’s global economic environment, there are two key components to building greater influence – better business intelligence (right information, right time) and deep business skills (right people)".
Here I will focus on better business intelligence as we cannot offer the right people. We have them but they are not for rent, our intelligence is. The study continues with “Real business intelligence is still rare”.
“Business intelligence is a term that means many things to many people. Simply put, it is a collection of ‘intelligent’ information that helps business leaders make better business decisions that enhance shareholder value.
“When it works, it can deliver the real competitive advantage that business leaders strive for. It is the provision of robust business intelligence that in many cases differentiates top performers from the rest”.
“High quality business intelligence is driven by a collection of processes, applications and technologies designed to gather, store and provide easy access to information. At the heart of this, however, is data”.
Absolutely true! But do business leaders really want to be helped? When the data is wrong would that not be the perfect excuse for internal / personal failure? Would that in this challenging climate be a reason not to go for the “change”?
“In many cases it is the underlying data structures and hierarchies that are driving inefficiencies in the production of real business intelligence. These problems also contribute to why such a high proportion of business leaders place no confidence in the numbers presented to them”.
“Finance leaders should address these issues head on. They should invest to align data with key business metrics, and focus on getting to the root cause of inefficient data structures”.
What decides what is best (for themselves or the company)? I am confronted with finance leaders who assume they are fully covered. I would say wrong covered because would that indicate there is no better solution?
Business intelligence inefficiency in terms of cost and time are put aside as long as other priorities are in place in the current downturn. Short or long term vision?
“The recent market conditions have also illustrated the need for a much greater focus on cash and working capital information. The need for truly effective business intelligence, addressing multiple business dimensions, has never been greater”.
“Can the future of the finance function be manipulating data in spreadsheets to “cobble” together information for boards and investors? Top performers know change is needed and are well on the way to developing solutions that deliver real competitive advantage”.
To not only create cash on the short term more effective business intelligence is a must. Manipulating data by collecting certain information from the internet for example should be banned.
How can out of date info become guidance to the board or investors?
To make change business leaders should be willing to change first and to have the ability to change.
Only cutting costs and not spending smarter will not make the change while waiting for market conditions to improve a search for better business intelligence should become a priority instead of postponing.
"Adapting the finance function is now more urgent than ever, by providing the right information at the right time to help business leaders navigate through turbulent times".
Jochen R Pampel
Global Head of Financial Management - KPMG
It seems combining the words of Mr. Pampel and the above mentioned conclusions (A and B) point out that providers of business intelligence can only succeed when:
1. Distinguishing from others. By offering better quality data, more synergy such as time savings and finally helping cutting costs will be directly contribute to “change”.
2. Delivering the right information to the right people will help much better than receiving an overload of information (overlapping) or doing a non core business search internally. Especially now business leaders are more time limited than ever.
3. Finally the urgency as discussed by KPMG should not be interrupted by budget restrictions. Here I would like to give the following example:
Business threats are not only coming from industries and economies but also for example from a simple computer virus. Imagine tomorrow your office is hit by a new virus.
Would the responsible IT or other leaders postpone a cure because of budget restrictions and have to wait till the next budget cycle?
This is exactly what currently happens in regards to macroeconomic intelligence. While facing the worst economic decline in their own professional career many business leaders cannot access valuable reports.
Even when country reports on a monthly basis only cost a few dollars. Understanding this from a rational point of view can justify this decision but would that not undermine the current needs of quality information?
Or is it really like the computer virus that fighting an economic downturn can be done by not changing (improving) your information streams as this only can be done when market conditions have improved?
This might be the answer why almost 50% of the managers place no confidence in the numbers presented to them. I would rather say they lack own confidence in making a change or convincing their management to do so.
I look forward to get your opinion. I sincerely hope business leaders start welcoming better economic intelligence. Not only for us but to finally serve better professionals who for market insights need the kind of data we publish.
Thank you all for the attention in this discussion.
Warm regards,
Martijn Oostveen
FocusEconomics / LatinFocus
Barcelona - Spain
Tel. +34 93 265 1040 / Fax. +34 93 265 0804 / Skype: fe_martijn
www.focus-economics.com / www.latin-focus.com
"FocusEconomics: Global Economic Insight with a Regional Focus"
LinkedIn: http://www.linkedin.com/in/martijnoostveen
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