Request:
This week I was asked to explain more about our company, what we do and where we distinguish ourselves. Referring to our website seems not always enough and I do prefer personal contact by sending some recent reports and exchange thoughts by phone later.
I decided to make an exception. In this blog normally I only would like to have an indirect motive to combine my opinion with my work.
Nevertheless it seems a lot of professionals have no idea what we do or what we do for their competitor, government, central bank or even university.
Lacking the time to make a real fancy article I decided to keep it simple. At the end it is simple;
We improve your macroeconomic forecasts data of 50+ countries world wide by offering more quality, creating costs and valuable time savings while our fees can be up to 90% lower than your alternatives.
Get your economic forecast differences in 2010!
One of the most difficult parts of economic forecasting is avoiding damage while having very high costs.
The past years due to the economic slowdown forecasts lost most of their value. All forecasting sources lacked visibility and 2010 looks like a bumpy ride. So, what is then left? Synergies?
When talking about economic forecasts in general people claim only to look at them once or twice a year. When dealing with domestic markets, a small business or in non management position this might be possible but not in a regional or global role.
Some firms are less hurt by fast economic changes but they still make costs of monitoring.
When dealing with for example financial/strategic/demand/ planning, treasury activities, management reporting, business decisions, international salary calculations, new market entries etc. this is absolutely more frequently.
The past years should have wake up professionals and increased their demand for better economic forecasting tools or at least more efficient ones.
The combination of no value and high cost in a downturn can no longer be ignored. Let’s have a look at how most companies deal with this kind of forecasts during a period of 12 months.
Alternatives for economic forecast data:
1. Companies use the same source for macro as for industrial specific / sector data; the large traditional global providers.
While it might look efficient to keep all under the same roof there is hardly any advantage, especially in the past years.
Why relying on a single source? Would you accept that when your Pension Fund is managed by one person?
Sure, it is easier to administrate or to get approval. But cost / benefits remain at a very low level and there are no extras such as savings.
In fact people need more time to separate industrial from macro while others to avoid one opinion only use extra core time on internet to find more forecasts.
2. Companies cancel all or most of their external data providers to save costs.
A good example of mismanagement; cutting subscription costs but creating more labor costs as people now have to do their own data searching and compiling.
Sure, cancel what you do not need but what you need, do not do yourself by inventing the wheel.
Here costs can increase with almost 100%. Being on the payroll is a definitive direct cost, even when having lesser personnel, extra hours are directly wasted and much higher than fees of external providers.
Labor cost example:
Professionals on an average look at a certain country economy (outlook, indicators, forecasts) at least one hour a week. A variety here can occur as some months might be more important but per month a total of 4-5 hours is easily reached.
As these man hours are coming from mid and higher management the average hourly salary would around US$ 50. This brings costs of only monitoring macro per year at US$ 3,000 for one person.
Excluded are risks of using wrong data and the total expense depends on the size of the company. But either having 100 or 10 people the costs are too much.
Conclusion:
Some do not care. They have a budget and they order without looking at the benefits. Purchasing a brand identity is easier than purchasing value.
Others see improvements as a threat or believe appointing the management of the differences cannot lead to positive contributions (for them).
When using data providers it is important to choose those that can really help. Look at the alternatives for example. What is overlapping and what has the best ROI for example?
Keep core data about your industry or sector separated. Besides your own internal knowledge it is easier to integrate than combine it with macroeconomics.
Do not underestimate macroeconomic data by copying it from free sources. Out of date information can do more damage than good. And stop wasting corporate time on own economic research. It is not your core business, so why getting paid or budgets for it?
On top of core business changes a difference can also be made for non core, such as economic data. Instead of extra costs this can result in cost savings up to 90% and time savings which can be used better for core activities.
As long as traditional providers do not add extras or can demonstrates their values in downturns people should keep looking for better alternatives and smarter spending.
Remember in good times it is easier to make results or develop research but has your company already left the uncertain market conditions? Are budget restrictions off line and cost cuttings are no longer necessary?
How will your company deal with costs and values of macroeconomics in 2010?
When you are interested FocusEconomics can demonstrate the difference in terms of labor costs and valuable time for macroeconomic data inside your company.
Remember no one can predict economies. Why then spending more than necessary?
For a special offer for 2010 please contact me at; moostveen@focus-economics.com
Please select from the following regions; Americas, Asia Pacific or Europe.
Thanks and good luck with the business in 2010!
Mostrando entradas con la etiqueta emerging markets. Mostrar todas las entradas
Mostrando entradas con la etiqueta emerging markets. Mostrar todas las entradas
martes, 1 de diciembre de 2009
miércoles, 21 de octubre de 2009
"It's the economy, stupid"
"It's the economy, stupid" was a phrase in American politics widely used during Bill Clinton's successful 1992 presidential campaign against George H.W. Bush.
The recession at that time cannot be compared to the current one (in size and matters) but when looking at corporate campaigns the phrase has lost a lot of value.
Corporate spending on information has drastically been reduced as part of a total cost cut. This looks relevant and necessarily but what about economic intelligence?
Since May experience learn a lot about corporate spending behavior. Where outlooks remain grey and lacked with visibility it is not a surprise budgets for information have been cut.
Market conditions still show a volatility that should keep professionals informed of the potential business opportunity, even the smallest, which world wide is much decentralized.
This requires more time and stress testing to make sure when getting back into markets risks remain under control as far as possible.
Professionals in prosper times easier can make decisions as market conditions remain profitable but why not exploring better tools in desperate times?
To answer this it might be a false accusation but is it logical when economic outlooks are missing any visibility to continue with existing data providers or tools?
What makes decision makers decide to maintain essential economic information to support operations while the past 12 months no additional value was seen?
There can be five explanations for these questions:
1. They simply do not care or miss time to care. Business leaders, although referring to the economic impact on corporate development, do not look at macroeconomics or find them relevant in their decisions. They have other priorities.
This can be true because at certain levels, at the top, there is not time to monitor every country of interest. But what about lower levels of corporate finance & control, strategic planning, business development, market intelligence etc?
Why would in these departments managers not consider more effective tools for macroeconomics?
2. They leave these decisions up to their teams. Why would professionals not inform their upper management of possible improvements?
3. Only in good times it is allowed to spend on secondary information, such as macroeconomics. In other words when there is a budget left over.
4. A change would implement extra attention and labor to make the change successful. The fear of a change to distract people and learn another tool seems to override the potential benefits.
5. As discussed in other blogs it is fear itself of making a wrong decision. Rather no changes than any change that can jeopardize someone’s position.
Combining the above it still does not justify not welcoming improvements in terms of less spending, more time efficiency and overall benefits for each employee using macro to complete micro. What happens when nothing changes?
1. Total costs remain at the same high level or are even increased. While with current information providers discounts could be achieved any kind of synergy will be missed as long as additional benefits cannot be integrated.
2. Besides costs such as fees labor expenses are often higher because not all employees have access and need to find alternatives (internet is the worst alternative). People often forget to be on the pay roll.
3. Costs of risks cannot be calculated but when not improving any efficiency level operational results will rather decline than remain stable. Professionals in downturns often face higher work pressure and risks will be higher.
What can happen when making the right changes?
1. Total costs will be reduced as no longer (over) expensive and overvalued information providers are used or new tools are added to compensate them.
2. Corporate time savings will lead to lower labor expenses. As people have more time for core business, core business will directly benefit which increases the ROI.
3. Less stress and better time management can help risk assessments in for example market analyzes, financial reporting or strategic planning. Even business decisions are better supported.
Conclusions;
Instead of walking away from changes or being afraid of them it is better to consider them. It is too easy to claim satisfaction or sufficient access to available alternatives.
The past period has learn there is no such thing as “security”. When not being open for change will harm your corporation. It is then no longer the economy but corporate inefficiency, stupid!
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?
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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