In the world of data intelligence providers it´s evident macroeconomic data is not as appreciated or needed as industrial / sector related analyzes. It should be!
Could it be that both providers and users cannot do without a mutual stalled feeding process while competitive advantages can only be measurable when one provider outperforms the other? What do YOU get what is not delivered to your competitor?
Tailor made analyzes differ too much to qualify them similar to raw data because a consultancy service or support is more than sending a report with numbers.
For macroeconomic data there is a different qualification. Users of country data should more appreciate quality and efficiency but still the opposite is poignant.
Here an overview of the potential single sources for global (!) macroeconomic data and among them those providers most named the past six years (own experience);
- Global Insight
- The Economist (EIU)
- Oxford Economics
- Business Monitor
- Datamonitor
- Euromonitor
- Bloomberg, Reuters, Gartner etc
There are more but this is about giving an example of well known providers that have one opinion - their own - while they all offer (similar) industrial data too. A kind of one-stop-shop but then with one opinion while overlapping is common.
Now other alternatives for latest economic forecasts & outlooks are:
- Consensus Economics (our only global direct competitor but not in quality-synergy)
- Banks (amazing how strong people judge their own contacts and get "last" updates)
- Multilateral organizations and central banks (when you like 2-4 updates a year)
- Consultants (valuable but elsewhere, remain single opinion for economic outlooks)
This is not a "competitive study" or "total product comparison" but to point at who is outperforming who or indirectly calling for the leading position of macro data.
Years ago some of these above mentioned providers proudly presented how they beat a consensus (average) by using very little and not constant data but market rumors tell this can again be expected. It is time asking "how they do it"!
Unfortunately the past five years were hardly or better not successful in case of forecasting economic indicators globally. Would they proudly present failures too?
Before 2006 for example mostly the US was used and then those indicators that hardly moved such as GDP growth (though not split in consumption and investment) or unemployment rates. Sometimes even CPI ratings but as this again has many components it was not done regularly.
Hence, the US has always been a better analytic study place with weekly and monthly polls and surveys but although still existing it cannot be used at global levels.
With upcoming B(R)IC success and economic distress in the US and other G7 economies results of "out-performers" or "track records" were no longer seen.
Due to the crisis of the past years it is unlikely there are out-performers or those that constantly beat the average in these fast changing global economies.
Conclusion:
Outperforming is hardly possible in forecasting. Using some "soft" years of lesser volatile ones combined with stability is no guarantee for future predictions. Like with investments this should be stated officially and never be used as a feature.
Fortunately for the mentioned providers or other firms dealing with forecasting many in the corporate industry do not care, even not after experiencing the last downturn.
Unfortunately this will not benefit those who care because "no interest in macro" is not because of an immunity in their corporate results, strategies or planning.
"No interest in macro" (improvements) is too often related to the decision maker who uses personal and not business reasons like not willing to discuss or a narrow mind.
The coming years traditional data providers will face hard times when not being able to distinguish (further & better) their services and performances.
Corporate time is much more valuable than "time to read nice economic background stories" or "collecting at internet outdated information".
Risks always demonstrate how difficult they can be measured or tested. Afterward it is easier concluding and making decisions. Industrial leaders should know better.
Finally "purchasing a brand name", "knowing someone at board levels" or "protecting budget to save my job" will no longer be valid due to the ongoing macro complexity.
Getting away with excuses will no longer benefit the organization in downturns, in recoveries and periods of stability or growth. Can your firm afford otherwise?
Macro is no longer a secondary intelligence since no one can constantly outperform others while forecasts are constantly adjusted do to fast country changes.
When a track record or past performance no longer is a guarantee for future predictions what is left is a decision to take that data offering most synergies!!
Mostrando entradas con la etiqueta macroeconomics. Mostrar todas las entradas
Mostrando entradas con la etiqueta macroeconomics. Mostrar todas las entradas
jueves, 14 de octubre de 2010
jueves, 17 de diciembre de 2009
Purchasing brand identity is still preferred. But for how long?
Client behavior:
We are now in business for ten years and the last five years I had the chance to discuss with a lot of business leaders world wide.
From non cooperative narrow minded fearful closed managers to final customers who took the time to listen to the alternative for our kind of market data.
Before discussing end proposals it is interesting to hear alternatives. It is sometimes amazing that professionals take the fast lane instead of studying all alternatives. You almost hear them thinking "It is a corporate expense, so...?"
You expect in good years professionals take more their time in selecting data providers by looking at quality and in bad years a similar research is done with the focus on synergies.
This will avoid in hard times cost cuttings put an end to certain valuable data receiving or they is simply no interest in knowing what adds or what is a waste. The corporate pressure on saving is higher than on long term value.
Now most of the downturn looks like to be behind, for the time being, it is interesting to study how professionals have been dealing with their challenges in regards to market data providers.
For example in case of financial or strategic planning decisions these last years, surprisingly, many have been using one source (data provider) only. Imagine in a downturn still relying on one opinion.
What causes that kind of strategy? Lack of interest in others? Avoiding changes? No maximum budgets?
As we do not consider the global leading market data providers as competitors I believe my following comments are not without arguments but I have no problem with mentioning one of them.
This is based on feedback from others and many of our clients use them as a source. I will not criticize their services but use them to show the difference between a single source and for example how we use a multi-view of sources.
One source only:
Besides planning our kind of data of the underlying economies in countries of interest in many cases come from the same source as the sector data.
Reasons are diverse; from administrative advantages to not knowing or willing to know the alternatives.
Some even claim only to need industrial information which depending on the role in the company I can agree with. Others, even worse than using one source, use free sources such as internet. Like out of date info or extra labor costs add more value.
When a demand planner or CFO of a Retailer uses for example Global Insight for their food sector analyzes included are macroeconomic data like forecasts. A combination (package) of sector and macro from one source.
Who is the expert?
Now I can imagine when analyzing for years a food sector you learn and you can become an expert. But an expert in food is different from an expert in economics. At a corporate level with a retailer you are probably a food expert. So, you should in fact already know more than others about your business.
The same is when studying economics and explaining the food sector. We do not do that for example. It is for both client and provider better to stay in your core business.
The past years I do not believe sector experts were able to predict better the markets than economists. Every one lacked the same visibility and for many countries / sectors this continues in 2010.
There might be exceptions but they were either not contacted, they were not seen as reliable or they were ignored. Otherwise the world would have looked different many times.
Too long too positive:
This is about logic. In good times, I was reading about an upturn of ten years before the last crisis emerged, it is easier to make your analyzes come through or realistic.
No one for commercial reasons will become critical about the markets of their clients and as long as it continues, let us keep the positive mood!
Imagine a global provider would completely turnaround a certain sector trend. It hardly happens, even not in for example stock markets. The risk is too high and clients are at stake.
The continuing positive mood is partly responsible for crisis in the Finance industry. In theory all sectors have had the same models of too optimistic ratings. Only Finance works faster than Food.
A close call was the Automotive industry. Merely because here besides an oversupply, we cannot digest more cars before economies recover or become profitable, the industrial leaders did an overkill themselves by too late reformation and innovation. Still there is a lot of resistance.
When looking at market research reports, besides links to alternative energy sources or smaller different cars, the world kept overwhelmed with weekly models.
That required analyst to write again reports (positive) and any other kind of PR necessarily to promote the new vehicle. Another example of keeping the statu quo.
Optimism is here again:
As said other sectors like food might not have had the same experiences from a business model but from a market research model they did.
Even though some countries look like to have escaped (
Again, I might have not read all reporting out there, but the point is that it is much easier to predict a positive market than a negative one. Even in a downturn.
When writing negative comments the chance your report is bought is lower than writing you have good arguments the momentum is changing.
This is accepted, maybe already since the industrial revolution, and it will probably not change fast. But what needs a change is predictions for macroeconomics. That is not similar to market or sector outlooks.
When counting we alone have more than hundred selected different opinions. Each month for 10-15 indicators per country. That comes to about 100,000 figures per month.
Still when it comes to a GDP or inflation forecast of BRIC, US, Canada, France, UK, Germany, Italy and other countries professionals prefer a single source like Global Insight.
The truth about forecasts:
I here can easily defend Global Insight because they seems to me in their field the best alternative but not when it comes to economic forecasts. For one and only reason:
Economic data cannot be relied on, economic forecasts are not realistic and economic forecasts are too vulnerable to take a brand identity for granted.
It is like years ago when they find out a chimpanzee had better investment rates than a group of highly trained brokers (from brand identity companies).
When we already receive for one indicator in
When they get closer the economy looks like to become more stable and with more differentiation the opposite, instability can occur. But nothing is certain in economics.
What is the price or value of trust?
So, where is the brand identity, the trust? Where when it comes to economic forecasts can be more received from Global Insight than others?
Can they like with stock markets constantly beat the average? Is there such outperforming available for economic forecasts?
Now before the last downturn in a period of for example five years it has been possible to come closer to certain economic predictions but not for emerging markets, only for developed ones.
Take for example the
When it comes to stock markets people decided that for any kind of advise or guidance final results cannot be relied on former or past performance. That has become a strict rule.
I believe that should be similar for all market analyzes or forecasts. Not only economic forecasts but for all kind of industrial predictions. Because who is finally going to be right? Do you get your money back when the results are worse than expected?
The fact professionals still choose for global providers such as Global Insight should only have a valuable reason, not a brand identity one.
Like for their clients this value has to be demonstrated in the current recovery from most bottom reached markets. This should be normal.
Purchasing without a reason:
Fortunately for them a lot of professionals see purchasing market data not as a valued corporate contribution. They purchase because they have to and because it worked. But does it mean there is no better alternative? When having one solution, the search for improvements stops?
Now for macroeconomic forecasts this model is changing I believe it will be changing too for any kind of sector information. On top were do business leaders take decisions based on one market scenario?
This will not threaten for example Global Insight but will give them and others the chance to adjust, to learn and to improve their services.
Professionals that purchase brand identity will always remain. But hopefully for their company this will change before the new uptrend is followed by another downturn.
Conclusion:
Looking ahead markets will get more complex and volatile. This requires value upgrades of data and separations of core and non core cannot be postponed because there are no longer more advantages than disadvantages.
Except for those who, when it comes to market data, do not care much about cost / benefits but they would not read this. I wonder if their management is aware of their lack of interest. Probably they will before the next downturn because nowadays getting a second chance is harder than before.
We are pleased to notice the downturn also has had the advantage of offer professionals a better priced alternative. By continuing improving and expanding we can even offer more of the same price-quality.
We might not become of the same sized brand identity like Global Insight or similar providers but we learned our customers do not care. They care about their company. Purchasing brand identity is still preferred. But for how long?
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, 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
Suscribirse a:
Comentarios (Atom)