Dickens quote

Thriving After COVID – 3 Essential Steps (Overview)

Richard Sharpe Analytics & Big Data

Thriving After COVID – 3 Essential Steps (Overview)

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Summary

The impact of COVID-19 on global supply chains is unprecedented. For some, it has been a time of ongoing demand surges to meet customer demands. For others it has been a time of devastation and the need for restructuring just to survive.

Regardless of which position a company is in, most will continue to measure the impact of their COVID supply chain actions by traditional, higher level financial measures of revenue and profit. But what is being masked under these standard financial measurements? What percentage of your specific customers and products are actually driving 80% of your profits?

This is the time for the intelligent re-tooling of your business based on profit contributions by customer, product and channel. Re-tooling that breaks you away from the “Herd Mentality” that your competitors are pursuing.


Case In Point

A well-known, profitable retailer with 1,500 stores wanted to understand the impact of their current store discount policy. The analysis measured the SKU - store selling price against the Cost to Serve (CTS) for that SKU to each store.

The result, 25% of the 60,000 products had wide variances in profit performance across stores. Many were being sold at a price below the CTS for that store. This analysis provided visibility to a $35 million-dollar potential profit improvement opportunity.

Actions

But how do you get there? What are the roadblocks that come to mind? Most likely, they fall into three categories:

  1. concern over your data
  2. uncertainty on how to move beyond standard cost accounting measurements
  3. securing the right resources to harvest this information to get meaningful insights

The next three posting of this blog will address each of these roadblocks to provide an effective bridge to accurate and specific profit contribution visibility on an ongoing basis.

bridge

Please comment on this posting or email me at [email protected] .

All the best,

Richard Sharpe

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a profit contribution analytics firm that specializes in helping clients efficiently and continuously transform multiple sources of data into actionable operational insights.

Best Practice Bridge

Global Analytics Survey – Recognition, Frustration & Best Practices

Richard Sharpe Analytics & Big Data

Global Analytics Survey – Recognition, Frustration & Best Practices

Recognition

For three years, Competitive Insights has had the privilege to help orchestrate the Annual Analytics & Big Data Benchmark Study published in Supply Chain Quarterly and DC Velocity each year. As in past years, the responses from the participating companies indicate that most feel that they are early in their journey in achieving that full potential that is possible form Big Data Analytics as demonstrated below:

Big Data Maturity

 

Frustration

So what is holding companies back from realizing the full value that can be derived from the sustainable use of Big Data Analytics? Frustration for achieving success can be associated with people, processes, technologies and data related issues. The complete results of the survey is available by request.

Big Data Impediments

Action

How can companies accelerate their progress and get the most value from their Big Data Analytical initiatives? We endorse a “Crawl, Walk, Run” as a bridge to move from a state of frustration to one of ongoing success.

Best Practice Bridge
 

The following is offered as a quick checklist of best practices that we have seen work throughout the years.

Address the People Considerations

Bridge - People

People

  • Involve other functions early on
  • Avoid “one-off” single design efforts
  • Link value to key initiatives
  • Ensure visibility of Senior Levels

 

Consider the Best Process for Development

Bridge - Process

Process

  • Share success with other functions
  • Be intentional with your focus
  • Adopt a crawl, walk, run approach
  • Measure the direct financial impact

 

Use Focused Technology Techniques

Bridge - Technology

Technology

  • Design for business users (cross-functionally)
  • Apply Agile development techniques
  • Ensure scalability

 
 

Turn Data From a Liability to an Asset

Bridge - Data

Data

  • Gain organizational consensus on enterprise data sources (cross-functionally)
  • Focus the data design (not boil the ocean)
  • Invest in repeatable data validation capabilities (organizational trust)

 

Companies recognize that actionable knowledge that comes from Big Data Analytics is key for survival. Knowledge that allows for informed strategies and decisions that are fact based. Strategies that drive positive and meaningful results. Decisions that allows the organization to out maneuver the competition. Survival will go to those that accurately understand operational performance and the associated drivers.

I would love to know your thoughts on this.  Please comment on this posting or email me at [email protected] .

All the best,

Richard Sharpe

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

Blog Tariff baseball

Tariff Increases – Strike 3 “You Are Out!”

Richard Sharpe Analytics & Big Data

Strike OutSummary: In May of this year, the trade war between the U.S. and China threw a curve ball to many U.S. business operations with the U.S. Administration’s decision to impose 25 percent tariffs on $267 billion worth of Chinese goods and then China’s retaliation announcement effective June 1st.

For a number of reasons, many companies have been proactively diversifying their manufacturing and sourcing activities away from China.  However, it is fair to say that the June 1st tariff increases created havoc for most companies that import products from China.  How did they handle this cost increase?

Beyond additional alternative sourcing strategies, most companies relied on generalized policies focused on ways to absorb the costs or applying overall price increases (Strike 1).

Now, just as the start of the Holiday inventory build-up season, a second curve ball has been thrown; adding a 10% tariff on the remaining $300 Billion on additional products being imported into the U.S. from China.  Adding more fuel to the fire, China allowed the value of its currency to fall.  What are companies doing?

Many are making an intense effort to expedite their product shipments prior to the September 1st deadline.  Beyond that, most likely more of the same default strategies used for Strike 1 will be applied (Strike 2).

So what about Strike 3?  Why do some batters keep striking out while others seem to always be on base?  The winners come into the game knowing what adjustments they would make when the count is ‘against’ them.

What happens to your market position and profit margins if the President raises the tariffs to 25%?

The short-term strategies employed for Strike 1 and 2 above offer no guarantee of survival: 

  • Alternative country sourcing is smart but does not necessarily provide long term protection (e.g., tariffs levied on those countries)
  • Doing nothing is not an option unless you like fire drills
  • Creating generalized changes in pricing and discount strategies burdens all customers regardless of their value (profit contribution) to your company.

Continuing to follow these types of strategies will result in the market saying, “You Are Out” as your competitors poach your most profitable clients while protecting the relationships with their most valued customers. (Strike 3).

 

Points of Focus:  What is essential in developing effective tariff related strategies is to have a clear understanding of the financial importance of each customer that you serve.  This means going beyond measuring net revenues to precisely understand the specific profits generated by the products they are purchasing. For exact examples of creating these insights please refer to my earlier blog posting: Tariffs and Intelligently Protecting Profits

So why don’t companies aggressively pursue having actionable insights to effectively manage issues like tariff increases?  The excuses are all too common:

  • Not everyone in the organization believes this is possible
  • We are too busy and don’t have the time or resources to go after this
  • Our data is siloed and not as accurate or trusted for this type of analysis
  • We don’t know how to do this and are not ready to make a large outside investment to obtain this information
  • We are focused on this quarter’s results and will worry about long term strategies later

Said another way, we are doing good enough to get through this problem.  But just like baseball, you might last a few seasons with this approach but ultimately, your company’s market and financial position will suffer.  The winners worked out the best approaches before they season began.  Long before they face problems, they are putting the pieces in place so they are ready, not matter what “the count”.

The winners in handling tariff increases will have customer-centric strategies that drive desired customer behavior.  Applied strategies that smartly focus on absorbing the costs, increasing selling prices, adjusting discounting strategies or creating product substitution strategies to protect profitable performance and market share.

 

Takeaway: The mindset that “we’re doing well enough’ is a sure formula for Strike 3.  As the well respected business author and speaker Jim Collins states “Good is the enemy of Great”.

It is important to understand the financial performance of the products that customers are buying and then select the right strategies to drive the behavior needed to intelligently protect corporate earnings.  These strategies must take into account specific customer and product profit performance insights and their specific current and future financial performance drivers (e.g. tariff increases); drivers that can have a significant long-term impact.  Companies that overcome the typical excuses listed above will be the companies that win in their respective markets.

I would love to know your thoughts on this.  Please comment on this posting or email me at [email protected] .

All the best,

Richard Sharpe

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

Global Survey Results – Recognition, Frustration & Action

Richard Sharpe Analytics & Big Data

Global Survey Results – Recognition, Frustration & Action

The results are in.  At this year’s CSCMP Global Conference in Nashville, the Team of professionals that conduct, analyze and report on the Annual Analytics & Big Data Benchmark Study (Lisa Harrington – lharrington group LLC, Susan Lacefield – Supply Chain Quarterly, Dale Rogers – Arizona State University, Zac Rogers – Colorado State University and myself) presented the findings of this year’s survey (a copy of the presentation can be made available – see below).  The results clearly indicated that companies continue to recognize the need to gain business value from Big Data Analytics but that there is a significant amount of frustration across industries.

Challenges with data, struggling with meaningful analytics and ultimately getting to actionable strategies were clear drivers for this frustration.  As an example, look at the attached graphic on data:

image from www.ci-advantage.com

The good news is that companies are gaining a deeper appreciation for the business value that can be derived from Big Data Analytics and are being more objective with regard to the effort that is needed to achieve that value.  So what are some key steps to cross that gap faster?  Four primary areas and specific actionable steps were cited to drive success as depicted in the following graphic:

image from www.ci-advantage.com

So the race is on.  Companies get the fact that in the fast paced environment that we all operate in today, it is critical to make fact based decisions using the all of the transactional data that is available through a set of business user analytics. Decisions that drive competitive and profitable performance.

For a copy of the presentation, please contact us at [email protected]

Thank you,

Richard Sharpe

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

Beating Amazon – Winning with Offensive Strategies

Richard Sharpe Analytics & Big Data

Beating Amazon – Winning with Offensive Strategies

Blog36_playbook
Let’s be honest. If you look at most companies’ strategies to protect margins and market share being eroded by Amazon, the operative description would be “Defensive.” Over the last few months, Competitive Insights and the lharrington group have been researching what specific actions will help companies develop winning strategies in dealing with Amazon. The outcome is a three-part white paper entitled Tackling the “Amazon Effect”—Time for Offensive Strategies. Three key takeaways have been identified:

  1. Well beyond Retail. All industries have the potential to be seriously impacted by Amazon. Wholesalers, Distributors, Third Party Logistics (3PL) Service Providers, and Manufacturers must stop playing defense and go on the offense. Offensive strategies that are based on knowing where you make and lose money for every product, customer and channel combination. Competitve actions that reinvent customer service options, targeted product offerings and intelligent pricing models that take into account the full impact of discounts, promotions, and product returns. Continuing to build traditional competitive strategies using standard P&L levels of detail will result in market displacement. Plainly put, you can’t beat Amazon playing defense.
  2. To win against Amazon it is imperative to adopt a competitive ecosystem that is built on three tenets:
    1. Rapid access to precise and specific profit performance insights by product, customer, and channel.
    2. Utilization of this information to create strategies that break traditional siloed decision making through collaborative, cross-functional decisions.
    3. Setting organizational expectations that that this type of information is the foundation for consistently creating winning competitive strategies, even as business conditions change.

  1. To gain maximum advantage, each industry must use these actionable insights to drive and protect their sustainable ability to generate profits. Examples:
    1. Retailers introducing value-adding services that drive consumer purchasing of profitable product portfolios.
    2. Wholesalers & Distributors understanding the true profit contributions of each delivery location and the specific profit performance of the products that each customer is buying.
    3. Manufacturers using profit performance insights to intelligently make informed decisions regarding product variations by channel and customer category.
    4. 3PLs increasing customer loyalty and retention by providing innovative value-added services, with a focus on making their operation and their customers more profitable.

The impact of Amazon has become the “bar” against which companies are being measured by their customers, either directly or indirectly. Companies will not survive if they continue to use functionally siloed, defensive decision-making.

Companies must decide how to compete, collborate, emulate, diverage from, merge with, and/or capitalize on the Amazon Effect. They must be able to quickly and effectively measure the financial impact of decisions with actionable cost and profit information. Information that is trusted throughout the organization.

The choice is simple. Go on the offense to win the game or just be another losing statistic in the rapidly changing playbook.

Want to know more? Please contact or Competitive Insights at [email protected] or the lharrington group at [email protected] 

We would love to hear your thoughts!

All the best,

Richard

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

Supply Chain Digitization – A Reality Check

Richard Sharpe Analytics & Big Data

 

InternetOfThings

Today, I am going to switch gears to focus on the hot industry topic “The Digitization of the Supply Chain”.  This subject is getting a lot of attention in the media especially as it relates to the Internet of Things (IoT).  According to Gartner, by 2020 there will be 21 trillion devices streaming information empowered by the IoT.  Information on everything from the current performance of a part within a machine to the current location of my dog.

I get the industry buzz about the digitization of the supply chain.  But I have to ask myself the question; “Other than specific performance/event notifications, will companies really gain the true business value that is possible from this exponential growth in data?

Today, corporate enterprises have no shortage of data.  Data from their ERP, supply chain, finance and sales related systems, just to name a few.  Data that is often siloed and often hoarded by functional organizations.  Even with the ongoing investments that companies have made to access, visualize and manipulate their data, I often hear the statement “we still cannot get the insights we need from the information in our systems.  We aren’t realizing the return on investment we had hoped for and expected”.

In June of this year I ran the Analytics and Big Data Track for the Chief Supply Chain Officer Forum hosted by EyeForTransport.  It was a great day and a half spanning subjects from Data Governance, supporting enhanced S&OP processes and strategic initiatives all through the proper use of analytics and data.  The consensus from the discussions was clear.  To get real value from data you must have VACA:

  • Having processes in place to ensure the VALIDATION and quality of the data
  • Being able to have timely ACCESS to the data
  • Gaining CONCENSUS that the right data that is being used to solve a problem
  • Applying the appropriate ANALYTICS on the data to drive actionable insights that improve the performance of the business

Sounds pretty obvious, right?

However, if we are being honest, how many companies can say they have mastered VACA for the enterprise data they have today?  If not, then how is adding additional finite pieces of data that comes with the digitization of their supply chain going to help?

I think a reality check is required.  Clearly, nothing is going to slow down the exponential growth of data and the digitization of supply chains.  There will be a continuation of great success stories such as the ability to catch the failure of a critical component of a machine before it actually fails.  However, to gain maximum value, companies need to prioritize and act on their VACA capabilities.

The smart place to begin is with the data that already exists within the enterprise.  The smart money is to extract the value from this information before starting to add significant volumes of IoT data.

Without effectively addressing VACA requirements, the digitization of the supply chain will increase the data related headaches that most companies are wrestling with today.  With VACA proven and in place, the lessons and experience gained can then be applied to the new data that will come from future supply chain digitization investments.

I would love to hear your thoughts.

P.S. – get this right and you can take a VACAtion!

All the best,

Richard

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

Addressing Barriers to Success – Technology

Richard Sharpe Analytics & Big Data

 

This is the third posting of a series addressing the barriers to success in gaining sustainable value from analytics and big data.  The series centers around the primary pillars for having an effective solution: peopleprocess and technology.  This posting is on technology.

There are a variety of reasons that technology can be a handicap when trying to apply analytics to provide meaningful business insights.  I have witnessed numerous examples for a variety of companies over the years.  But today we are going to focus on four areas that are pervasive today:

 

Lack of organizational confidence in the data:  when I was running CAPS Logistics we served over 16% of the Fortune 500 companies by supporting their network optimization and transportation and routing & scheduling needs.  Unfortunately, about half of the improvement opportunities identified through the use of technology would not be fully implemented because someone in the organization would take exception to the data that was used for the analysis.  Talk about a lack of ROI!

Takeaway: To get value from analytics and big data, you must invest in a process to ensure that all organizational objections related to the data are addressed.

 

Analytical results that are not intuitive:  to be most effective, analytical applications must be designed for business users, not data scientists.  This means that the analytics are focused on a business problem defined by the business user and that the results are intuitive and meaningful for that user.

Takeaway: Needing someone else to run the analytics or to interpret the outcome of the analysis places a real handicap to value.

 

Difficult to repeat:  we are all aware of the speed of change in the world we live in today.  The days are gone when a company can rely on the outcome of specific analytical work to remain valid for an extended period of time.  Today, the mode of operation is to refine plans by making incremental (“course corrections”) changes versus a large analytical study done every two years.

Takeaway: Analytics must be easily performed on an ongoing basis and must have the flexibility to be changed based on early efforts and insights.

 

Hard to measure financial impact:  to maintain senior level support of your analytics and big data initiatives, they have to deliver value.   Naturally, there are some initiatives that have intangible benefits but typical senior-level sponsorship is based on a plan demonstrating that the investment will provide measurable financial improvements.

Unfortunately, many people don’t take the time to carefully consider how they are going to measure financial results until they are well into the initiative.  Do not fall into that trap.  First consider how you are going to baseline current performance.  Once defined, tie the anticipated areas of improvement back to the baseline for defensible measurements.

Takeaway: Careful planning on how you will demonstrate value needs to be part of any analytics and big data initiative.

 

The effective use of analytics and big data can drive significant competitive advantage.  Companies that undertake their initiatives by placing the proper amount of priority on people, process and technology will be the winners.

I would love to hear your thoughts.

All the best,

Richard

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

Addressing Barriers to Success – Process (Moneyball anyone?)

Richard Sharpe Analytics & Big Data

 

Have you ever heard the following question when trying to solve a business issue? What is the issue?  We have always solved this problem this way!”  We hear this type of response from many companies when talking about building laser focused performance strategies using analytics and big data.

The good news is that we also have found companies that have leaders that are Champions for Change.   However, their biggest frustration is the resistance they encounter to a new idea or new way to solve a problem.

“That would be a huge change in the way we do business”

“We’ve never done it that way”

“We aren’t ready for this”

The same was true in the movie Moneyball portraying Billy Beane, General Manager of the Oakland Athletics (played by Brad Pitt).  Billy didn’t have the payroll to compete with the big city teams like New York and Boston.  What he and every team had was an abundance of data on players in the major and minor leagues. Beane challenged his staff to fill playing positions in a new way.  Beane focused on player selection based on a specific type of performance analytics called Sabermetrics.  Billy found value in players that other teams did not see. Do you remember the scene?

 

 

The Oakland A’s used analytics in new ways to identify young players or out of favor players who are more productive offensively and defensively.  They defied conventional wisdom and built their Team using a new form of analysis and the data that was available.  They go on to win their division.  The poorest team in baseball with the smallest budget wins.  That is a truly remarkable story.

The story doesn’t end there.  As the A’s continue to win, players start to be recognized as stars.  The A’s also begin to see performance issues with some of their players.  So they make trades with other teams who evaluate players the same way they always did.  For the emerging stars, the A’s get new talent and give up players they couldn’t afford to pay anyway. For the slipping players, they avoid the down years and rebuild the team.  So the A’s end up in the hunt, winning, year after year.

What was different?  Billy Beane decided he would change the decision making process of selecting players with the use of a new form of performance analytics BEFORE anyone else.  He met incredible resistance because no one had ever done it that way before.  He championed its use in the organization even though most of management wanted to do business the old way.

All companies are hoping to get meaningful value from their analytics and big data initiatives.  Unfortunately, many lack the energy to get the full value by breaking away from established decision making processes.

Integrated Business Planning (IBP) is the practice of embracing descriptive, diagnostics, predictive and prescriptive analytics with big data to enhance or change specific business processes in order to outperform the competition.

Do you want to be the leader in your company and industry, even in the face of fierce resistance?  Are you willing to be the champion early in the game?  In many organizations this is exactly what it will take.  Just like Billy Beane, after others catch on, the use of actionable analytics will be the norm and the competitive advantage of moving first will be lost.

The smart companies will lead from the forefront using an IBP platform tailored to their specific business needs!

One caveat.  Just because you adopt the use of IBP analytics and big data does NOT mean Brad Pitt will play you in a movie.  But then, maybe he would.

I would love to hear your thoughts.

All the best,

Richard

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

Addressing Barriers to Success – People

Richard Sharpe Analytics & Big Data

Recently I was listening to and interview on Bloomberg Business with Eric Schmidt, Executive Chairman of Google, and Civis Analytics CEO, Dan Wagner.  They were talking about the power of big data and analytics. The interview was entitled Why Data Analytics Is the Future of Everything.

Their message was very clear.  Coupling effective analytics with big data can change everything from the creation of corporate strategies to the way that people vote!

This is certainly a hot topic in the Supply Chain industry.  In a recent benchmark study done by SupplyChainDigest™, 88.3% of the company participants said that the potential value that they could derive from analytics was a good or outstanding opportunity.  However, 63.9% of the same participants noted their analytical capabilities were very basic or not advanced.  Only 10.7% felt that their analytical capabilities had moved to an advanced level.

So what is holding back companies in developing the capabilities to actually realize significant value from analytics and big data?  It boils down to the same three cornerstones or building blocks of every effective solution; the People involved, the Processes they follow and the Technology selected to enable the solution.  Therefore this posting is the first of three.  Today we will address People.

Let’s start with the top of the organization, the Executives.  Every Executive makes decisions based on the best information available at the time they must decide, even when they know the information is lacking or incomplete.  Every Executive would say that they value meaningful and actionable insights that could help formulate and lend support to corporate strategies. Strategies that help drive higher profits and / or gain market share.  However, here are a few questions:

  • Are they willing to be a first mover within their company to invest in the effort for advanced analytics (see earlier Change Agent blog) or are they waiting for others to take this initial step?
  • Are they communicating their support to the organization so that everyone knows that creating effective analytics is a high long-term priority for the business?
  • Finally, are they creating ways for the organization to celebrate the ongoing success that is being realized through this investment?

Let me share a story from the time when I was the President of CAPS Logistics.  CAPS was on the forefront of creating supply chain optimization solutions and served over 16% of the Fortune 500.   We were finalizing a deal with a large corporation for a national deployment of routing and scheduling software.

The CFO of a potential client organization and I were in my office finalizing a deal and the deployment plans.  During the conversation, the CFO stated that he had a particular deployment approach that he wanted to use.  I listened carefully and certainly wanted to make him happy and to close the deal.  However, I knew this approach would not work and diplomatically told him so.  Needless to say, he was not happy and said it was either his way or no deal.

Normally, one does everything they can do to satisfy the customer but in this case I could not justify his substantial investment in a plan doomed for failure.  The CFO left my office with no deal being finalized.  The next morning, I received a call from him asking that we meet again.  Later, he shared that he respected the fact that we were so confident about the right way to do this and that he wanted to follow our plan.  That result lead to 5 national deployments of the software and he became the most active executive in our customer base to find clever ways to communicate to the entire organization the strategic value of this effort. The CFO was a barrier to the organization’s success, but it was good that the CFO caved in and broke through the barrier.

People issues extend beyond the Executives. What about the people that are actually performing the analytical activities?  In many cases, the most meaningful results from the application of analytics will be gained if the analysis is done by Business Users not Data Scientists (see earlier blog on business users not data scientists).  To ensure that maximum value is derived from your analytics and big data initiatives, your Business Users need to:

  • Have a good working knowledge of the business in order to recognize opportunities that are uncovered through new insights on customers, products or channel performance.
  • Have received the proper training on how to integrate analytics into their problem solving skills versus self-taught, hands on training
  • Have confidence that the data they are using is valid so that they remain on point in answering specific questions and solving prioritized problems versus having the distraction of defending their analysis to the data nay-sayers.
  • Be open to working with their cross-functional counterparts to involve them in the analysis and to share analytical results to take advantage of enterprise based tactics and strategies versus “siloed” decisions.

Politics, cultural norms and / or just the reality of different personalities can also pose issues as you advance your organization’s capabilities to drive profit improvements through the use of advanced analytics.  The key is to find ways to work through any of these issues in order to obtain a “win” for the organization that helps build excitement, buy in and momentum. Eric Schmidt firmly believes that coupling effective analytics with big data will change everything. If you believe in the wisdom that has driven Google’s success, these changes will lead to organizational wins that demonstrate financial performance improvements and that solidify the organization’s commitment to analytics and big data.

Everyone likes to be on a winning Team.  If your people issues are addressed, you will be better positioned to continue to build financial success stories using analytics and big data.

I would love to hear your thoughts.

All the best,

Richard

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.

We Have Always Done It This Way . . .

Richard Sharpe Analytics & Big Data

 

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In this blog, we will address how to maximize the value of analytics and big data. A lot of attention is being given in the media to both of these topics. What is not being discussed much is the basic question:

Is your organization ready to actually embrace making decisions and setting strategies based on new operational insights and facts versus on traditional information, experience, tribal knowledge and/or opinions?

Let’s assume that your organization has invested in the ability to gain meaningful insights about your internal operation, your customers and the marketplace from analytics and big data. You are now at the Intersection of Change to integrate this information into your business decision making processes. How will your organization act? Will those insights be fully embraced, cautiously considered or mostly ignored?

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Naturally we are not discounting the value of using experience and knowledge of the business in making smart decisions and setting future business strategies. However, companies now have the opportunity to embrace the insights gained from analytics and big data and use that experience to create cross-functionally developed strategies that break functionally siloed decisions! Decisions that will benefit the financial performance of the enterprise and not just specific functional operating metrics.

Let’s think objectively about your organization’s ability to facilitate change. Which of the colors below would you assign them?

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My guess is that most companies, if being honest, would assign their organization a red or yellow rating. Therein lies the problem. 

In order to get the most value out of your investments in analytics and big data, you must provide the leadership and commitment to address change management issues. Often, it takes the leadership and courage of one person to say, “Just because we have always done it this way, doesn’t make it the best way, or the only way…we can do better!” We call this person, the “Agent of Change.”

During the transition, the organization will push back. There are always reasons to return to the older, more comfortable way of doing business. The organizations that recognize that the wisdom of senior management will be improved and more highly prized when using analytics and big data will be the ones that gain significant competitive advantage. Those who do not have “Agents of Change” will see very little in the way of ROI from the analytics and big data investments.

Here is a great source for Change Management best practices: Harvard Business Review

Are you ready to be the “Agent of Change”?

All the best, Richard

Richard Sharpe

Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.