OC CIO Roundtable Minutes 9-11-08

Southern California/Orange County CIO Breakfast Round Table
September 11, 2008 meeting

Present: Paul Gray, Omar El Sawy, Joel Manfredo, Jeff Reid, Kirk Minami, Randy Farner, Randy Miller, Rich Hoffman, Steve Wallace, Jennifer Curlee, David Mann, Jeff Hecht, Sean Brown, William Zauner, Jim Sutter, John Pringle, Dave Phillips

We welcomed Kirk Minami, Aviana Global, and Steve Wallace, Hansen Beverage, to their first meeting.

We reminded members about the evening event of September 17th from 5:30 – 7:30 p.m. on SaaS, sponsored by SAP and RJT Compuquest.

The minutes of this and prior breakfasts are available online at the Peer Consulting Group’s website, www.peergroup.net, with links to the host’s presentation material, when available. Please provide us with the “url” of your presentation materials.

Topic: Analytics - Maximizing the ROI from the BI investment

Paul Gray, Professor Emeritus at Claremont Graduate School, defined BI systems as a combination of data gathering, data storage, knowledge management with analysis to evaluate complex internal and competitive information, and present quality results in a timely manner. See slide 5 for the relationship of BI to DSS/EIS, data mining, OLAP, data warehouse, Web 2.0, CRM/DB marketing, and GIS. It is not sufficient to look back at internal performance data, or past competitive results. It is important to provide analysis tools to produce “what if” scenarios and make the analytic tools and results available to many in the organization, not to just a few planners. Paul showed examples of Web 2.0 bashups, combining many sources of data. Web 2.0 user-friendly interface allows for widespread use of such systems. The challenges include data quality, common data definitions and having the right infrastructure. There are many implications for the CIO (see slide 17). CI (competitive intelligence) is a systematic and ethical program for gathering, analyzing and managing external information about your competitors, which can affect your company’s performance. There are many sources of CI, such as government databases, online data, interviews and the media. The problem is not lack of information but the ability to use it effectively. There are many vendors of BI systems (see slide 25). There are many BI managerial issues – it’s about understanding your own position and performance, your customers and your competitors, and disseminating that knowledge to many people in the company. The technologies for BI and CI are getting better, as part of a better DSS capability. Paul attached a list of references, including “Successful Business Intelligence”, by Cindy Howson, and a review of “Competing on Analytics: The New Science of Winning” by Tom Davenport & Jeanne Harris.

Paul's slides are at: http://www.slideshare.net/occio

We asked members to share with us their experiences with BI and Analytics.

Omar El Sawy, USC, thanked Paul for his presentation. He took a stab at defining the difference between BI (focused on presenting the data from various sources) and Analytics (trying to use tools to gain insight from the data). He saw lots of integration between process workflow data and intelligence, which changes the way ROI is viewed as more part of the process. The science of exceptions is becoming better, but there is a lot of skepticism out there on the ROI of analytics.

Joel Manfredo recalled when he was in the leasing business in 1996, he was focused on the long process, from concept to building to leasing and you could be dead before you knew it. He was focused on collapsing the cycle time, and used BI tools to help. He also was interested in analyzing demographic data, using Cognos for reporting, which is invaluable in retail, like Starbucks, although it didn’t seemed to stop them from opening a store on every corner!

Jeff Reid, Toyota Material Handling, said that they used the SAP tool to get at their data. So far they pull together data from 4 of the 7 or 8 processes, and intend to extend it to all the processes. Fundamentally, it’s about getting the right data at the right time to the right people, so that better decisions can be made.

Kirk Minami, Aviana Global, shared with us information about a project he is working on in manufacturing. It is an early warning detection system, analyzing data from customer problem call logs to spot problems with the manufacturing process that might be causing units to fail, and to indicate what early steps can be taken to solve the problems at inception. The payback is huge.

Randy Farner, Vitreous Solutions, recalled from his experience with the Auto Club and Mercury. They used data mining a lot to analyze data on their Terradata platform, and the results were very good for CA. The Auto Club used a rich array of tools to help them drill down.

Randy Miller remembered fondly his days at Toshiba ABS, where he worked with Steve Wallace’s wife on a BI project using Cognos. In that project, 85% of the sales were made in the last 3 days of the month, and so the reports were produced every hour and studied intensely. The CI tools produced reports on the competition but despite the forecasts, this did not seem to influence change.

Rich Hoffman said that DW and SAS seem to have been around forever. Maybe Analytics is a new wrinkle. In the auto industry they have used BI for many years, tracking things like real time comparison shopping on the web, customer retention, conversion, faster failure diagnosis, repair order tracking, etc. He has noticed of late that they won’t hire the necessary Ph. D’s to do the job properly, and won’t spend the effort to cleanse the data.

Steve Wallace, Hansen Beverage, said that this discussion was very timely as they are going through a maturation cycle, which will affect processes, systems, and their global reach. In the past, they only reacted to BI – now it is part of the equation, and they are developing lots of pockets of CI, which will enrich the reports.

Jennifer Curlee, Surefire, said that they have just finished implementing an ERP system, with the help of a consulting company, which they hoped was going to push them into BI, document management, etc. Unfortunately, they have found that they products are only interfaced, not integrated with one another, and data definitions are not consistent. This turns out to be an opportunity to start a new DD project, and to drive that effort deep into the organization.

David Mann, Word & Brown, said that they too are starting a major initiative, including BI. The major challenge is to define the ROI, and this presentation and discussion will help. They are blessed with having12 to 22 years of data to mine

Jeff Hecht, Word & Brown, thanked Paul for his presentation and said that Paul forgets more about this subject than he will ever know. The focus of their initiative is to present data in a better way, one that adds value to the data, but it’s hard to get people to believe that better information with result in better decision-making. Our executives have a hard time believing that a computer will make a better decision than they can.

Sean Brown, RJTCompuquest, said that his company is making a significant investment in BI, and in becoming experts with the SAP analytic product and tools. They are aiming to generate real time ROI from the use of these tools.

William Zauner, JAMS, said that his company has a customized BI system. Each of their judges is treated as a mini profit center, and they use analytics to their competitive advantage as part of their recruiting strategy. The next phase is to use Business Objects to do “What if” studies to change the business focus.

Jim Sutter, Peer Consulting Group, said that the Gallo Winery used a host of BI tools, like Cognos, to help them with strategic pricing each weekend. They are in the process of moving to the OutlookSoft product, because of its Excel look and feel. They have also consolidated their BI efforts, and now have a director of BI in IT. He liked Paul’s mashups for CI and is helping start-up companies get a handle on their competitors by tracking contacts on Linkedin, etc. to find out who knows who in the other companies.

John Pringle, RCMT, said that he was the DSS manager in MacDonald Douglas many years ago. He now uses a tool called DIVA to track KPI, performance tracking by sales person, dashboards, charts etc – when you visit John’s office you see them posted all over the walls.

This was a very good session, thanks to Paul’s presentation and excellent handouts.

See you on October 9, 2008 – 7:00 a.m. in the RJTCompuquest conference room at:
940 South Coast Dr., Suite 260, Costa Mesa, CA 92626.