David Goldstein's Weblog

Business Intelligence in SharePoint 2010

A client asked me what KMA knew about SharePoint 2010's business intelligence capabilities.  As a good consultant is want to so, I did some research and I thought I'd share the summary with you.  Chris McNulty, KMA's SharePoint practice lead, gave a presentation on the topic at the SharePoint Saturday in San Diego in February.

This slide is a great summary of SharePoint's capabilities:

 
Here's my quick summary of some these tools:

• The SharePoint Chart Web part is a quick way to display data that can be stored in a SharePoint list or if you're more technically savvy in Excel or a data base.
• Excel services allows you to display peices of an Excel spreadsheet in a SharePoint web part.  You can even do pivottable-like slicing and dicing.  Excel skills are required, but not coding skills.
• Business Connectivity Services allows you to display data that's stored in a data base as a list in SharePoint.  You can even edit the data in the SharePoint list and it will write back to the data base.  This requires data base query skills and knowledge of SharePoint designer.
• PerformancePoint allows you to generate and display KPIs and drill down into the data using a decomposition tree.  You'll need skills in building data cubes to organize the data, but once it's in SharePoint users can do lots of fairly sophisticated analytics.

This is just a subset.  See Chris' PowerPoint deck for more details.  I'll leave you with one more visual from the deck to help you think about when to use the different tools:

 
 
 

Business Intelligence and Profits

There was a nice column in yesterday's (4/24/2011) New York Times by Steven Lohr, titled, "When There's No Such Thing as Too Much Information."  He cited a new MIT study which found that companies that adopted "data-driven decision making" had a 5-6% higher productivity than other companies.  Erik Brynjolfsson and his colleagues surveyed 179 large companies and conducted follow-up interviews with some.

The researchers found that companies that not only collected but used data in decision making were the ones that benefited with increased productivity.  They contrasted companies that made decisions based on data and those that made them based on experience and intuition.

It's great to see some empirical data that backs up a belief that I've held for a long time.  When IT consultants implement data warehouses, business intelligence or analytics solutions, they often focus on the technology alone.  They also need to look at the decision making process.

When we have implementthese solutions.  We take a narrow approach, focusing on one key business process.  we can then work with decision makers to make sure they have the data and tools needed to analyze performance data and make decisions.  We do some of the preliminary data analysis to make sure that the managers understand what they are getting.

Analytics tools have been in existence for decades and are getting more powerful by leaps and bounds.  We're just starting to see that organizations are using these tools to make better decisions and that these decisions are leading to improved performance.  This is yet another example that it takes a while for management practice to catch up to the promise of technology. 

I'd recommend the NY Times article as a good managerially-oriented summary of the research.  It reinforces the important lesson that it's not the technology that matters, but how you use it.

Justifying An Investment in Social Networking Tools

We work with many companies to provide their employees, customers and partners with Web 2.0 tools.  SharePoint 2010 and many of the add-ins that work with it allow organizations to provide wikis, blogs, rating, and tagging and features that emulate Facebook and Twitter.  These tools can be provided behind the firewall (employees only), through partner or customer portals (to link with select outside parties), or through the internet.

One question that often comes up with our clients and prospects is: how do we cost-justify an investment in social networking tools?  A recent McKinsey Quarterly article, "The Rise of the Netowrked Enterprise: Web 2.0 Finds its Payday," provides some good answers.  Note: you need to register to read the article.

The authors surveyed 3,429 executives and asked both about the use of Web 2.0 tools and their organization's performance.   Here are the key findings from the survey:

• Companies are using social networking tools more when compared to previous surveys and two-thirds plan to invest in these tools in the near future.
• Over 90% of firms report measurable benefits from using these tools with increasing speed of access to knowledge the most reported benefit.
• About 80% of the companies were just getting started with Web 2.0 tools and reported only modest benefits.
• They split the remaining 20% of the companies into--internally networked (13%), externally networked (5%) and fully networked (3%).  These groups reported significant business benefits from their investments in social networking and other Web 2.0 tools.
• Fully and externally networked companies reported market share gains compared to their competitors.
• The heavier users also reported higher profit margins.

These findings should provide IT managers with rationale for investing in social networking tools for employees, partners and customers.  In our experience, customer and partner-facing tools are often easier to sell internally.

As you're looking at these tools, consider SharePoint 2010.  There are some neat new Web 2.0 features build-in.  If you'd like to learn more, check out our upcoming webinar on April 20: How to Enable 'Social' in your SharePoint Communities.  If you'd like to learn how other IT managers are using social networking, you might want to attend the April 14 Boston SIM panel.

 

What a Non-Technical Manager Needs to Know About IT

This is my second consecutive blog post that discusses George Westerman's ideas.  I heard himn speak at MIT Sloan on "Digital Leadership for Non-IT People."  I'm also looking forward to George's talk at next month's KMA-sponsored event on "Communicating the Real Business Value of IT" at Microsoft in Waltham on April 26th.

The discussion focused on three areas that a line or senior manager should know about IT to provide digital leadership to their organization.  They are:

• Digital platform--the manager needs to understand how well the organization's key transaction systems are integrated.  If systems are poorly integrated, it's very difficult to innovate and grow.  Adding a new service or product might require changes to multiple systems and making these changes might break other things.  It's also difficult to get information that spans multiple systems if your systems are poorly integrated, making it harder to make strategic decisions.  Unfortunately, integrating systems into a digital platform is costly both in budget and in management effort.  As your organization grows, you'll need to revisit the structure of its digital platform.  You might want to read some of Peter Weill and Jeanne Ross' work on Enterprise Architecture to get more background on digital platforms.
• Value-based investment--as you evaluate IT investments, consider their value to the business.  Computing ROI is one way to measure this.  Sometimes this is difficult because the benefits of the invesment are hard to quantify.  As an alternative, Westerman suggested "Value Dials."  Will the It invesment affect key drivers of profit such as, days inventory, headcount or turnover?  Once you make the investment, it's critical that you do a post-implementation review to see if the business received the value.
• Provoke innovation--IT is constantly changing.  There are always new ways that new technology can change the way your business is run or even the way you go to market.  As a business manager, you need to be educated in these technology trends and you need to encourage your organization to innovate.  How can social media tools support collaboration within your organization?  How can they be used to strengthen relationships with your customers or partners?  Can I achieve significant cost savings through cloud computing?  Be an intelligent consumer of IT trends and be willing to support experimentation and take risks.

I hope the above thoughts will provoke some innovation in the way you view the IT function if you're a line manager and the way you view line functions if you're in IT.  In either case, I hope to see you at George Westerman's talk on April 26th.

Four Sources of SharePoint Value

I attended the CIO Summit that Boston SIM sponsored on March 10 and heard a very interesting talk by Allan Hackney, SVP & CIO, John Hancock Financial Services.  He introduced a framework from Richard Hunter and George Westerman's book, The Real Business of IT:  How CIOs Create and Communicate Value.  Hackney introduced a two by two matrix (2x2)  that categorizes how IT can add value by improving business performance.  Here is the matrix:

 
Source: The Real Business of IT:  How CIOs Create and Communicate Value p. 96.

When I saw the 2x2 I thought of SharePoint.  It provides a good way to categorize how our clients are using SharePoint to to add value in their organizations.  Here are my thoughts by category:

• Optimizing: Sharepoint's workflows are a great way to improve business processes.  Our clients are using InfoPath forms to capture information, for example customer service requests, and route it to the appropriate employee based on request type, client, or other variables.  While many organizations use the workflows built into ERP systems for some processes, there are many other processes that can be automated using SharePoint.
• Reshaping and External Informing: We have used SharePoint to build customer and partner portals for several of our clients.  These portals make it easier for the customer or partner to do business with our client.  They might provide the partner with pricing information (external informing).  The portal could also open a new two-way communication channel between the customer and the seller, sharing information like service requests.
• Internal informing: Sharepoint provides a great way to get key information to employees.  We use project-based SharePoint sites to share key documents, calendars, and contact information with our project teams.  Our marketing document library is the definitive source for proposals delivered to our clients, making it easier for our sales team to gather the information they need to write a new proposal.

I'm sure I could think of dozens of other ways that SharePoint can add value using the Hunter and Westerman model.  I'm looking forward to using the 2x2 to help improve our communication with both IT and business leaders.

Applying Technology to Knowledge Work

I just read an interesting McKinsey Quarterly article by Tom Davenport, "Rethinking Knowledge Work: A Strategic Approach." You'll have to register with McKinsey to read the article.  It's worth the effort.  Tom has been studying knowledge management for at least 20 years.  He is a Professor at Babson College.

The article discusses two approaches to providing technology support to knowledge workers:

• the free-access approach in which organizations provide knowledge workers with a set of tools and let them choose which ones to use for different tasks.  These tools typically include the internet, internal KM and collaboration systems (e.g., SharePoint), and business intelligence systems.
• the structured approach provides knowledge workers with specific information to support a task or deliverable.  These tools include document management and workflow management or business process automation systems.

While the free access approach is great for worker autonomy it can lead to reduced productivity by increasing search costs and adding distractions to work.  The structured approach in contrast can improve productivity and also reduce autonomy and job satisfaction.

Davenport goes onto introduce a two by two matrix (a classic tool for management researchers) to help map the approach that us best suited for different types of work.  He breaks work out into individual versus collaborative and routine versus interpretive.  Consider a collaborative/routine task like approving a large purchase order.  You might want a structured workflow management system to support this task.  The key is making the process as efficient as possible so that purchases could be approved in a timely manner.  There's not a great need for free access to information to support this process.

As we help organizations apply knoweldge management and business intelligence systems to make their knowledge workers more productive, I'm sure I'll refer to this framework to both inform recommendations to our clients and to explain why we're suggesting a specific technology to solve a problem.

 

Communicating IT Value to the Business

George Westerman gave an excellent talk at last week's Boston SIM monthly meeting.  He spoke to the CIOs in the audience about how to communicate the value they provide to senior line management.  The information is expanded upon in the book he co-authored with Richard Hunter, "Real Business of IT: How CIOs Create and Communicate Value."  George is a Research Scientist at the Center for Information Systems Research (CISR) at the MIT Sloan School of Management.  His insights are based on extensive surveys and interviews of CIOs.

George's principal message was that CIOs must take control of the value conversation.  They shouldn't wait to be asked by line managers.  Their speech, both within and outside of the IT organization, should focus less on technology and more on how the technology improves business value--reduces cost or enhances revenue.

One tool that George displayed was a cascade chart that illustrated how the IT budget is both reducing company cost and increasing revenue.  I'm a big believer in using charts to tell a story.  KMA is the maker of Mekko Graphics, the best business charting software on the market (in my humble, but biased opinion).

Here is my interpretation of George's chart:

A CIO would use this chart to present a high level view of their upcoming IT budget to the CFO and the senior management team.  It highlights, in business terms, the impact of three key cost cutting initiatives, one required regulatory initiative, and three revenue enhancement initiatives.

To download a PowerPoint version of the chart, click here: Download ITBudgetCascade.  To edit the chart, you'll have to purchase a copy of Mekko Graphics. 

Some simple charts that are both well-thought out and well-presented can go a long way to improving the dialogue between IT management and the rest of your organization's senior leadership team.

 

Managing Virtual Teams

I heard Karen Sobel Lojeski, a Professor at SUNY Stony Brook, speak at the Babson College Center for Information Management Studies yesterday.  She introduced the concept of virtual distance and provided some good insights into how to manage virtual teams.  I blogged about virtual distance a couple of years ago (see How 'Close' is Your Team?)  Lojeski identified three factors that affect the distance among team members:

 

• Physical distance factors include how close the team members are located, how many time zones separate members, and how far apart the members are organizationally. 
• Operational distance factors measure team size, the degree to which the team works face-to-face, the degree to which team members multitask, and the types of collaboration tools and technical support available to team members.
• Affinity distance factors measure the degree to which team members share cultural values, feel interdependent, have other relationships (through other projects or socially), and are at the same level within the organization.

She noted that teams with relatively low virtual distance were:

Profesoor Lojeski then noted that three management practices help reduce virtual distance.  They are:

• Create context--help your team understand why they are doing what they're doing.  As we grow I find myself spending mor eof my time creating context for our consultants and managers.  The key for our team is understanding what work they should be performing for our clients.  We do this formally every week and reinforce it informally throughout the week.  I also report back on how we did against our expectations at the end of the week.  Finally, I relate the work we did to our revenue and profit targets.
• Cultivate community--on-line tools can help to create community.  We're big fans (no surprise) of the tools in SharePoint 2010 that let employees build My Sites, tag and rate documents, blog, wiki and micro-blog.  These need to be supplemented by in-person events.  At KMA, we do pot luck lunches, monthtly company meetings and informal Friday afternoon get togethers.
• Co-activate new leaders--as we grow, we need to train new leaders and teahc them how to create context and cultivate community.  We combine leading by example with leadership training.

To learn more about this research, you can visit Professor Lojeski's company's website: http://virtualdistance.com/default.aspx. 

• more likely to deliver a project on-time and on-budget
• more trusting
• more innovative
• had higher job satisfaction
• perceived that their leaders were more effective

Two Excellent Upcoming Boston SIM Talks

We have two excellent talks at the November and December Boston SIM monthly meetings.  Dr. George Westerman, Research Scientist, MIT Sloan School of Management, will speak on the evening of November 18th at the Waltham Westin on "The Real Business of IT: Taking Charge of the Value Conversation."  George wrote a book on the subject which was named the Best IT-Business Book of 2009 by CIO Insight magazine.  All attendees will receive a free copy of the book.  If you'd like to learn more about the talk and register, please visit the Boston SIM website: http://www.bostonsim.com/how-cios-create-and-communicate-value-11182010/.

On December 16th at the Legal Seafood Conference in South Boston, Dr. Andrew McAfee, Principal Research Scientist, MIT Center for Digital Business will speak on "Enterprise 2.0: The State of an Art"  Dr. McAfee is a former Harvard Business School professor who coined the phrase Enterprise 2.0.  Each attendee will receive a free copy of his book: "Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges." If you'd like to learn more about the talk and register, please visit the Boston SIM website: http://www.bostonsim.com/enterprise-2-0-new-collaborative-tools-for-your-organization%e2%80%99s-toughest-challenges-12162010/.

Observations from the Boston CIO Summit

There were some great speakers and interesting ideas at the CIO Summit. Here are some random observations:

Sometimes change comes slower than you expect. Nigel Travis, CEO at Dunkin Brands was President at Blockbuster. They experimented with video on demand in the early 90s and it didn't take off. They then were slow to respond to the Netflix challenge.

Have each of your IT employees make 10 friends outside of IT and within your organization. Stephen Laster, HBS CIO, is doing this as a way of connecting his IT organization to his user base.

The Dell CIO Robin Johnson emphasized how they are attacking legacy costs. For example, they reduced the number of applications that they support worldwide from 8000 to 2300 through a combination of turning some off and globalizing others. He also discussed how virtualization and cloud can reduce systems admin costs greatly. Dell then uses these savings to fund innovative new projects.

Mobile technology will lead to an 'abrupt societal shift enabled by converging technology.' specifically mobile devices and the cloud will enable us to move information among our devices as we move from work to car to home. Carl Abrams, an IBM researcher who focuses on future technology trends put forward this opinion in his talk on emerging technologies. I can't wait for my outlook to be able to communicate with my car's GPS and automatically set the directions to my next meeting.

Dr. Abrams also discussed how much smarter computers are getting as processing power is increasing. IBM has a supercomputer that can play Jeopardy and will be on TV sometime soon. There are some YouTube videos available that show it off. The computer has read books and stored information in its database. It then parses the question, figures out the probability that it knows the answer, if this probability is high enough it indicates this (possibly more quickly than its human competitors), and then delivers the answer. This type of problem is called open domain q&a and has some interesting applications in business. Maybe it can help in automating call center support.