Analytical Diaries

A lot of business cases we have prepared over the last few months seem to boil down to a very simple question – do we invest tactically or strategically. And the unspoken companion assumptions that go along with this decision are:

• Do we want a six month or an 18 month payback?
• How big is the overhead we are getting into?
• Can we be sure, that circumstances will remain the same that long?

While the question of strategy versus quick win seems to behold a very prominent spot in many investment decision boards, ready to carve out the plans for 2011 projects and initiatives, too often the wise decision should be an “and” instead of the “or”. Two use cases:

1) Change operational systems or use analytical feedback

When several formerly independent organizations converge and agree to form an integrated and consolidated business, often they strive to integrate their mission critical IT systems as well. When the decision is to agree on a joint and uniform operational process that involves changing of seven different applications a project duration of more than 18 months seems obvious. When the same results could be achieved a lot faster and cheaper by utilizing analytical systems (i.e. data warehouses) and feeding back the process results to the different operational platforms, it’s often the architects that show a worried face. Wouldn’t that create a vicious circle where the data quality is ever decreasing instead of increasing? Our clear experience and answer is “NO” – the tendency to increase data quality in analytical systems is empirically proven and by applying analytical tools and quality gates this improvement process can trickle down into the operational world. Putting up Master-Data-Management frameworks on top of data warehouses and linking the output back to ERP and CRM systems is just one worthwhile example.

2) Performance Management Consolidation

The tactical solution for a consolidated group-wide MIS would be a re-use of existing KPI and measure results from existing divisional MIS. While it is known, that these measures will never be aligned in terms of methodology and calculation, even the apples and pears combination offers higher decision making quality than no consolidation at all. Should therefor the methodology alignment be ignored for good? Certainly not – but even when the accounting genes in most of us scream “halt”, an iterative and evolutionary approach to align formerly distinct performance management frameworks is more promising than the big bang green field dream, that takes years and creates business impact only eventually. Be aware that most performance management initiatives are by far more change management and behavioral challenges than they are technology ones.

So next time you come across the question, whether tactical or strategic is the better move, try to opt for the lock-stepped approach: Infuse your tactical tasks with strategic meaning and your strategic tasks with tactical impact.

Ask how or why – let’s chat…