September is coming to a close, and so will the spate of back-to-school/child-oriented blog posts from me (I promise). Just...after my coming review of the Fuhu Nabi tablet. And - D'oh! - this post:

 

(Assumes whiny stand-up comedian voice) "Have you ever tried to get your kids to stop playing on your smartphone? What is UP with that? It's like their eyes...their pupils don't focus. They're always holding it super-close their face, because this is what Samsung commands them to do. And they always mumble sighed responses like "Yeeesss, Daaaaad" while they're Joyriding Jetpacks because that's wayyyyyy more interesting than anything you'll ever say to them."

 

 

(Apologies for the Seinfeld ripoffhomage)

 

As a geek dad who loves his gadgets, I hate having to constantly nag my kids to get off the iPhone/iPad/Wii/PC/3DS etc.

 

In my dreams, I would have an app that would allow me to set a daily time limit for ALL their devices, automatically locking them out after they hit their limit, or during certain times of the day (like bed time).

 

Essentially a Mobile Device Management (MDM) app for parents, this would also let me create a whitelist of kid-safe apps, prevent or control any downloads and generally track their usage.

 

(Speaking of MDM, let's take a quick commercial break to plug SAP Afaria, which was just ranked the leader of the MDM market for the 11th year in a row, according to IDC. Afaria's 16.4% share (by revenue) was more than twice its next closest competitor.)

 

Alas, I knew that a Parental Control App To Rule Them All was impossible. That's why so many parents are turning to childrens' tablets with built-in parental controls features (see my image gallery here).

 

How about something just for iOS? There's no shortage of MDM software for Apple; what about a parental control app?

 

The closest thing I could find was a $0.99 iOS app called TimeLock which, despite its name, doesn't actually lock your kids out from your iPad. It just beeps and buzzes annoyingly. Though knowing my kids, they will unfazedly keep ninja-slicing fruit through the buzzing until I storm over, redfaced and forehead throbbing.

 

That's what got me so interested when I heard about Kytephone. It's a newish, free app from three young Toronto developers. Kytephone already does many of the things I was looking for (albeit for Android):

 

- Manage what games and apps that kids are allowed to play, and set a daily time limit for them (see screenshot);

 

 

- Let you remotely track and manage your child's activity. For instance, if you see that your kid is playing Scribblenauts while he or she is at school, you can remotely turn off the device. You can also remotely track their location;

 

- Block pop-up screens that direct kids to download and buy apps and upgrades;

 

- Let parents create a whitelist of phone numbers from which their kids can receive texts or calls.

 

Little hackers won't be able to get around these restrictions, says Anooj Shah, one of the creators of Kytephone. For instance, holding down the on-off button or removing and replacing the battery typically causes an Android device to reboot and close all apps, including MDM. But a Kytephone-managed device will automatically resume the parentally-set 'Kid mode', he said.

 

"We have deep integration into Android," he said. "No one else has the full sandbox approach."

 

Coming features include:

 

- The ability to lock kids out during certain hours of the day;

 

- Let kids create an app wishlist while still blocking them from app stores;

 

- Enable parents to reward kids with more screen time if they finish chores or do well in school.

 

Most of the features will still be available in the free version, though Shah says they plan to release a premium (paid) version of Kytephone by the end of the year.

 

When I asked about creating a Kytephone for the iPhone, Shah confirmed what I feared: they had no plans today. Shah said iOS doesn't make it easy for developers to create separate parent and child modes, as Android allowed them to build.

 

I guess I'll have to keep dreaming of an Uber-App for Parental Controls. Or wait until my kids turn into 16. I think the latter may come first.

small272192_h_ergb_s_gl.jpgLast week over 160 senior financial executives from major companies like Coinstar, Sybase, American Water, and Dow got together to talk shop at the CFO Dimensions™ conference in Chicago. SAP co-sponsored the event which is the brainchild of Proformative, an online network of 600,000 corporate finance and business professionals. Members get together regularly to share ideas and best practices for success, and this is their premier annual networking event.

 

Some of these companies are using innovations that leave weekly reports, cumbersome spreadsheets, and the like far behind. Amazing things happen when you can review budgets and spending across the company in real-time wherever you are at any time on your mobile device. That’s the idea behind SAP RealSpend, a mobile app for the iPad. It gives financial professionals instant access to their SAP ERP software applications. They can receive alerts on spending issues and act fast with colleagues to resolve them.  They can analyze and benchmark spending data by department, project, or expense type over any time period.

 

This kind of real-time information has never mattered more to CFOs. Thack Brown, COO and Interim CFO, SAP Latin America and Caribbean, delivered a keynote at the Dimensions event in which he talked about how the role of the CFO has dramatically changed. He told the audience that success or failure hinges on how CFOs navigate risk, regulation and compliance in an uncertain economy—all the while helping to grow the company. Brown’s overarching point was deceptively simple; Modern CFOs need to stay updated on the latest technologies that have the power to change their business.

 

That’s precisely the idea behind bringing software applications into the cloud. One example is SAP Enterprise Performance Management OnDemand (EPM). Recently launched at the ASUG BusinessObjects User Conference, this set of mobile-ready EPM applications is built natively on the SAP HANA Application Cloud, and available via subscription pricing. It comes with three apps to start that allow CFOs to solve expense problems, do profit and loss reporting, and capital project planning. This is just one example of innovative solutions that give CFOs the ability to analyze, iterate and adapt on the fly, whether sitting in the office or on the road. Being a CFO has never been more complicated. It’s good to know solutions like these exist that make doing business not only better, but a lot easier too.

The McLaren Group, known for its Grand Prix racing team and iconic Formula 1 cars, announced earlier this year that it aims to use SAP’s portfolio of high-performance solutions to improve efficiency and expand their performance capability:

“SAP HANA will boost the speed and depth of Vodafone McLaren Mercedes’ telemetry technology, enabling us to look at much larger data sets and ask more complex questions; and SAP’s Rapid Deployment Solutions and mobile apps will empower everyone across the business with the real-time information they need to stay ahead.”

How McLaren Uses Real-Time Data To Increase Performance

 

CNN recently covered McLaren’s driver Lewis Hamilton explaining how they use the telemetry data acquired from a F1 car:

 

ScreenClip.png

 

McLaren’s CIO Stuart Birrell explained the benefits of HANA in more detail at a SAP Forum event in London earlier this year:

Birrell told audiences that data is fundamental to the racing team's success. "We generate gigabits of data every weekend off every car and analyse that in real-time to make decisions," said Birrell. "We monitor everything - the movement on the suspension strap, what's happening in the engine. There are probably 120 sensors in each Formula 1 car."

 

The information generated by the cars during a race is sent back to McLaren's on-site garage in real time and then back to the head office in Woking. He added: "Getting that information is critical. We probably run one thousand simulations a minute during a race, so by the end of the first or second lap we have a 90% probability of the outcome."

 

McLaren also uses the data to retrospectively analyse its cars' performance on specific tracks to help the driver understand how to best race the car. "Monaco's track hasn't changed for 30 years, so we can look at years' worth of data and see what happens to a suspension arm on certain corners and monitor that," said Birrell.

 

Birrell stated that the company's investment in data over the last 10 years had been "huge" and this is why it was now looking to SAP's HANA.  "We are working with SAP on the HANA platform to turbo charge our analysis. It needs that next generation," he said. "It needs stepping up a gear to get it to that last one percent. Many races are often won within seconds and finding that small percentage difference between us and Red Bull or Mercedes is absolutely fundamental."

Jonathan Neale, the Managing Director of the McLaren racing team gave more details of how the team approaches performance management at similar event a couple of years ago.  The green lines below show Hamilton’s curves compared to that of his team-mate Jensen Button. You can see that the two curves aren’t quite identical – for example, in most of the turns, you can see that Hamilton brakes a fraction of a second later than Button. By comparing the two driver’s performance, each of them can get detailed feedback on things they could be doing differently to improve their performance.

image

 

In addition to the engine sensors, video and GPS is used to work out the best line to take through each bend:

 

image image

 

Telemetry and Benchmarking in Your Business

Real-time “telemetry” data is now a real prospect for your organization, too. But just getting more data, faster, is pointless -- unless it’s being used to change business performance.  Just like McLaren, one way to do that is to make extensive use of benchmarking on every aspect of your business process, to try to uncover the areas where you can get an edge.

 

Here’s an example from a few years ago, when the UK criminal justice system used SAP BusinessObjects to produce “waterfall charts” showing the performance of different local Magistrates Courts.  The red bars show the cases that ideally would have been avoided, having been dealt with much earlier in the sentencing process – for example, when a guilty plea is lodged only very late in the proceedings, having wasted a lot of the court’s time and money. 

 

image

 

It turned out that different courts had very different profiles, even when adjusted for the local differences in demographics and other factors – in other words, the courts differed in which parts of the process they excelled at. And so, just like Hamilton and Button, the aim was to compare performance and try to bring each part of each court’s process up to that of the highest performer, making everybody better off.

 

What processes could you be benchmarking in your organization, using internal or external data? 

 

grand-prix-steering-wheel

Links

SAP TV’s coverage of McLaren

http://blog.sap-tv.com/2012/09/cnn-on-mclaren-f1-racing-team-using-sap/ McLaren and Performance in 2010

http://timoelliott.com/blog/2010/07/what-i-learned-about-bi-at-sap-world-tour-uk-2010.html Grand Prix Business Intelligence

http://timoelliott.com/blog/2009/08/grand-prix-business-intelligence.html Telemetry for The Rest of US?

Namibia_truck.jpgOn the second day of an otherwise fabulous vacation, I took a wrong turn. The much bigger problem than the mistake itself was that this wrong turn was straight off the only road running through a nameless arid expanse of the Namib Desert in Namibia. This was long before mobile devices and navigation systems were standard (do you really need navi in a country with 6 main roads?).

 

About 50 meters off the gravel road (pictured) that served as the region’s highway, our sturdy pickup truck sank soundly into the soft desert sand. Had we bothered to ask the car agency for a quick tutorial on the truck’s unique all-terrain features? Um, no. We just jumped in and started down the road on vacation, confident we’d figure all that out when we really needed it. My husband and I got out of the truck, quickly looked around for any animals that might try to eat us, and then had a very loud discussion of blame and counter-blame. It didn’t matter how loudly we argued; the Namib was a vast moonscape devoid of people, buildings – and water. It offered no mercy.

 

How did we get here?  We had booked our vacation through an agency in Germany that had a good reputation for planning tours in Namibia – complete with bed-and-breakfast bookings, day tours, language services, and a very reliable map (after all, only 6 roads, right; what could go wrong?). The agency was well rooted in the region and routinely vetted all of its recommendations and routes. The problem was we detoured from the main road to take a shortcut through a creek bed that was recommended in our backpacker’s guidebook. This was supposed to save us all sorts of time. It was dumb to listen to the advice of a few adventuresome trekkers talking it up in a guidebook instead of sticking to our agency’s map. More to the point, does anyone really know what a creek bed in the desert looks like? Pretty much like every other pile of rock and dust. We made the turn where we did only because the road dipped and we thought a creek bed should run through a dip in the earth, right?  

 

Now as I stood next to the road, I contemplated one thing: my basic survival. I decided that’s all I wanted out of the situation. In the hour that we stood there under the African midday sun two cars passed by us, looking at us with puzzlement as they drove on. Finally, we were picked up by Wesley and Adele, a gregarious retired couple from Durban who were on tour. They took us to the nearest village, which was 26 miles away. From there, two local men drove us back to our marooned truck and assessed the situation (“Really? You got this [truck] stuck? How did you do this?” one asked in sincere bewilderment as he stroked his chin). Then, with a quick adjustment of the external locks on the wheels, they were able to drive the truck out of the sand and back onto the road. The world was right again, thanks to the kindness of strangers. We took the men back to their homes and were on our way again.

 

About a half mile down the road from where we got stuck we spotted the real creek bed. Forget that, we said. This time we were sticking to the main road. We arrived at our inn many hours late into the night. The innkeeper, a local of German descent, told us he was just getting ready to go out looking for us. He had a pretty good idea of where we might be; two Dutch tourists had just made the same mistake the week before. Contemplatively, he said, “I’d thought about putting a sign out at that spot.”

 

Sometimes the sound guidance of someone who knows the local trails can save you a lot of unnecessary trouble. SAP puts its own signpost in the road with a new partner program – helping you to avoid getting stuck on the road less traveled. Read about it in SAP.info: SAP Partners Bring in Leads.

 

I took two lessons from my experience: Always lock your wheels in the Namib and follow the guide you trust. 

Here on the Business Innovation site, we deliver the top blogs, news and featured content on business innovation for professionals looking to grow and gain a competitive advantage. We cover hot topics and thought leadership on mobile applications, cloud computing, big data, real-time analytics and the top challenges facing executives and leaders in sales & marketing, finance, human resources and much, much more.

 

Each week, we curate and publish the top 10 posts of the week on business innovation from across our content categories. We hope you find these articles valuable, informative, and interesting. Enjoy!

 

What IT Professionals Think About Big Data [Survey]

By Michael Brenner, @BrennerMichael

In case you haven’t already heard from us, big data is big news. Michael Brenner looks at the results from the 2012 Big Data Survey and writes on some key findings.

 

BI Meet Big Data, I Think You’re Going To Be Friends

By Lindsey Nelson, @LindseyNNelson

Each minute, there are 1,500 blogs, 98,000 tweets, and 168 million emails sent. Don’t be intimidated though, all this data presents a huge opportunity to businesses. Your’s truly reflects how!

 

Collaboration Using the Cloud

By Jen Cohen, @jenz036

The cloud can foster effective collaboration for employee teams and bridge the gap between on and off-site workers. Jen presents some of the most useful capabilities of collaborating with the cloud.

 

4 Things A Dinosaur Taught Me About Mobile Apps

By Milja Gillespie, @miljagillespie

The future of mobile is limitless, even when it’s focused on the past. And after an educational, but fun, trip to the Royal Ontario Museum, Milja reflects on some observations on mobile user experiences.

 

New York’s Policing Strategy Highlights Big Data Problems

By Ina Felsheim, @InaSAP

Think “Minorty Report”, where Tom Cruise’s department of crime arrests people before they even commit their crime. NYC is now one of the next cities who is at least trying to repeat this process, but they better make sure they factor in these key requirements.

 

Can Virtualization and Consolidation Efforts Really Deliver?

By Lindsey Nelson

If you’re looking to downsize your systems onto a few servers, make sure you check out these four tips for making the move.

 

Lookout: 8 Signs of Dysfunctional Management

By Daniel Newman, @danielnewmanuv

There may be no faster death of a great idea or business than a dysfunctional management team. But do you know the signs to watch for?

 

Ch-Ch-Ch-Ch-Changes – Are You Ready For The Screenagers?

By Jamie Anderson

Jamie reflects on the ch-ch-ch-changes of the generations through the observations of his kids, or as he notes his soon to be “screenagers”.

 

CIOs & CEOs Not On the Same Page When It Comes To Tech Investment

By Dror Orbach, @drororbach

Would you be surprised if you knew that most C-level executives are struggling with the in’s out out’s of where and how to go about investing in new technology to grow and change their business?

 

3 Ways High-Performance Computing Has Evolved Because Of The Cloud

From MakeUseOf.com

High performance computing is one of those areas that people are skeptical of when it comes to migrating services to the cloud. This post looks at the 3 ways cloud is evolving in the high performance area.

For the past year I have been commuting to the Palo Alto office from Monterey, a distance of 90 miles. Part of the journey is completed by train from Gilroy to Palo Alto on Caltrain, a Bay Area commuter rail line. During the first six months I tended to gaze out at scenery in the distance and be taken by the beauty of the golden foothills decked by stately oak trees.

 

But lately my attention has been focused on the untidy region near the tracks, where there is much evidence of vigorous, edge-of society activity, and a lot of wisdom to be gained by watching with an analytical eye.

 

Sometimes the beautiful is not nearly as instructive as the ugly. And likewise, the grungy world of rail lines reveals some worthwhile wisdom about analytics.

 

 

Like desperados waiting for a train?

 

One of the few areas in the US where the unemployment rate has been falling in 2012 is Silicon Valley and the Bay Area in general. Yet as Bay Area employment picks up there has also been a curious increase of homeless persons camping regularly at the Gilroy station.

 

Surprise! They are not unemployed; they are the working poor. Broadly reduced unemployment cuts across all income levels, and in the Bay Area subminimum wage jobs and well-paid skilled tech sector jobs have been increasing simultaneously.

 

Inhabiting the Gilroy station also facilitates labor force participation. The station is a regional transit center served by local buses, Greyhound, and even charters to Mexico, enabling station inhabitants to be mobile. Inhabitants can head to another town to find employment on a moment’s notice. At the railway station they can be easily fetched for day labor, and they can develop a symbiotic relationship with taxi drivers, who may offer local transport or information in exchange for tasks. The station also is patrolled regularly by the local police and Amtrak employees, and is therefore safer than most other areas where they could camp.

 

Lesson: Don’t uncritically accept two observations appearing together as fact, or as evidence that one relates to the other in a meaningful way. Let the data tell you what the relationships are.

 

Things get even more interesting as the train leaves the countryside and approaches San Jose. Find out how by reading the full text version on Forbes.com

Possibly because my mantra is ‘words matter’, I frequently get asked for tips on better writing. For years, I quoted George Orwell who provided great advice on how to be simple and clear, including my favorite:

If it is possible to cut a word out, always cut it out.

In the spirit of great writing advice from famous authors, here are more of my favorite quotes:

“If writing seems hard, it’s because it is hard. It’s one of the hardest things people do.”
William Zinsser

“If you want to be a writer, you must do two things above all others: read a lot and write a lot.”
Stephen King

“Substitute ‘damn’ every time you’re inclined to write ‘very;’ your editor will delete it and the writing will be just as it should be.”
Mark Twain

“Don’t tell me the moon is shining; show me the glint of light on broken glass.”
Anton Chekhov

“Every sentence must do one of two things – reveal character or advance the action.” (9 more)
Kurt Vonnegut

“I’m always pretending that I’m sitting across from somebody.  I’m telling them a story, and I don’t want them to get up until it’s finished.”
James Patterson

“Writing a novel is like driving a car at night.  You can only see as far as your headlights, but you can make the whole trip that way.”
E. L. Doctorow

“Easy reading is damn hard writing.”
Nathaniel Hawthorne

Of course, if none of the above helps, there’s always this advice from Ernest Hemingway:

Write drunk, edit sober.

While it may not improve your writing, it’s probably more fun.

 

This blog was originally posted on Manage By Walking Around.

 

Follow me on twitter @jbecher.

Stricter risk controls are necessary at all levels of the high-frequency trading cycle, according to the Federal Reserve Bank of Chicago this week. HFT firms aren’t employing risk controls endorsed by industry and regulatory bodies, the bank’s study found, and algorithms run amok more often than expected.

 

Trading Perfection 09-21-12-AKill switches that terminate trading at certain levels, as well as limits on order quantities within a certain period were among the risk controls endorsed in Chicago, as were restrictions on how much money one could lose.

 

Meanwhile lawmakers across the Atlantic want to set a speed limit on HFT by requiring participants to hold positions for at least half a second, according to a position paper on which the European Parliament’s economics committee is set to vote on Wednesday. Such a mandate would doubtlessly blunt electronic traders’ capacity to rapidly exploit unexpected market volatility, but using compliant algorithms could also help provide liquidity, inhibit added volatility and avert another 2010-style Flash Crash.

 

All of this amounts to perfect technological solutions for HFT skeptics. There’s just one problem:

 

“When it comes to building software,” Joshua Walsky noted last week, “perfection is not possible.”

 

Parts of the Problem

 

Accepting that there can be no reasonable expectation of perfection frees us to decide how to move forward, according to Walsky, CTO of New York-based financial solutions provider Broadway Technology. Moving forward would include treating HFT as system risk, as he said in his op-ed in The Wall Street Journal last month.

 

“System risk is the possibility of financial loss or gain resulting from systems performing in an unexpected way,” Walsky said. The idea is that people will be responsible for managing system risk, armed with tools, methods and mechanisms.

 

But people have also been part of the problem. A former CME Group software engineer could spend as much as 10 years in prison and $500,000 in fines for downloading thousands of CME source code files from the electronic trading platform’s operating system, all while planning to help a chemical electronic trading bourse in China.

 

To solve more conventional problems, the British Financial Services Authority recently announced it would use Nasdaq OMX Group technology to try curbing market abuse among high-speed traders. And the U.S. Security and Exchange Commission contracted with Red Bank, N.J.-based HFT firm Tradeworx earlier this year to monitor the markets.

 

Trading Perfection 09-21-12-BTraditional trading firms aren’t just watching HFT firms, they’re adapting to them, according to new U.S. trading data. Trading before their low-latency counterparts during closing auctions helps the less-frequent traders avoid the trap of final-millisecond trades, when high-frequency trading firms lock down closing prices.

 

Others call for banning HFT, as ECB Governing Council member and Austrian National Bank chief Ewald Nowotny did during a panel discussion at a regulatory conference last week.

 

What’s the Frequency, Kenneth?

 

Of course, an all-out prohibition of HFT would be tough to enforce internationally, as every nation would have to prosecute the ban with equal gusto.

 

A more reasonable solution would be to eschew continuous trading in favor of a universal frequency, according to Chris Sparrow on TABB Group. Instead of getting every region or nation to dial in, it would only require harmony amongst the trading venues.

 

“Establishing a standard frequency of trading would put an end to the technology arms race by removing the marginal benefits of squeezing an extra microsecond of latency out of the process,” Sparrow said. “If the frequency were 1 Hz (i.e., trade matching occurred at one-second intervals) then participants would be able to use equipment that could process orders within this time window.”

 

Sparrow predicts such synchronization would:

  • Remove the opportunity for latency arb
  • Contain the market data explosion and quote stuffing
  • Reducing systemic risk
  • Increasing confidence of investors
  • Level the trading field

 

But exchanges, firms and regulators would all have to get onboard, which isn’t likely to happen any time soon. Just look at how long it’s taken legal entity identifiers (LEIs) to get off the ground.

 

Supporting Big Data

 

For now, the market is moving toward HFT or co-location as more of the norm, according to SAP’s Stuart Grant, who presented at last week’s “HFT Under Attack: Using Big Data to Find New Trading Correlations and Opportunities” webcast.

 

Trading Perfection 09-21-12-CGrant stressed the significance of a technology strategy that supports vast data volume because it is increasingly important that firms never discard anything. Big Data requires both static storage and streaming technology capabilities.

 

“Even if volumes move toward dark pools, the strategies are still relevant as they allow you to improve your analysis of the market,” Grant told me after the webcast. “Traditional technologies won’t get you there.”

 

Picture Perfect

 

Perfect is in the eye of the beholder. Different ideas of basic matters, such as how people should make money and where the market is going, make perfection all the more elusive.

 

Related Articles:

 

Chicago Fed calls for better risk controls on high-speed trading” from Reuters

 

Ultra-fast trades should be slower, say EU lawmakers” from Reuters

 

HFT Under Attack: Using Big Data to Find New Trading Correlations and Opportunities” from SAP, Wall Street & Technology and UBM TechWeb

I know this will be an unpopular point of view but I’ve come to the conclusion that brainstorming is a bad idea that doesn’t work.

 

Brainstorming advocates claim groups of people are more likely to find solutions to problems than individuals working alone. The idea was popularized in the 1950’s by advertising executive Alex F. Osborn who was frustrated by his employees’ inability to develop creative ideas for ad campaigns. According to his book Applied Imagination, Osborn increased overall group creativity by encouraging the rapid generation of ideas and reducing the creative inhibitions among members.  His brainstorming mantra was “reach for quantity and defer judgment.”

 

In the name of brainstorming, participants are asked to generate as many ideas as possible, favoring sheer volume over specific solutions. Participants ignore traditional constraints (such as budget or feasibility) and look for unusual approaches or perspectives. The claim is this approach improves the odds of producing a radical and effective solution.

 

Over my career, I’ve seen little evidence which supports this claim. Group brainstorming sessions might produce a higher volume of ideas than a single person would but groups don’t produce higher quality ideas. A small number of people often dominate the conversation and group think almost always happens as a result of peer pressure. In my experience, the most creative ideas have come from individuals working alone.

 

It turns out my (somewhat irrational) bias is confirmed by science. More than a dozen research studies show that individuals perform better than groups in both quality and quantity, and the performance of brainstorming groups gets worse as size increases. As organizational psychologist Adrian Furnham quipped:

 

"…business people must be insane to use brainstorming groups. If you have talented and motivated people, they should be encouraged to work alone."

 

The failure of brainstorming doesn’t mean that group collaboration can’t work.  In the last few years SAP has had tremendous success with design thinking to spur practical creativity for solutions. Design thinking explicitly balances desirability (what people want), technical feasibility, and economic viability. Unlike other approaches, design thinking starts with what is supposed to be achieved (the goal) rather than what needs to be changed (the problem).

 

This solution-based approach appeals to me because it mirrors my performance management philosophy. Traditional brainstorming encourages a higher volume of ideas which improves activity-focused ego metrics. Design thinking focuses on the outcome we are trying to achieve: a solution people want that can be implemented in a cost-effective manner.

 

Now, that’s using your brain.

 

It’s also a non-brainer to follow me on twitter @jbecher

 

This blog was originally posted on Manage By Walking Around.

Jonathan Becher

The Myth Of Fair Value

Posted by Jonathan Becher Sep 20, 2012

To prepare for the upcoming holiday shopping season, I’m reading ‘Priceless: The Myth of Fair Value (and How to Take Advantage of It)‘ by William Poundstone. Poundstone references a wide variety of psychologies studies that show consumers are unable to accurately estimate fair prices and are “strongly influenced by the unconscious, irrational, and politically incorrect.”  In fact he makes the enticing claim that prices are a collective hallucination.

 

One of my favorite stories describes what happened when Williams-Sonoma added a $429 premium breadmaker on the shelves next to their normal $279 model. While they sold very few of the premium model, sales of the $279 breadmaker more than doubled. In post-purchase surveys, shoppers reported the lower-priced model seemed like a bargain.

 

Poundstone also explains why nearly 2/3 of all retail prices end in the number 9 and why the profit margin of the 99 Cents Only store is twice as high as Wal-Mart.

 

Here’s a video of him discussing the phenomenon:

 

 

The field of decision theory tries to explain these examples of people making seemingly illogical buying decisions. As Poundstone himself says:  "although humans spend in numbered dollars, we make decisions based on clues and half-thinking that amount to innumeracy."  If you’re interested in learning more, Poundstone occasionally blogs here; most recently about a $69 hotdog.  As for me, I feel better prepared to resist those holiday shopping bargains.

 

This blog was originally posted on Manage By Walking Around.

 

Follow me on twitter @jbecher.

The English word upset has multiple definitions.  The most common implies an anxious uneasiness; as in “I am too upset to say anything.”  This emotional version also has a physical equivalent; “My stomach is too upset to eat anything.”  Watching sports on a lazy Saturday, I’m reminded of another common usage. In sports and in politics, an upset is to defeat a seemingly better opponent. My own favorite upset occurred in college basketball in 1991 when Duke defeated the heavily-favored and previously-undefeated UNLV in the Final Four.  Sports fans know this use of the word upset comes from an infamous 1919 horse race that Man o’ War lost to an unknown named Upset. Considered the greatest horse of all time, Man o’ War beat Upset the other five times they raced. In fact, this is the only race Man o’ War lost during his entire career. That’s an upset and a perfect reason to coin a new term.  It’s a fantastic story but, like many stories that seem too good to be true, this one is horsesh baloney. According to the LA Times, Man o’ War did lose to Upset that day but due to human error, rather than poor performance. A substitute starter had difficulty getting the horses lined up at the starting tape such that, when the race began, Man o’ War was backing up and “was almost left at the post.” Despite starting later than the other horses,

"to the astonishment of the crowd, Man o’ War was so fast that the horse nearly caught up to Upset and clearly would have overtaken the lead horse if the course was twenty or so feet longer."

While this explanation ruins the emotion of the story, it doesn’t debunk the legend. According to the book Word Myths: Debunking Linguistic Urban Legends, New York University researcher George Thompson found the following in the July 1877 edition of the New York Times:

"The programme for to-day at Monmouth Park indicates a victory for the favorite in each of the four events, but racing is so uncertain that there may be a startling upset."

The Man o’ War race might have popularized the use of the word upset in sports but the article, published 40 years before the race happened, is incontrovertible proof it didn’t start there. Truth be told, I’m a little upset the legend isn’t true.

 

Follow me on twitter @jbecher. 

 

This blog was originally posted on Manage By Walking Around.

272454_l_srgb_s_gl.jpgWho would have guessed that the human tongue would become an internet sensation?

The marketers at Orabrush had a clue. They make a strange device designed to clean your tongue. The weirdness of the concept, combined with the untapped urge people seem to have to stick their tongues out for the camera, has led to more than 100 homemade videos with over 40 million views on YouTube.

More important, it led Orabrush on a wild ride from an unknown, garage-based business to a supplier of retailing giant Walmart.

 

Businesses Grow Up Faster Now

The internet and an increasingly global value chain bring new speed and force to a moment of truth that every successful small business faces at some point: The need to start acting like a big business.

The signs of an inflection point can come suddenly—once the order from Walmart arrived, Orabrush had to very quickly figure out how to manufacture and distribute its tongue-cleaning utensil to 3,500 stores. Or, the inflection point is a gradual realization—for example, your management staff feels increasingly stretched, not just in workload but in skills. Yet regardless of the catalyst, growth eventually forces management to accept that the next phase of their business cycle will be very different than the previous phases.

 

Plan, Don't React

One of SAP’s resident small business experts, Mark Lehew, says that this inflection point should not be dealt with in the way most businesses do it—in an ad hoc, reactive fashion. That’s a ticket to joining the losing half of all startups that fail within the first five years. The reaction can and should be more systematic. Mark is working with me and expert journalist Rob O’Regan, as well as experts from outside SAP, to develop a guide for small businesses to navigate this exhilarating but treacherous period in their development.

Mark and other experts we’ve talked to have identified four warning signs that small businesses should not ignore:

  • Structural cracks. Many businesses cruise right past the 20-30 employee count or the $5-10 million revenue sign posts without slowing down to consider whether the structure of the business should change from when it was a startup. It’s around this point that you need to “build a real organizational structure,” says Karl Stark, managing director of Avondale Strategic Partners, a firm that advises high-growth business clients.
  • The manna from heaven order. Walmart’s Orabrush order was a surprise, but it doesn’t always have to be that way. Sometimes you may fight for years for the big order, in which case, winning the deal becomes the focus rather than building the processes, systems, and infrastructure necessary to fulfill it.
  • Big in Japan. Who knew that a foreign market would suddenly become wild about your widget? You need to be prepared to think about new distribution models and supply chain implications, among other things.
  • The capital well runs dry. Perhaps you’ve heeded the warning signs and are planning to open a new factory or warehouse. Receivables and the bank account won’t be enough. It’s time for more sophisticated financial management and a plan for securing new levels of funding.

 

Create a Planning Process

The consistent thread in all of these warning signs is that they all require a planning process. As the business succeeds, someone must always be thinking about when and how it will get big. Otherwise, you risk chaos.

“The worst thing any executive team can do is try to grow faster than they can handle,” says Bill Ballou, former CFO of Bob’s Discount Furniture, a regional chain of 43 retail furniture stores across the Northeast and Mid-Atlantic U.S. “You have to understand the critical points that could be problematic downstream.” These potential challenges involve everything from staffing to systems capabilities to warehouse capacity. “You have to make sure you have the lead time required to address any one of these issues so that you can satisfy the growth requirements when you get there,” adds Ballou.

 

Prioritization is Key

Part of the planning process should be prioritizing the next moves. In the case of a sudden big order for example, leadership teams need to identify the areas that most urgently need additional resources—such as manufacturing capacity.

In this case, Mark tells us, “It’s rare that you are totally prepared when the growth hits. You find there are lots of leaks in the boat that need plugging fast. You need to attack the biggest roadblocks to meeting the customer needs first. Then you can start working your way down the list.”

What warning signs have you experienced in your small business? How have you dealt with them?

reformdrivenl.jpgThe first step to recovery begins with admitting you have a problem. I can’t remember the first time I used the word “driven” as a hyphenated suffix. It began with good intentions. As a freelance reporter and marketing communications writer, I wanted to tell a good story. That was then, and this is now. So not long ago, I took a deep breath and entered “drive” and “-driven” into the search bar of my PC. I won’t reveal the final number, but let’s just say it’s prompted me to take action. This post is only the beginning.

 

Let’s start with a few facts. Driven is an adjective, the past participle of drive. Dictionary sources offer this definition:

 

 

  1. Having a compulsive or urgent quality
  2. Propelled or motivated by something (used in combination <results-driven>)

 

According to Merriam-Webster, driven was first used in 1925, possibly linked to the widespread adoption of cars (my guess). The motivational definition sent me to Wikipedia where drive is connected to desire. Here I learned that philosophers like Hobbes believe human desire is the fundamental motivation for all human action.

 

It’s no wonder driven has become shorthand for all manner of so-called communication, business or otherwise. Recently I did a quick online search to see just how far this has gone. Millions of hits prove the situation is dire. Forget data-driven decisions and rage-driven mobs. It’s much worse than that. Restaurants serve ingredient-driven dishes. Ted talks push child-driven education. Romney-driven attention reared its head at the 2012 Summer Olympics.  We have drought-driven farmers, fear-driven financiers, patient-driven clinical research, and celebrity-driven everything. If you’re interested a building a new [blank]--driven life, your choices are endless: you can be driven by Crossfit, Disney, food, or an obsession with comic books.

 

The trouble with all this shorthand is just that. Minus the full context we miss the nuances. Our business and personal lives are so richly textured that they defy interpretation by ‘drive speak.’ This is not about the internet, either. If anything, the online world demands more clarity, not less, as we race to meaningfully connect with as many people as we can.

 

So the next time you write an email, slide deck, white paper or blog, and the d, r, i, v, e, n keys on your keyboard beckon—resist the urge. Think about what you’re really trying to say. Type that instead. Every one of us who creates content has an obligation to communicate better. Let’s eradicate business jargon like driven, and replace it with words that say exactly what we mean. Please join me. We can do this, one writer at a time. You have nothing to lose but your obfuscation.

“Would you like 500 calories, er, fries with that?”

 

McDonald's Lesson in Transparency 09-14-12-AGlobal fast food juggernaut McDonald’s will list the calorie values on its menus across the U.S. next week, giving customers the chance to evaluate their choices. The parallel between this fast food initiative and the financial services industry may seem unclear, but I’ll try to make it more transparent.

 

That’s it, actually. Transparency.

 

Transparency is a virtue valuable not only to fast food, but finance as well. What party doesn’t want to see its counterparty’s kitchen?

 

“This would allow ‘special groups’ to aggregate, review, judge and summarize the real quality of products and institutions relative to specific consumer profiles,” wrote one commenter on an SAP Banking View discussion I started about my previous blog post. “We need to create a situation where consumers are on equal footing with financial institutions.”

 

It’s got me thinking a lot about transparency. Market participants appear to be ready for regulations mandating more open grills, rather than regulations tell them how to flip their burgers.

 

Regulators aren’t telling McDonald’s how to make their food.

 

McDonald's Lesson in Transparency 09-14-12-BTransparency in finance seems to be gaining a lot of traction, anecdotally at least. I’ve heard about it in conversations, as well as the last two webcasts I’ve attended in as many days.

 

“[McDonald’s] push is part of an effort to get out ahead of federal menu-labeling requirements,” according to The Wall Street Journal Thursday. “There is a market need to it too -- McDonald’s want to convey to customers that it’s not just selling junk food.”

 

Transparency doesn’t require McDonald’s to reveal its Secret Sauce recipe, or any electronic trading firm to disclose its beefiest algorithm. But more information in everyone’s hands will help the best products succeed.

 

Related Articles:

 

Highest-Calorie Menu Item at McDonald’s? Not a Burger” by Julie Jargon and Bill Tomson

 

Restoring Profits and Confidence with Big Data” by Derek Klobucher

 

Banking View” by Michael Mischker

smallira_simon.jpgPartnering with SAP hasn’t always been easy, admits Ira Simon, vice president of Global To-Partner Marketing/Communications. He explains how the SAP Partner-Edge Website is helping the company better serve its partners.

 

People may be surprised to learn that SAP generated thirty-three percent of its revenue from partners last quarter, and intends to reach forty percent by 2015. I recently spoke with Ira Simon on behalf of SAP.info. Here's my interview in which he explains how SAP has doubled down efforts to help partners make more money faster from innovations like mobile, cloud, and in-memory computing

 

  1. SAP.info: What excites you about SAP’s partner program today?

 

Ira Simon: When I was hired eight years ago to help develop our small and mid-size partner program, SAP was a different company. We were ERP-focused, and just beginning to explore the revenue possibilities of a multi-route business. Today, we have a worldwide network of close to 12,000 partners who help take SAP to market to reach customers of all sizes, co-innovate with us, and provide services and sales across every solution area.

 

 

  1. SAP.info: SAP just posted its best ever second quarter earnings. Where do partners fit into the growth strategy?

 

Ira Simon: Partners are crucial to help meet our aggressive business goals. Over sixty percent of our customer base comes from partners. Partners sell and service 98,000 of our small and mid-size customers. 

 

 

  1. SAP.info: Partnering with SAP hasn’t always been easy. What do you say to partners hesitant about working with SAP?

 

Ira Simon: Like any large company we’ve had our growing pains. But we’ve worked with our partners to identify and address issues.  We’ve made dramatic improvements, and partners are making serious money with us. We have a world class infrastructure in place with our partner service delivery team. We have hundreds of people in hubs worldwide whose sole job is to support partner business. We have dedicated partner account managers, sales and marketing tools, and partner enablement e-learning and education.

 

  1. SAP.info: What is your team doing to change the partner experience?

 

Ira Simon: We’re transparent and open. We listen to partners, prioritizing what we need to work on accordingly. We recently launched sappartneredge.com, a new partner only website, which consolidates in one secure, dedicated site all the resources partners need to build, sell, and implement all SAP solutions.

 

 

  1. SAP.info: How does sappartneredge.com work?

 

Ira Simon:  Already 60,000 unique people use the site over 100,000 times each month. This single portal provides information our partners need. This includes industry and market insights, competitive information, and SAP product and solution resources, along with operational activities including software license keys and ordering. They can get real-time status on partner program levels and training and certification. For new partners, the site hand holds them through on boarding so they are productive quickly.

 

  1. SAP.info: Thousands of new websites are launched every day. How will you know this one’s a winner?

 

Ira Simon: Our Partner Advisory Councils aren’t shy—they’ll tell us what they want and need. We track site traffic, and use formal and informal surveys to see what resources are being used and most valuable. We’re constantly refining, always looking for best practices outside of SAP.

 

 

  1. SAP.info: SAP leadership talks about your commitment to partners. What about the rank and file within SAP; has this required serious adjustments?

 

Ira Simon: More employees are experiencing how partners help them achieve their KPIs, sales targets, and project objectives. Programs like Extended Enterprise Sales bring partners and direct sales AEs together to close business we couldn’t close alone. Inside sales collaborates with VARS on new business. System integrators work closely with direct sales worldwide to identify opportunities and provide services to supplement license sales. Development collaborates with partners to develop and expand SAP solutions.

 

 

  1. SAP.info: Some question SAP’s co-innovation results. Can you prove SAP’s co-innovation commitment is real and not just a marketing message?

 

Ira Simon: Without partners, we couldn’t have brought SAP HANA, our in-memory computing solution, to market as one of the fastest growing products ever introduced. Partners played a key role in development and providing the hardware platform. Partners use Afaria and the Sybase Unwired Platform to develop and manage mobile apps. Partners are taking Business One on-premise and co-innovating to create cloud solutions. Thousands of partners take our core solutions like Business-All-in-One, and develop add-on functionality for micro-verticals, becoming industry leaders in the process.

 

 

  1. SAP.info: What new trends will impact SAP’s partner program?

 

Ira Simon: First, partners have to understand where mobile, cloud, and in-memory play into their business—it’s what customers want. That’s why we make it easier than ever for partners to expand into new solution areas. Second, SAP technology is increasingly being embedded into OEM products. Third, we’re adopting a two-tier distribution model as we move to higher volume sales from our evolving portfolio including database, ASE, mobile and analytics solutions. This allows thousands and thousands of partners to access SAP solutions through distributors and resell more products faster.

###

data2.jpgI read a blog by Thomas Redman in the Harvard Business Review (Make the Case for Better Quality Data) that stated, “It costs ten times as much to complete a unit of simple work when the data are flawed in any way as it does when they’re perfect.” I’ve had many discussions with colleagues about whether executives care about data quality or not. The summary of those discussions are that executives do care about data quality but don’t always appreciate and recognize the costs of obtaining quality data and the cost of not ensuring quality data.

 

The consensus is that generalizations about costs aren’t enough to get executive interest and buy in. A classic example is the use of spreadsheets and the following justifications for data quality.

  • The cost of errors – spreadsheets are notoriously error-prone and even if the errors don’t result in a need to restate earnings, they often result in poor decisions that negatively impact revenue, profitability and the ability to compete.
  • Opportunity costs – often more time is spent trying to compile data, validate the accuracy, and reconcile inconsistencies than analyzing the business, which reduces productivity and responsiveness to changing business conditions.
  • Maintenance and audit costs – as businesses grow the number and complexity of spreadsheets increases usually with minimal or no documentation, which results in a significant amount of time and money being, spent reviewing and validating formulas, macros, links between workbooks and data security.

 

 

The cost of errors is a potential risk, but executives are usually not given any tangible or quantifiable evidence. Is poor data leading to a misrepresentation of earnings? If so by how much? What’s the scope of the issue?

 

Similarly with opportunity costs without a direct link to business objectives and outcomes there is no real connection for executives. Is poor data impacting the closing of deals? If so what impact will that have on revenue and profit?

 

And unless you can quantify maintenance and audit costs they are just a cost of doing business and issues for departmental and/or IT groups to address with the budget allocated to them. How many man hours are spent validating the source and validity of data in reports? What is the labor cost per hour related to these efforts? How could executive level objectives be impacted by reallocation of the resources spent on validating data?

 

Redman uses the example of customer billing to develop a business case that helps data quality make the cut among competing priorities. This started me thinking about other use cases to show executives quantifiable business impact. A few possibilities include;

  • Sending multiple mailings to a given customer/household – It should be possible to calculate costs based on the total number of mailings per year, the estimated percentage of duplicate records, and the average cost per mailing.
  • Inability for sales to follow up on leads – It should be possible to calculate costs based on the number leads generated per a given time frame, the percentage of leads not followed up on because of missing contact information, lead to close ratio, and average selling price.
  • Not complying with legal hold regulations – There are a variety of country and industry specific regulations about retention periods for different categories of information. Since fines are usually documented for infractions, and legal fees for representation can be estimated it should be possible to calculate costs.

 

 

I would love to hear your opinions. Do you think executives care about data quality? Do you think the use cases I outlined above would get executive attention and buy in? What other use cases would you suggest? There are certainly more opportunities to estimate costs around analytics or business intelligence, operational inefficiencies, and data lifecycle compliance. In fact, free cost calculators or a free information management benchmark assessment could help you see how much data quality impacts your bottom line.

mobileblogl.jpgMobile business is today’s hot trend, and mobile apps are the whitest, hottest part of it.  Companies of all sizes in every industry are scrambling to keep up with employees who bring new, cool devices to work. The search is unending for killer apps to beat the competition—there are over 700,000 active apps in the iTunes App Store.

 

I get it. Apps are sexy. Long term strategy is not. But now is the time to move out of reactive chaos in favor of a more strategic approach to mobile. So the next time you’re in a meeting to talk about mobilization and someone starts rhapsodizing about this or that app, consider answering these four questions first:

 

  1. What’s our corporate vision?
  2. How do we expect mobile to help us get there?
  3. What mobile components do we have in place already—from front end apps all the way to back-end infrastructure?
  4. In prioritized order, what mobile technologies do we need to achieve our vision?

 

Taking a long term view that puts everything into context may be anathema to those who insist on limiting the human experience to 140 characters or less. However, mobile success requires something infinitely more thoughtful. While the immediate is always important, it’s the long view that stokes lasting success.

 

SAP celebrates its 40th anniversary this year, an eternity in the technology world. IBM has already reached its 100-year milestone. Neither got where they are today by parsing reactive flavor-of-the-month sound bites. Today’s mobile frenzy reminds me of when high technology first entered everyday office life. We leaped head first into every new server, programming tool, and word processor. Then we struggled to extract some kind of value from the subsequent tangle of disconnected, incompatible technologies.

 

The lesson here for mobile is to lead with the strategy, not the tactics. It’s easy to get distracted in an always-on world, and often with good reason. By all means, explore the latest apps but use company goals to guide selection of the best ones. In the end, staying power comes to those companies that deliver what sizzles today while planning for an even better future. Let’s hear it for longevity.

retailer1.jpg"What can be digitized, will be digitized"

                                         - Unknown

 

All of us know and realize the online retail business is growing much faster than bricks and mortar retail business. The current generation of college kids are much more comfortable buying online than in a physical store.

 

Now, if you look at about 5-7 years in the future, when these teenagers will start earning, can you guess where they will be spending their money?

 

What effect does this have on the large format retailers like Walmart or Carrefour? These retailers will find it more and more difficult to maintain their profitability and growth. The metrics they use today to define success will no longer be a window to success. They will need to re-imagine how they do business.

 

In  my opinion, one of the following will prove to be the business model that could work in the future:

 

  • Re-focus the business to become a leader in a chosen category online. This will not be easy as the very fundamentals of their business will need to be re-thought. Strengths (like supply chain efficiencies, etc) are no longer enough to differentiate themselves. The core skills needed for success in this brave new world is about technology and great customer focus. They would then be competing against the likes of Zappos.com and amazon.com.
  • Re-imagine the business model, move towards smaller formats. Provide an extremely personal customer experience and become much more niche.
  • Continue to run the business "as is" but focus on using technology (big data, analytics, predictive analytics, etc) to enable all decisions. These are the businesses, that will need to run their businesses in real-time. SAP and its array of products can help these sets of customers to become capable of running their businesses in real time.
  • Go out of business just like so many book stores have gone out of business due to the amazing success of www.amazon.com.

 

Out of all the above options, there is one common pattern.

 

The only result that a business can get by running business as usual is to go out of business. Every other option requires the retailers to re-think their business models, work out their strengths and pick their battles and fundamentally change the way they run their busineses.

 

The other option that I have not mentioned above is an option that requires someone to think really long term. The idea is that retailers should start promoting the concepts like the ones that Kent Larson talks about in his TEDx talk called "Designing Responsive Cities".

 

 

Such cities will enable the retailers to be close to where their customers live and can then become the places where people meet socially and connect with one another, and by-the-way shop at the stores as they are already there.

 

I don't expect retailers to be serious about such long term concepts and promote them. However, they should keep such ideas on their radar so that they can move fast and support such initiatives when needed.

 

I hope retailers have taken a long, hard look at these trends and are thinking about the future of their businesses.

“Retail and commercial banks should be simple and they should be boring,” Lloyds Banking Group’s chief executive said last week. “The industry must change,” António Horta-Osório told the CBI Scotland annual dinner.

 

Value of HFT Technology 09-11-12-ATempting as it may be for the capital markets to laugh at such navel gazing four years after the financial crisis began, Horta-Osório’s words ring true in electronic trading as well. The market has been losing confidence in computerized trading, from the Flash Crash of 2010 through last month’s Knight Capital scandal, with many other indignities in between.

 

The financial services industry -- including banks and the capital markets -- does have to change, returning to fundamentals, as Horta-Osório advocates. But it must also look forward, preparing for future calamity and searching for new opportunities.

 

Taken By Storm

 

“A successful business must be thoroughly prepared for unexpected disasters,” wrote Bob Guilbert, managing director of marketing and products at Boston-based investment IT firm Eze Castle Integration. “Even just a few moments of downtime could be extremely costly, so it is essential that firms implement sound business continuity and disaster recovery procedures.”

 

Systematic protection of a firm’s data is more than a safety net. The business continuity plan (BCP) and disaster recovery (DR) systems that Guilbert discussed last week can safeguard a firm’s business and an industry’s reputation if disaster strikes.

 

Value of HFT Technology 09-11-12-B“The one positive aspect of hurricanes and other weather-related disaster scenarios from a BCP perspective is that businesses typically have advanced warning of their arrival,” Guilbert said. “A firm that is ill-prepared for inclement weather is going to face serious challenges when an unannounced incident, such as a building fire, occurs.”

 

Keeping such humdrum fundamentals strong will keep the industry’s foundation strong. And that can serve as a mighty launchpad for further, more exciting technological strides in the pursuit of new trading prospects.

 

Big Data Trading Strategy

 

Citi announced upgrades for its equity options algorithms in the U.S. last week, letting traders choose how forcefully to seek liquidity. Aggressive settings incline the algorithm to cross the spread during a trade, while milder settings tend toward mid-market orders and cross the spread less often.

 

Value of HFT Technology 09-11-12-COther market participants are looking to gain their advantage through high-frequency trading (HFT) technologies. Some of these firms are seeking new trading opportunities via Big Data and complex event processing (CEP) technologies, alongside data analytics engines.

 

Part of the trick exploiting Big Data is to adopt solutions that provide insight without losing speed. The rest of the trick is to adopt those solutions without going broke. That not only keeps firms in business, it avoids another scandal that could further spoil the industry’s reputation.

 

(SAP/Sybase, Wall Street & Technology and TowerGroup will host a webcast about opportunities for Big Data in a trading strategy on Thursday. You can register here.)

 

On to the Basics

 

The U.S. Department of Treasury announced Sunday that it will sell half of its stake in AIG. The $18 billion sale means the end of the Uncle Sam’s four-year tenure as the New York firm’s majority shareholder.

 

This also means that the capital markets have a tremendous opportunity to demonstrate mastery of the basics. But that mastery will mean little without a responsible vision for the future.

 

So getting back to basics won’t be boring. It will require innovative strategies and technologies to weather storms and conquer new frontiers.

 

Related Articles:

 

Banks need to be boring, says Lloyds chief” by Philip Aldrick

 

Best Practices for Hedge Fund Data Compliance and Business Continuity Planning” by Bob Guilbert

 

Citi Upgrades Options Algos” by John D’Antona Jr.

On an Inside Analysis webinar , Wayne Eckerson, founder of the BI Leadership forum, and Ken Rudin, Director of Analytics at Facebook, discussed key factors to consider in any company’s approach to analytics.  Here are some points I found interesting:

 

  1. Focus on impacts not insights -- Both Eckerson and Rudin agreed that all analytics organizations and analysts need to promote the importance of measuring the right components of your business to achieve meaningful results.  Tracking results tied to your business’s strategy, rather than making observations about the data is much more effective. 
  2. Focus more on what questions you want answered than the answers -- Rudin advised analysts to think more about what to ask so that you are getting the right data, rather than the answers received—in other words if you ask the right questions, you gain greater insight into your business and customers. 
  3. Be an analytics evangelist, not an oracle -- Good analysts need to understand the business they support.  They need to be able to influence and in some cases sell leadership on new approaches and strategies. Rudin favors analysts being embedded in the line of business, not in a centralized organization operating from the outside

 

Rudin also discussed how he is building a strong analyst team at Facebook in two ways: hiring from the outside and building analysts internally.  During his interviews with potential candidates, Rudin assesses candidates in 3 areas: business savvy, technical skills, and sales/communication skills.  He asks about them to describe a former employer’s strategy and business model; to explain a sophisticated analysis they have completed, and to share an example where they showed leadership, either personally or professionally.  Since the market is tight for skilled analysts, Rudin is also developed a two-week embedded, immersion program to create analysts.  By taking people who are very comfortable with working with data, such as product managers, the program allows other roles to develop their analytics skills.

 

What are your thoughts on where analysts should reside in an organization?  Should they be a part of the division or line of business they support?  Can they be effective as an external organization offering a service?

 

How are you attracting and retaining strong analysts? How are your analysts impacting the growth of your business?

Watch the webcast

If you are interested in another perspective on measurement, check out the recent article, Jonathan Becher, CMO for SAP wrote for Forbes about measuring outcomes, not activities.

telehealth.jpgWhile Right Time Experiences (RTEs) is an unfamiliar term to many, we all experience RTEs on a regular basis. Amazon.com is the classic example of an e-commerce site delivering relevant recommendations in the context of our unique individual browsing and buying history. But RTEs go much further and are more immediately available in our minute-to-minute lives, thanks to our mobile society.

 

“Leveraging context – location, presence, preferences, buying and browsing history – has been around for awhile,” said Vishy Gopalakrishnan, Vice President, Global Center of Excellence at SAP. “But the immediacy of consumption that mobile provides, combined with tools to drive real-time, deep, relevant insights, make the creation and delivery of Right Time Experiences possible today.” Take for example the case of Telehealth where your smart phone tells you when it’s time to order your medication prescription, and then scans and automatically orders it in an instant while tracking the known side effects and symptoms to support your healthcare choices.

 

“The future of mobile is Right Time Experiences,” said Maribel Lopez of Lopez Research. “RTEs enhance business processes by injecting context to provide employees and customers the right information at the point of need.” Two of her examples include Tesco’s virtual grocery store and Streetline’s Parker Mobile

 

Mike Brinker of Deloitte and  Benjamin Robbins of Palador added perspective on designing an enterprise with mobile first in mind.

 

Get your Right Time Experience with SAP Radio here as producer/host Bonnie D. Graham exceeds SAP Radio expectations with her interviews of these and other thought leader experts. Feel free to Tweet your comments to #SAPRadio or comment below.

 

SAP Radio Coffee Break with Game-Changers Logo-121211.JPG

JB2.jpgOriginally published in the September 24, 2012 issue of FORBES magazine as "Counting What Counts - How Outcome Metrics Have Changed the Game"

 

You’re likely to see the world differently if you spend a few minutes with Jonathan Becher, SAP’s CMO. To Becher, baseball and Olympic sailing are good analogies for thinking differently about business. Sports teams are never content to rest on their laurels; they are constantly measuring performance to look for ways to improve. Performance management is one of Becher’s passions, and he defines it as how organizations manage their own performance, improve the performance of employees and chart the best future course against the competition and the uncertainties of the marketplace. Performance management is as critical in business as it is in sports.

 

“Businesses tend to measure the wrong things,” says Becher. “They dwell on ‘activity metrics,’ which are easy to collect,” he says, “as opposed to ‘outcome metrics,’ which monitor impact.” Think of the movie Moneyball, the story of Oakland Athletics’ baseball manager Billy Beane, who, in 2002 and with a limited budget, found a new way to think about a familiar game. Whereas old-school coaches were focused on an activity metric—batting averages, for example—Beane chose to measure and prioritize outcome metrics like on-base percentage.

 

These new metrics influenced the kind of players the team acquired: less flashy, “average payroll performers,” says Becher. These players had modest batting averages but also possessed a knack for getting on base; a fact that, from an outcome point of view, had more to do with what really counts— winning the game. “The point is,” says Becher, “whatever your situation, you have to run better. In sports or in business, the analogy works.”


Dynamic, outcome-based information may also dramatically change the sport of sailing, according to Becher. SAP technology gave crews in this year’s Olympics three kinds of outcome metrics. Sensors on each boat relayed tactical data to crews, improving performance in real time. During breaks between races, benchmarking analytics allowed crews to quickly compare their race against the decisions of other crews. Predictive analytics can gather weather and tidal data to help crews ready themselves for the next starting gun. For Becher, SAP’s entrance into the sporting world allows the company to “go where people already are,” showcasing what the company does for businesses in a way that makes sense to most people.


“We live in an increasingly data-driven world,” says Becher. “Unlocking the power of data and analytics provides insights and a competitive edge for athletes, coaches and spectators—just as it does in business.”

doctor.jpgAs the world’s largest provider of medical devices, Medtronic ensures the health of 7 million patients every day. That’s one patient every four seconds, and to meet this high demand—and save lives—Medtronic relies on innovative solutions and reliable software, like SAP HANA.

 

Medtronic is an innovator in the healthcare field.  Its HeartRescue Program improves the odds for sudden cardiac arrest victims by teaching signs, symptoms and emergency response techniques.  It also provides essential cardiac equipment.  Every year, almost 300,000 Americans are struck by sudden cardiac arrest-which occurs when the heart stops and fails to pump blood to vital organs in the body. Only 8 percent survive nationally and there has been little improvement in survival rates.  

 

Medtronic’s HeartRescue Project has partnered with Duke University, The University of Pennsylvania, and AMR, the nation's leading manager and provider of medical transportation.  Together they have improved out-of-hospital SCA survival rates, with even greater improvements predicted.  The Medtronic HeartRescue program is also strengthening systems of care and increasing community awareness about a major healthcare issue.

 

But HeartRescue is just a small part of Medtronic’s portfolio.  The company develops and manufactures devices and therapies to treat more than 30 chronic diseases- including heart failure, Parkinson's disease, urinary incontinence, obesity, chronic pain, spinal disorder- and diabetes.  As a leader an essential industry, Medtronic needs to run at its best, but they have faced challenges their massive databases. 

 

With more than 7 million global customers, Medtronic receives a huge amount of customer feedback.  For a long time employees could not generate certain types of reports (particularly using unstructured data), resulting in a limited ability to draw conclusions from existing customer data.  They needed to better analyze large amounts of data to produce and distribute the life-saving equipment at the fastest rate—and SAP HANA provided a solution.

 

An Early Launch of HANA

 

SAP HANA was selected for two of Medtronic’s most important business components: Global Complaint Handing and Global Sales Reporting. An early adopter of SAP HANA, Medtronic was impressed by the high performing, flexible platform that enabled data analysis at the most granular level. HANA met key requirements and overcame challenges that the existing Oracle platform could not address.

 

Data response times with the SAP HANA platform are roughly one-third the speed of previous systems, which allowed Medtronic to improve its efficiency and effectiveness.  HANA’s in-memory technology has helped boost sales and garner a higher understanding of patient satisfaction.

 

Using SAP HANA- Medtronic can respond with greater agility to its business data, resulting in greater sales and higher-quality products.  “Application users at 4 The Power of Instant Customer Insight Medtronic [Medtronic’s customer feedback system] have very high performance and quality expectations, and we are focused on trying to achieve a single source of truth solution for reporting,” said Steve Teichman, IT director for business intelligence at Medtronic.

 

Going Forward With SAP

 

Since adopting SAP software in 2003, Medtronic has grown substantially.  Now Medtronic is working with SAP to develop an application for text-based analytics to better leverage the wealth of unstructured data on which the global complaint-handling system relies, such as free-text fields where a lot of notes are taken.  Having access to even more data will likely enable this business leader to continue to provide life-saving equipment and therapy.

An employee of a major multinational company typically doesn’t expect the CEO to pick him or her up for work in the morning. But for SAP employee Frederic Heinemann this happened.

 

In August 2011, Heinemann posted a ride request to TwoGo, SAP’s pilot ride-sharing program near its headquarters in Walldorf, Germany.   Just few days later, he says, “I got a matching ride. Confirming it I noticed that my driver [was] Jim Hagemann Snabe.” 

 

Hagemann Snabe is co-CEO of SAP, and just like other SAP employees working in Walldorf, Germany and Palo Alto, Calif., he was volunteering to share his daily commute with fellow workers, getting to know them a bit better along the way.

 

In July of 2011 SAP began to roll out TwoGo, a ride-sharing program for employees. It aimed to reduce spending on fuel and to lower SAP’s carbon footprint. Now, just a year later, there are 6,700 registered users sharing about 350 rides every week. TwoGo has already prevented 47 tons of greenhouse gasses from entering the atmosphere and is worth an estimated 2.5 million Euros in travel, networking time, and CO2 emissions.

 

But there is also a less obvious advantage. When employees carpool, they get to know each other better.

 

“For me, the best part of using TwoGo is the chance to spend some time with SAP colleagues whom I might not otherwise meet,” says Hagemann Snabe. He also appreciates the potential for spontaneous collaboration between employees from departments, hoping to facilitate new ideas and build community. During the first year of the program, SAP participants spent 1400 days in cars with each other, networking and getting to know each other better.

 

The program is a success not only in sustainability, but in software as well. Using SAP’s TwoGo platform is remarkably simple because of the company’s existing toolkit of smartphone integration, data processing, and international connectivity. Unlike existing ride-sharing services which require users to wade through lists of possible matches, TwoGo finds a ride for you.  It even suggests rides to users without any prior activity once it knows where commutes start and end. The platform even syncs with Blackberries and Outlook calendars, so there’s nearly no setup required for users.

 

Implemented in the cloud, TwoGo can be immediately rolled out and put into use everywhere. So, when the program becomes generally available in the next few months, all companies need to do is start it up for instant ride-sharing, whether they have employees in one town or spread out over seven continents.

Using SAP software, TwoGo is capable of organizing rides within minutes, even with thousands of users.  One SAP employee recalls sitting down to breakfast with his son, who wanted to borrow the family car. He tried TwoGo on his smartphone for the very first time and, within five minutes, received confirmation that someone would pick him up for work that very morning.

 

TwoGo will be available for customers soon.

More than a quarter of market participants find its current structure “very weak,” according to a recent TABB Group poll, which indicates that all-too-frequent computerized trading goofs are eroding market confidence. Last month’s Knight Capital tech tragedy killed almost 20 percentage points-worth of warm fuzzies.

 

Big Data Management 09-04-12That’s 26 percent of drivers behind the trading wheel feeling that the track is “very weak,” up from just 7 percent in June and 3 percent in May. Slowing down the markets would help prevent such disasters and restore investor confidence, according to more than 30 percent of asset managers polled.

 

But they aren’t taking into account the cost of easing off the accelerator.

 

Pedal to the Metal

 

There’s no yellow flag flying over the market yet. So decelerating electronic trading is a bad idea, Irene Aldridge of New York-based high-frequency trading service provider ABLE Alpha Trading wrote last week.

 

“Modern market-makers’ profits are directly related to the number of market orders they service,” Aldridge said. “The more trades the market-maker can take on within a given fixed period of time, the higher is the market-maker’s profitability.

 

But a false notion of high costs keep feet off the gas pedal, which in turn keeps higher speeds out of reach. And that’s because those in upper echelons don’t understand how things have changed since the 1990s.

 

Fifteen years ago, the cost of purchasing technology required for a modern high-frequency setup was tens of millions of dollars, Aldridge said. “Today, comparative systems cost a few thousand dollars.

 

Don’t Be Yellow

 

Still many organizations see a yellow flag flying over their Big Data strategy, telling them to be cautious.

 

“There is a tipping point when the value in Big Data exceeds the cost of obtaining that data,” SAP’s Neil McGovern told Compliance Week. As the cost of tools decreases and their value increases, firms will draw near that tipping point sooner.

 

That tipping point can be the green flag. Technological advances can help get firms to the starting line at the same time -- or before -- their competition.

 

Data storage is becoming more efficient, leading to correspondingly efficient retrieval and better real-time analysis, as McGovern noted. The past decade has seen advances in data warehousing, but McGovern predicts that future analytics could locate and examine data at its underlying source.

 

A Sleeker Ride

 

And open source technology is helping to streamline HFT’s muscle car by making it easier to manage Big Data.

 

“Without open source technology, we’d be hobbled applying analytics solutions to Big Data problems,” SAP’s Irfan Khan wrote in IT World last week. “Instead of having to learn about the Business Application Programming Interface, the BAPI, developers today can use a variety of languages, including Ruby and PHP, then connect to SAP applications via the NetWeaver Gateway.”

 

Sybase developed its Big Data solutions with the Red Hat Linux operating system, as Khan pointed out. These include SAP Sybase IQ, SAP Sybase Adaptive Server Enterprise and SAP Sybase Event Stream Processor. And SAP HANA uses SUSE Linux Enterprise Server.

 

“Open source technology is less considered competition than it is a toolbox,” Khan said. “And that’s great news for organizations trying to solve their big data problems.”

 

Finishing Touch

 

Watching others stumble in electronic trading can be disheartening for everyone, but it isn’t the time to throw in the towel. It’s the time to learn from mistakes, hone algorithms, invest in the right technology and race for the checkered flag.

 

Related Articles:

 

Slowing Down Markets is the Wrong Way to Go” by Irene Aldridge

 

Big Data: For All Its Promise, Obstacles Remain Ahead” by Alix Stuart

 

Big data owes big debt to open source” by Irfan Khan

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