Blog: Craig Schiff

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July 17, 2006

Another View of the BI/BPM Future

I recently received a copy of a BI/BPM research report from a technology-focused investment bank called Boston Corporate Finance. The report tracks the trends they have observed in the space as well as some projections as to what may happen in the near future. Some of the information is well-known and obvious, while some of it is thought-provoking. Much of what they see is in line with what we have observed ourselves so they have clearly done their homework. They comment on the merging of BI and CPM (Corporate Performance Management or BPM Business Performance Management), they see predictive analytics generating new interest in the space, they note the convergence of structured and unstructured data, .and they speculate on potential IBM BI acquisitions. It's certainly a worthwhile read and you don't even have to register to get your own PDF copy. Just follow the link above.

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July 10, 2006

EPM - The Next Big Thing?

EPM, or Employee Performance Management, seems to be on the upswing. Its focus on identifying, measuring, and monitoring employee performance against specific goals and then tying it to incentive compensation plans is a natural extension of BPM - Business Performance Management. While BPM lays out strategic objectives at a corporate and departmental level, EPM brings it down to Earth and makes it actionable at the employee level. The rise of BPM has generated renewed interest in EPM. For some time now this kind of work has been done with high-priced consultants and spreadsheets. Now there are several firms advocating application software solutions. Those firms include IXP3 in Australia and Strategix Performance in the U.S. among others. We think there is a definite need for this and it can magnify the benefits of a BPM initiative. Is your firm an EPM user or prospect? I'd be interesting in hearing about your experiences with EPM.

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July 6, 2006

The Essential Elements of Predictive Analytcis

Numerous vendors lay claim to the ability to provide predictive analytics. These firms include Business Objects, Computer Associates, and OutlookSoft as well as several others. While they all seem to agree on the basics - predictive analytics enable a company to more accurately determine the potential outcomes of today's business decisions - they disagree on how you get there. In other words, much like business performance management itself several years ago, vendors and consultants are taking the opportunity to define the requirements of predictive analytics to fit their own capabilities. To begin the march towards a more standard definition, and therefore more stable ground for end users (as well as consultants and vendors), we would like to propose a list of 12 key elements to look for in a predictive analytics system.

The list that we are about to share was developed by a firm we have recently become aware of called Isis Solutions. They focus almost exclusively on predictive analytics and their executives have a strong grounding in advanced mathematics. While we think it is a good, fairly inclusive list, it certainly is open to debate if this is the last list we'll ever need of required predictive analytics components. We are looking for your feedback to help further develop and evolve the list. Now on to the list. Before you can predict you need to analyze and forecast. The first 7 elements focus on analysis: Variance Analysis - to identify deviations, Cost Allocation - to calculate operating income, Activity-Based Costing - to determine efficiencies, Slope - leading indicator of future trends, Mean - key indicator of performance, Standard Deviation - measure of variability in the business, Statistical Process Control - identify processes that are in and out of control. Next comes 3 elements related to forecasting: Holt Winters - seasonal forecast, Linear Regression - linear forecast, Flex to Historical - volume forecast. Lastly come the 2 elements that enable you to predict: Monte Carlo Simulation - calculate the confidence in the forecast, and R Squared - identify the hidden relations between actions. This list of 12 essential business analytics is intended to provide the key elements necessary to enable an organization to more accurately predict its future. Do you agree? We'd like your input.

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