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Visionary Strategic & Tactical Profit Decisions
by Bozidar Kralj
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It is about how to set up Company Information System to gain
new profit streams.
Competitive Intelligence is within company. But, there is no
platform to allow internal fine tuning of profit contributions.
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Problems can be grouped on: structured, non structured and partially structured. Structuredproblems are repeated, routine problems and decisions are same (repeated and routine).
Structured problems are common on lowest (operative) level of management. Partly structuredproblems are not routine and is not known how to solve problems and what are the steps.This level of problem solving needs experience and management feeling.
Unstructured problems are complex problems. For those problems there are no obvious androutine solutions and manager and his knowledge has major roles. Problems mostly appearfor the first time. Unstructured problems are solved with unprogrammed decisions: noknown procedures, situations are new, each case is independent and needs individualapproach.
Structured, routine problems solve operative management levels while unstructured problems
solve highest, strategic levels of management.
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What is problem more complex, higher level of management will solve it.
Same as problem solving types is usage of business intelligence BI tools. BI tools extract data from production
systems for operative work, for tactical decisions and for strategic decisions.
Lowest management levels
Top management levelsNon structured
problems
Structured
problems
Unprogrammed
decisions
Programmed
decisions
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Figure (left, above) shows process of how data
is converted into information, information intoknowledge and knowledge into wisdom. This is
how it should be.
Problem is that big companies do not have only
one business intelligence solution but more
than one. So if there are more BI solutions,
information and knowledge generating looks
like many cones (left, below). Cones/pyramids
provide knowledge to management structures,
separately.
Complex systems in big companies can not have
only one BI solution. Many solutions exist since
technical boundaries do not allow creation of
one super cone with drill down capabilities
through company data.
Each Data Mart can be considered as one
information island, consolidated and integrated.
Portal
DWH
Production
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So, how does report for top management look like? Just imagine white paper on top of cones. Top
management reporting just gathers aggregated data from many BusinessIntelligence tools, portals,dashboards, scorecards and similar. Below the cones are data-marts.
Paper copy, report,
dashboard
Look from the top on the cones and white
paper, data look like on the figure below. This
data are
highly aggregated from data mart's. Data
marts are stand alone logical business
models, important is to highlight data withindata marts should be highly integrated and
usually are.
Highly integrated peaks of cones represent
Key Performance Indicators (KPIs).
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CustomersCustomer
Satisfaction
Financial
ratios
Financial
statements Products
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So looking from above data islands
perspective would look like spots on plane.Plane can be hard copy of company official
report or corporate dashboard.
Let's give names to spots on plane. Each
spot can contain from several KPI's up toseveral hundred KPIs.
And how does more detailed report look
like, report with more KPI's would look likethis. It is only more stuffed report (from the
point of cone it is something like this)
It only means more data from
pyramid/cone.
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Aggregated report
Detailed report with hundreds of KPIs
All depends on wanted the level of details and raising or lowering analysis details (blue arrows).
Business Intelligence Manifest | Providing Genuine Advantage | Bozidar Kralj | 2010-11-30 | Page 10
Looking once again from front view on data, pyramid delivers data on
requested level of detail. Information quantitiy is equal to less or more data
provided (size of circles from previous figures)
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Is this easy to achieve?
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Next step,
how can strategic decision maker see
connection between balance sheet and
customer satisfaction? It is part of
nonprogrammed knowledge.
Or how can EVA from financial ratios be
connected with residential customer
segmentation? Figure (left) shows data
connection between EVA and residential
customer segmentation trends.
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Strategic and Tactical management decisions are based upon many additional data, additions
that include cross referential data from different business intelligence solutions.
For example, business cases need data from different data marts/business intelligence. For
better understanding business cases (projects) are presented with different irregular shapes
(blue and purple) and business intelligence as circles (looking cones from above).
Business Case #1
Business Case #2
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Regular strategic and tactical decisions deal with hundreds of business cases.
Is there an issue with information and knowledge flow? Definitely.
It is not easy to connect data from separated data islands, data-marts. There is no direct and obvious
connection how customer segmentation changes affect EVA at the start! There is NO FAST CONNECT IVITY!
After some time (usually 2-3 years) management gets solid reporting functionality for only one task.
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After getting static knowledge in form of static presentation of company performance
(cones and KPIs on plane) strategic decion makers want to see dynamic knowledge.
If decision is made, action followed, results need to be measurable. Decision has to bepossible to be measured through complete company (not separated islands). Decisionhas to be possible to make as many times as wanted in many variations and in bundlewith other actions (not as isolated action like in laboratory, because company is notliving in laboratory)
This is DYNAMIC KNOWLEDGE.
Does planning process solves this problem? No! It is in right direction but it is very rigidand slow. Planning is done separately in independent processes and units. Knowledgestays there. Decision makers receive only bread crumbs. And speed is essential. Can not
wait one year for next planning round and forecasts and follow ups every few months.
Dashboards are also static. Do not create dynamic knowledge.
And decision makers do not need static picture on TV, but movie!
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D
If actions are made and there are
many effects on surface is it
possible to measure impact of
many different decisions in point
D?
Each decision is similar to waterdrop on
water surface. Results are spreading radial.
Apply waterdrop effects on management
reports (dashboards) and will cause many
radial results (figure below). Dynamic
knowledge acts like fluid.
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Managements wants to know is how effectively to measure
actions.
If decision and following action happens in company it is
similar to raindrop and radial circles around water drop.Waves are influencing other KPIs in dashboard or official
report.
Influence of one decision/action is not easy to calculate on
other KPIs
Impact of many decisions, raindrops was impossible to
measure until now.
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It is possible to measure all actions if all data island peaks are connected
with platform that provides integration on level of KPIs (red dashed lines).
Solution is one platform that connections between peaks and that
provides for peaks to act as one, like simulator for all actions on integrated
level. Model blueprint of solution is Total Controlling Concept.
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Total Controlling Concept is the future standard.
There is no other more profit oriented business
intelligence and management reportingblueprint. Nor now nor in near future.
Can you afford to be follower or gone be proactive?
Find introduction of TCC herehttp://www.business-intelligence-secrets.com/free-download
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I do!
It is Total Controlling Concept for Perfect Management Reporting!
Because, I look on problem totally differently then others.
Differently does not mean necessarily it is good, BUT
I've seen it, adopted initial
model, developed idea,
worked on prototype.
Prototype worked.
That is why I'm totally
confident TCC crosses
chasm.
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With blueprint youll learn how to integrate allrelevant data into one mega reporting-simulating
solution. Use the knowledge to negotiate best for
you with current solution provides.
Business Intelligence Manifest | Providing Genuine Advantage | Bozidar Kralj | 2010-11-30 | Page 24
With TCC implementation
youll be capable to find
hidden influences betweenKPIs and official reports =
EARN MORE PROFIT FROM
EXISTING BUSINESS
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Contact:
http://www.business-intelligence-secrets.com
Business Intelligence Manifest | Providing Genuine Advantage | Bozidar Kralj | 2010-11-30 | Page 25