Inside the Biz with Jill Dyche

Six Telltale Signs of IT Failure

In which Jill puts her ear to the ground—and hears that giant sucking sound.

We see high-functioning IT organizations that manage their pipelines according to weighted prioritization frameworks that account for business value, available data, and consensus of need. They manage their assets proactively and apply the right skills. They know how to talk to business people.

All this sounds like standard operating procedure, right? Not so fast. There are IT organizations that wait for the business to engage, assign resources haphazardly and without forethought, fail to scope work, and use jargon so thick it would clog your arteries if you drank it.  The well-worn adage is that if you look up and you see that you’re in a hole, stop digging. If there are tools of the trade for IT mediocrity, these six are the shovels:

1. The CIO is all about keeping the lights on. There have been some high-profile decisions in the last several years—News Corp and Harrah’s come to mind—of companies deciding not to replace their former CIOs. The implication is that these guys simply keep the machines humming, right? Show me a company that measures its IT leadership by system uptime and I’ll show you a bunch of unhappy IT employees. Or a company that’s increasingly offshoring core skills.


2. IT is viewed—and run—as a resource pool. One client recently tried to explain to me how its BI team members were also responsible for delivering on non-BI projects. Uh oh. Spreading resources too thin risks blurring the lines between projects, rendering completion vague and inchoate.


3. IT management tries to squelch information or suppress feedback. A data warehouse manager recently sidled up to me after an executive readout and said, “Thanks for not throwing us under the bus.” We wouldn’t have—the data warehouse while immature wasn’t a showstopper—but he thought it might be. The point is that he attended the readout anyway. Many IT managers instead choose to circle the wagons, not participating in open forums that might result in reprioritized work tasks or suggested improvements. Worse, they’ll actively spread negative buzz about a new project or the group that’s leading it. That giant sucking sound? It’s the competition hiring your best people away and leaving you with the paranoid jerks.


4. Lack of business-IT alignment. More specifically, the business won’t consult IT before commissioning outside vendors. It’s an erosion of confidence and trust. Despite our nudging, a media company’s marketing department refused to engage IT before building a CRM solution. Finally ceding to our pressure, marketing agreed to put the internal IT organization its vendor list. IT had to respond to the RFP on equal footing with the CRM vendors vying for the work.


5. No closed-loop success measurement. Perfunctory costing worksheets hastily completed and subsequently forgotten are far more pervasive in IT organizations than aligning IT projects with business priorities. So what is success, anyway, and how do we measure it? We wrote ten thousand lines of code. Our data warehouse has 700 tables, and 450 of them contain over 10 million rows. We’re up to twelve terabytes. And yes, we’re ignoring you.


6. No repeatable rules-of-engagement. You simply cannot gather sustained business requirements by leaning in someone’s cubicle doorway dizzily scribbling into your Moleskine pad. Nor can you represent clear business needs by asking someone what data elements they want, or replicating their Excel spreadsheets in the BI tool-du-jour.

Here’s another indicator we’re seeing more often: if someone who works in your company won the lottery, would losing them put you in deep doo? If so, get a shovel and start digging.

photo by lanchongzi via Flickr (Creative Commons License)

They’re Baaaack! IT Spending in Retail Returns

In which Jill peeks into the pipeline—and sees retail for a change!

In the arena of retailing, we’re all players. But many of us are also spectators, sitting high up in the stands and watching as the game plays out. Lately, the retailing game has been a blood sport, and household names—Circuit City, The Sharper Image, and Linens n’ Things among them—have been casualties.

We’ve been working with retailers since Walmart got its first data warehouse (my partner, Evan, was one of the system engineers on their first Teradata installation), since Kmart beamed POS data over satellites, and the apocryphal diapers-and-beer saga went mainstream. In those early days, it was all about analyzing POS data. Subsequent merchandise management and supplier exchange initiatives cemented the need for IT as both a strategic and operational enabler.

In the early 2000s, as they struggled to implement customer loyalty programs and endured criticism for over-investing in CRM technologies, retailers curtailed their IT spending. They had data warehouses—often several—and kept their attention focused on enterprise applications and e-business capabilities. With the exception of some beleaguered grocers and a sprinkling of catalog companies, we didn’t see many retailers spending on either consulting services or new software solutions.

But things are changing in retail, due in large part to five key areas that retailing executives have earmarked as strategic priorities:

Social media: It’s one thing to create a corporate avatar, set up a Twitter account, and lure customers to your Facebook fan page. It’s another thing altogether to proactively collaborate with customers on product ideas, garner feedback on service improvements, cement your brand messaging, and monitor the buzz. Retailers are getting serious about social media. After JCPenney ran a contest asking customers to post photos in their Penney-purchased apparel, the retailer’s Facebook fan base began increasing by a few thousand a day. “It’s a much more significant part of our marketing mix and it will continue to be a bigger part of our marketing mix,” said a Penney exec about social media.

Survey software: Put simply, retailers are formalizing feedback mechanisms, and executing on their findings. Several retailers we work with have announced new “Voice of the Customer” programs, driven by C-level executives. While most large retailers continue to rely on market research, they’re combining it with customer surveys at the time of purchase in their brick-and-mortar locations as well as on-line. Discounts on future purchases not only get customers coming back, but shopping via different channels—customers who shop across multiple channels are known to be more profitable—thus increasing the retailer’s share of wallet.

Master Data Management: Retailers not only need to manage customer relationships, they must share that data across sales channels, locations, and brands. Retailers came late to the MDM party but they’ve taken a seat and are listening to the music. More than ever, retailing executives are seeing the business impact of so many silo-ed applications and are mandating a “single view” of their customers. MDM not only promises to help retailers harmonize individual customer records across channels and brands, it helps them reconcile their product catalogs and store locations and standardize pricing. Welcome to MDM, retailers, pull up a chair!

Retail in the cloud: Retailers still hamstrung by headcount and IT budget cuts are turning toward the software as service (SaaS) model to enhance both operational and analytic capabilities. Many are looking to hosted services companies like PivotLink and Retail Solutions to deliver self-service, web-based analytics or to provide POS and inventory data to suppliers. Larger retailers may look to outsource customer identification and data enrichment functions by leveraging third-party providers like Acxiom. Mid-market retailers in particular have been looking to the cloud to enhance their reporting and data quality capabilities without adding headcount or hardware.

On-demand reporting: As they increasingly compete on service, retailers are exploring ways to deliver customer intelligence to front-line sales staff. “We use a range of analysis tools, from basic reporting to statistical modeling tools,” explains Kakoli Seal, Vice President of Customer Insight and Database Marketing at Saks 5th Avenue. “But getting information into the hands of our sales associates so they can deliver superior service is a priority.” Saks 5th Avenue uses sophisticated clienteling software to deliver customer contact and other details to its associates. Similarly, a specialty retailer uses mobile dashboard vendor Webalo to deliver purchase history to sales associates, thus enabling them to advise customers as they shop.

With all the emerging technology hoopla, retailers are still focused on two main issues: managing inventory levels and retaining customers. Both involve a little art, a little science, and leaders who are willing to question established industry norms. Indeed the days of unwieldy enterprise applications and IT infrastructure overhauls are a thing of the past in retailing. In their quest to be nimble, retailers are seeking new solutions—and fast.

Interested in learning more about how retailers are re-embracing business intelligence? Read Jill Dyché’s latest white paper: Information for Everyone: BI Evolving in Retail. Download the paper here.

photo by NNECAPA via Flickr (under Creative Commons license)

BI in Health Care—and Everywhere Else

In which Jill observes that the maxim, “Physician, heal thyself” can have several meanings.

Several years ago, Baseline Consulting received a blind Request for Proposal from an HMO. The RFP was for help building a BI strategy. Right up our alley. Trouble was we didn’t have many references in the healthcare sector. At that time our largest competitor had a practice dedicated to healthcare. While Baseline routinely won competitive bids in retail, financial services, gaming, insurance, communications, and other verticals, our competitor had healthcare locked up.

Moreover, like many consultants and vendors, we tend to be suspicious of blind RFPs. Being asked to answer a lot of complicated questions, and even divulge some IP, by a prospect where there is no pre-existing relationship, no referral, and no attempt at personal outreach can be a dicey proposition. One BI vendor of note refuses to even entertain blind RFPs. “When you get something out of the blue like that, it usually means you’re column-fodder,” their sales executive said recently. Blind RFPs are like the guy on the Times Square side street who wants to show you some nice Rolexes. You want to check them out, but you’re dubious.

The combination of these two factors led us to send the HMO’s contact a polite “thanks anyway” note, congratulating them for realizing the promise of BI in an information-rich industry, and wishing them luck on their BI journey.

Surprisingly our V.P. of Client Services received a call from the HMO contact right after she received our no-bid notice. Danielle was the HMO’s BI Program Director, and she was insistent. “We really want a proposal from Baseline,” Danielle said.

Our V.P. thanked her and explained that we were pretty sure who the competition was, and that we didn’t have their healthcare industry chops and thus had decided to forego the proposal process. But Danielle was unrelenting. She made her case, firmly explaining that the HMO’s evaluation process was multi-dimensional and involved more than just healthcare expertise. We would be given a fair shot at the business.

So we bid it, proposing our BI Portfolio service and roadmap, and waited for the inevitable “thanks anyway” e-mail. Instead, we received an e-mail from the HMO’s procurement manager informing us that we’d won.

In a meeting with the HMO’s CIO a few weeks later, still dazed by our unexpected success, we asked about their consulting evaluation process. We’d been honest about our lack of healthcare experience, and wondered why they’d picked us in spite of it.

The CIO replied, “You guys don’t get it, do you? You won because you DON’T know healthcare.”

My team and I could only look at one another.

 “What impressed us was your experience with customer intelligence,” the CIO continued. “You guys showed examples of the value of the 360-degree view of customer, customer profiling, and tracking a customer across his or her relationship with a retailer. That’s exactly what we need to do with our patients. We want your knowledge of retail. Honestly, that’s where healthcare’s headed.”

The CIO didn’t know how prescient he was. In the subsequent engagement and several more after that, we learned that applying customer intelligence principles from the retailers, banks, gaming companies, and other industries we’d worked with was nothing less than innovative in healthcare. After all, the idea of a  customer relationship lifecycle, with its myriad channels and touchpoints, mirrors the continuum-of-care goal of most of today’s healthcare providers . And all the user adoption challenges we’d seen in other industries paled in comparison to those in healthcare where physicians—notoriously set in their ways—now use BI to make smart decisions about patient care—not in an office or a cubicle, but at the bedside.

In an increasingly competitive industry where disruptive new entrants are taking healthcare administrators by surprise and the question of wholesale reform is not an “if” but a “when,” the patient-centric view is nothing less than strategic.  “We don’t need experience in healthcare,” the CIO concluded. “As it is, we already have more than enough ourselves.”

Photo by carlsonimkeller (via Flickr)

Social Media Renders Your Marketing Strategy Obsolete. NOT!

In which Jill admonishes marketers to be deliberate about their strategies now, and tweet later.

photo by Matthew Oliphant

The evolution of social media has all my marketing and CRM buddies a-twitter. (Sorry). They understand that there is promise in using social media tools to strengthen their brand images, to share company news, and to connect with customers and prospects. It’s just that they can’t seem to tear executives away from their balance sheets long enough to enlighten them.

Indeed, faced with falling stock prices, budget cuts, and shareholder disaffection, your CFO is all for social media, as long as it’s free. Your CEO thinks Delicious is a porn site that should be blacklisted from corporate access. And forget about asking your CTO to start blogging. He’s hunkered down trying to figure out the next disruptive innovation, and pronto!

But your marketing department is intrigued, enough to form a social networking task force and send twenty seven staff members to BlogWorld Expo. And just when you think social media has saturated the marketing Zeitgeist, you overhear your CMO say the words, “Friend me” to a supplier. This exchange strikes you as obscene, not because of any sexual undertones but because what the hell is he doing on Facebook anyway, he has a marketing organization to run!

If you’re like me, you’ve noticed that the social media buzz is taking far more time and energy than the answer to the question, “How will sales and marketing support this year’s corporate objectives?” Many sales and marketing organizations have emphasized social media at the expense of their strategies. It’s as if strategy doesn’t matter anymore.

Newsflash: It does. Moreover, the past is prologue. Companies that emerged from the last recession did so by returning to fundamentals. They understood that technology—even the coolest let’s-get-naked-and-party, Sandhill Road-backed, WTF 2.0 software—was nevertheless still a means to an end. In 2001, writing in Harvard Business Review as the dot-com bubble spewed its detritus far and wide, Michael Porter said of the Internet:

“Two broad conclusions can be drawn. First, many businesses active on the Internet are artificial businesses competing by artificial means and propped up by capital that until recently had been readily available. Second, in periods of transition such as the one we have been going through, it often appears as if there are new rules of competition. But as market forces play out, as they are now, the old rules regain their currency. The creation of true economic value once again becomes the final arbiter of business success.”

If you substitute the Internet theme of Porter’s assertion with social media, the same truisms apply. Companies still have to articulate how they intend to compete in the market, serve their customers in differentiating ways, and innovate. Smart marketing, customer experience management, and CRM leaders will lift their heads from their Facebook 25 Things lists, craft a deliberate, multi-media plan that supports their firms’ unique value proposition, and then—only then—determine how social media will fit. Got that? Okay, now friend me.

When to Hire a Consultant

In which Jill relates how she put herself in the hands of an expert and only looked back once. (For those of you literal interpreters: this blog is a metaphor for something completely different, but we’ll let you figure that out.)

I have deep ambivalence about my hair. My friend Debbie would cut and color it every six weeks but it would turn brassy and lifeless before the next appointment. In a crunch I’d run over to Supercuts for a trim. But facing an imminent photo shoot for the book jacket of our CDI book, I decided it was time to invest in some serious hair color. One of my dog park friends saw a haircolorist-to-the-stars, a woman I’ll call Sally. Sally is bi-coastal. Sally is famous. Sally did Meg Ryan’s color. I wanted her to do mine.

So after being fully vetted by an assistant to an assistant (“And you are…who?”) I got an appointment. As I sat in the Santa Monica waiting room I felt that I was about to be nurtured. The place was polished but homey. Refined but relaxed. When Sally walked in, she exuded a mixture of competence and cool. (Never mind that I would have to grease my thighs to fit into her bell-bottoms.) Sally was fabulous. As she tousled my hair I felt myself surrender. After two colors, three hours, and four cappuccinos, my hair color looked smokin’ hot. When I asked her how to maintain it, she said, “Come back.”

Then I got the bill.

Come back? Yeah, if I skip food and turn off the heat this winter. The cost to color my hair made me wobbly. I could have seen Debbie for half a year for one Sally visit. I could have gone to Supercuts more than a dozen times! I could have done my own over the sink with two old towels and the spray faucet. I could have grown out my roots and looked campy, for chrissakes! What was I thinking?

But I went out into the world with fabulous hair. My friends (yes, the ones from the dog park) asked me if I’d gotten Botox and my boyfriend thought I’d given up meat for good. My hair was shiny in a believable, does-she-or-doesn’t-she? kind of way. I couldn’t ignore the results of Sally’s handiwork, and neither could anyone else. On a workshop evaluation form one attendee wrote, “Jill has great hair!”

When my hair started to grow out, I rationalized that if the cut was good I could get away with a cheaper stylist and occasional touch-ups. Awaiting a delayed flight one afternoon I ended up in an airport barbershop and told the barber to just “copy the existing cut.” I left the barbershop looking like I’d just been sucked into a ceiling fan and spit out again.

I went back to Sally six weeks later. I told her my story. She looked at me, rolled her eyes, ran her fingers through disheveled locks and announced that we’d be starting from scratch. When she gave me the bill and I started to quietly wheeze, she put her hand on my shoulder and said, “Honey, if you don’t have time to see me regularly, I’ll give you the formula for your haircolor and jot down some notes on texturizing, okay? Just keep it in your bag.” She looked at me as if reprimanding a naughty puppy who had knocked over the trash but that would very soon be bringing her the morning paper.

Now I see Sally two or three times a year. She’ll tweak the color and tell me how to wear my bangs differently. Sally gives me extra confidence, an injection of expertise. I know what to do with my hair when I’m not sitting in her chair. If I have a question I can call her assistant and leave a message. (You can only do this if you are a past or current client.) She’s set the standard for me to follow, and follow it I do—sometimes all the way to Supercuts. But I make sure and book my regular “headcheck” with Sally. Ultimately it’s been well worth it.