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Copyright: CALUMO Fri, 07 Mar 2008 00:36:45 +0100 Whilst enthusiasm and investment in business intelligence and performance management projects continues across enterprises of all sizes and all industries, major project successes cannot be taken for granted.
From enlightening to disappointing, we use the “helicopter view” and “head in the clouds” analogies to describe the range of outcomes possible from business intelligence projects.
The "Helicopter View" is a metaphor for rising above the detail of the situation so that you can see it as a whole, and see the wider context. It means taking the overview in order to see the essential rather than the detail.
Business Building Blocks
Convergence of Data and Performance Management Applications Performance Management includes a multitude of Business Intelligence applications. The benefits of the “Helicopter View” can only be fully realized when the entire suite of applications is integrated into a single unified application or platform. Inextricably linked to unified application is the requirement for the convergence of data. Gather the data to support the above "business building blocks” and “performance management applications”. Transform and make it consistent via such processes as Master Data Management and data cleaning (if necessary). Integrate and package the data for BI consumption. The “Helicopter View” relies on the convergence of both data and performance management applications. Without a business intelligence helicopter view, supported by reliable and timely detailed information produced by quality and repeatable processes, you could be running your businesses with your head in the clouds when your focus should really be on the ground.
Mon, 25 Feb 2008 05:08:16 +0100 On Feb 14, 2008 New York City unveiled a new online performance management system they called "Citywide Performance Reporting" (CPR). CPR takes 500 key performance indicators, which are updated monthly, and makes them available to the public online. You can visit the New York CPR site here. With an annual budget of US$58.5 billion, NYC is many times larger than Australia's largest council; however the performance management challenges faced by NYC are still comparable to those faced by Australian local government agencies. The New York City press release said: "CPR is the culmination of more than two years of work coordinated by the Office of Operations, and involving more than 40 City agencies." The three key benefits of CPR can be summarised as follows:
You can read the full press release here. Notably, these 3 benefits are very similar to the challenges faced by Australian Local Government agencies. The stated 3 key benefits of the CALUMO Local Government Performance Management Solutions" are as follows:
The following is a screen shot of one of NYC’s online performance reports:
Whilst I have several criticisms of how the CPR data is presented and ultimately therefore it's value to the end-user, I only want to point out two flaws in CPR, which are specifically claimed in the press release as benefits.
I have provided below an example of the equivalent CPR report from CALUMO Local Government Performance Management Solutions.
(click on image to enlarge)
CALUMO Local Government Performance Management Solutions deliver the functionality
Councils need to achieve their many internal planning and reporting objectives. It
delivers open and transparent reporting for improved governance and stakeholder management.
Thu, 22 Nov 2007 00:24:11 +0100
Please join us as our guest at the Microsoft Business Intelligence Summit in Melbourne on 28 November, or Sydney on 29 November. The focus of this complimentary one day event is to excite and educate high level delegates with solutions built on Microsoft’s comprehensive BI platform. One of the presentations, by Lea Munro of Queensland Rail, is a CALUMO user story titled “Forecasting & Reporting – How Queensland Rail have Extended the Microsoft BI Platform”. One of the greatest risks to effectively embedding any corporate BI system is the failure of IT and operations to connect, agree and move forward together. By choosing the Microsoft Platform and CALUMO, QLD Rail set out with the best possible start – an infrastructure that IT knew, understood and trusted; and an application layer that offered end users the depth and flexibility they need to both submit and extract the information they need. This approach has provided QLD Rail with a successful initial roll-out and the capability to scale rapidly across its enterprise. In this session Lea Munro discusses QLD Rail’s process for selection, the success of the initial roll-out, lessons learned and plans for the future. The Business Intelligence Summit delves into the technology and practical benefits behind Microsoft’s leading business intelligence products, and how to seamlessly integrate them within your organisation. It’s the first of its kind to be held in Australia. Click here to register.
Mon, 05 Nov 2007 22:43:24 +0100
Johann presented new data visualisation techniques using sparklines (aka in-cell charts or microcharts) and gave some examples of predictive analytics and data mining to extract opportunities from data. The CPA Congress is the biggest event for public sector and business professionals to discover insights for sustainable performance. Each year the CPA Congress attracts over 2,500 like-minded industry professionals and maximises professional development by offering over 80 sessions across a range of topics from high profile speakers www.cpaaustralia.com.au Click on the link to view/download the Exception Reporting presentation.
attached file: type: application/pdf size: 2.93 MB here Fri, 19 Oct 2007 07:40:45 +0200 What women want and other analytical questions Last night my wife showed me a spreadsheet where she's been recording her weight for the last 9 years (she herself admits to being a bit OCD). I saw a perfect application for CALUMO In-Cell Charting to present this data in an intensely meaningful way using a sparkline. She was so impressed when I showed her the chart and for once my need for analytics, proof & logic satisfied her need to be understood.
My Analysis
So why did I use an in-cell chart? Well, for one thing the chart above is effectively representing more than 3,000 data points (9 x 365). CALUMO In-Cell Charting provides an intelligent visual presentation of large amounts of meaningful data for identifying trends, comparing data and highlighting exceptions. Secondly, the chart display with the min/max, normal and closing looks deceptively simple – its actually not for the novice to achieve in standard spreadsheet packages. By combining charts and data together in a table, we easily achieve this and do away with the need to separately label axes and legends, or the need to associate the table data with the chart information. CALUMO In-Cell Charting (AKA Sparklines) provides Line, Axis, Bar, Bullet, Grid, Strip & Arrow charts. Imagine the application of this where a single page transforms and concentrates large amounts of corporate data into KPI's on a single page for rapid and effective review and analysis. Tue, 18 Sep 2007 07:13:21 +0200 One of the Six Most Promising Private Technology Ventures from Australia
Red Herring 100 Asia is an exclusive event honouring 100 cutting-edge private technology
companies from across the Asia-Pacific region. The event brings together an
elite roster of entrepreneurial and global venture investment firms to showcase excellence
in innovation.
About CALUMO Labs Pty Ltd Tue, 04 Sep 2007 08:07:01 +0200
SYDNEY, Australia, August 31, 2007 – At a gala function at the 2007 Microsoft Australia Partner Conference held at Hamilton Island, Microsoft awarded Calumo Labs Pty Ltd the Microsoft Partner of the Year Award in the category "Data Management Solutions, Database Management". The award recognises the partner that provides outstanding solutions in data warehousing and business intelligence. The winning partner’s solutions provide organizations with a competitive edge in performance reporting and business insight across the enterprise, leading to better and more timely business decisions. "The award is a testament to the depth of experience and innovation that Calumo Labs brings to customer solutions delivered on the Microsoft platform" said Christine Bishop, Product Marketing Manager SQL Server, Microsoft Australia. "Given the significant investments that Microsoft have recently made to make BI capabilities more accessible across the organization, partners such as Calumo Labs are vital to the future success of Microsoft and its customers." "We are delighted to have received this award from Microsoft” said Jeff Walter, Marketing Director, Calumo Labs. “It confirms our leadership position in delivering innovative BI solutions to clients using Microsoft technologies. For us, the award underlines the enormous opportunities for Business Intelligence delivered on the Microsoft platform and reflects the dedication, talent and professionalism of the entire Calumo Group team." Mr Walter also offered "Special thanks to the Microsoft Australia team for their ongoing support and willingness to always ‘go the extra mile’ for their partners."
Pictured: Jeff Walter holding the award and celebrating with Christine Bishop (Product Marketing Manager SQL Server) and Tony Mudie (ISV Business Solutions), Microsoft Australia.
About CALUMO Labs Pty Ltd (formerly SPF Pty Ltd)
Thu, 16 Aug 2007 06:30:59 +0200 One of the Most Promising Private Technology Ventures in Asia
Red Herring carefully selected the finalists based on criteria such as technology innovation, financials, business model, management team, customers and alliances. The 200 finalists are based in 16 countries/regions including China, India, Japan, Singapore, Korea, Australia and Vietnam. The names of the 200 companies short-listed as finalists for the "Red Herring 100 Asia 2007" can be found online at http://www.herringevents.com/asia07/redherring100.html "The 200 finalists we selected from across 16 countries and regions are all excellent contenders," said Joel Dreyfuss, Editor-in-Chief of Red Herring. "They are exceptional companies who thrive on innovation and strongly define the important role of technology in Asia’s economy and throughout the world."
About CALUMO Labs Pty Ltd
About Red Herring
Mon, 30 Jul 2007 08:12:29 +0200 Just for fun I created the AFL ladder below using CALUMO to illustrate two of our business intelligent in-cell charts. In the first column of the table, we're using a win/loss bar chart to show each team’s record for the 17 rounds of the 2007 AFL season. A blue bar represents a win, a red bar a loss and a blank bar a draw. With 16 teams and 17 rounds played, the bar chart effectively shows the visual equivalent of 272 data points, maximizing data density without compromising readability or ease of use.
Let's take a look at these results: Geelong took 5 rounds to warm up, but definitely seem to be on a winning roll now. Collingwood & Fremantle both seem to have a "win at home, loose away from home" problem. After winning six games straight, West Coast started paying the price for not being able to play their best football. CALUMO In-Cell Charts provide an intelligent visual way of presenting large amounts of meaningful data for identifying trends, comparing data and highlighting exceptions. In the last column of the table, we compare the percentage wins using a simple relative sized horizontal bar combined with numeric value percentage wins. By combining charts and data together in a table, we do away with the need to separately label axes and legends, or the need to associate the table data with the chart information. In order to achieve this, CALUMO Visualization Widgets provide in-cell charting for presentation class dashboards and charts. With the click of a mouse, CALUMO In-Cell Charting make the design of really compelling executive dashboards easy. Business Intelligence and Performance Management Home Tue, 08 May 2007 14:30:10 +0200 CALUMO has been chosen as one of five finalists in the "Applications and Infrastructure Tools" categories for the prestigious 2007 iAwards.
The Applications and Infrastructure Tools award is presented to the most innovative nomination for the development of applications and infrastructure tools. Any software program that operates hardware increases the efficiency of systems, measures and/or monitor systems usage and performance. Any software program that provides for data access/retrieval, data manipulation (eg.sort/merge), data management, data warehousing and program design/development. It includes all database management system (DBMS) software; decision-support and executive information system (EIS) programs; spreadsheet programs; front-end and back-end CASE tools; and emerging areas like cooperative processing and/or object management application development tools.
The iAwards finalists reflect the diversity of innovation across the Australian high-tech
community. The iAwards program recognises the need to celebrate the significant contributions
that ICT makes to the Australian economy. The Australian iAwards are an initiative of The Australian Information Industry Association (AIIA).
About AIIA The role of AIIA is to set the strategic direction of the ICT industry, influences public policy, engages industry stakeholders and provides member companies with business productivity tools, advisory services and market intelligence to accelerate their business growth. AIIA assists the ICT industry to meet its business objectives, both locally and globally.
Fri, 23 Feb 2007 05:50:27 +0100
– In
Part 1, I discussed the rise of Microsoft’s OLAP market share and how this benefited
us by educating the market on the benefits of business intelligence and what has become
Business Performance Management. Let me start by saying that in our view Microsoft’s entry with PerformancePoint is an important validation of the BPM market as a whole. For PerformancePoint, the immediate opportunity is to see how ProClarity has been combined with existing capability such as Business Scorecard Manager and other new capability to provide a framework for budgeting, forecasting, planning, and consolidation. In light of PerformancePoint and other developments, we will continue to embrace any new capability if we think there are components of the technology that make sense and add value for our customers. CALUMO is a certified member of the “Microsoft SQL Server Data Warehouse Alliance” and for a long time now we have leveraged elements of the Microsoft BI platform to deliver our BPM applications. We intend to continue to rely on this approach. What differentiates our offering is that we continue to offer significant application logic over and above the Microsoft platform. As I mentioned in my previous post, the market understands BI and BPM because of Microsoft’s reach, but often needs or wants a more sophisticated solution than is available through vanilla Microsoft. The OLAP Report has just released its annual OLAP Market Shares showing Microsoft's share increase by nearly 4% from 2005 to 31.6% for 2006. Tellingly the report also states that “Microsoft Analysis Services is typically chosen by smaller organizations”. CALUMO extends the reach to medium and large organizations with more advanced capability than would otherwise be satisfied by a non-Microsoft solution such as Hyperion, Cognos, or Business Objects. In our view, Microsoft sees the value of working closely in partnerships that can add value to their stack. An example of this is their Office Business Applications (OBA) initiative. Microsoft wants Partners to develop applications that integrate closely with Microsoft Office to front-end business applications. These OBA’s are important to Microsoft because they provide a way to get Office entrenched in businesses. By the way, OBAs are for use with Office 2007 only. With our extended Calumo OBA we take the program even further with extensive integration with Internet Explorer, SQL Server 2005 and support for older versions of Excel. Our technical partnership makes sense too. If you look at the BI/BPM landscape as a whole, it’s increasingly becoming a black and white choice between new technology solutions versus old technology solutions. CALUMO had a blank canvas technology wise and functionality wise. As a result, we don’t have any integration issues with multiple products or legacy code. Everything is .Net2.0 and SSAS. Technically therefore working closely with Microsoft is mutually beneficial. Originally it was only a question of an order of magnitude increase in performance between 2000 and 2005. Of late it’s been a best practice approach in database design and high-end business requirements. Our value-add over PerformancePoint includes operational analytics, predictive analytics, and depth and breadth across our applications. To try and be more specific regarding depth and breadth across applications, some of our features available through both Excel & the Web include:
Regarding our competitors, a significant differentiator is our ability to offer a complete BPM application on a single unified platform (no legacy code, no integration issues with multiple products). Our Excel Add-in is also very advanced including no less than 35 spreadsheet functions. We have given Excel a lot of thought and focus in development. This brings us to where we are today where we continue to forge ahead with our vision and believe that the Microsoft BPM Applications gap remains a significant opportunity. We continue to diligently draw upon our previous 10 years subject matter expertise to build sophisticated BPM applications. While we are doing this, the number of Calumo customers continues to grow.
Fri, 16 Feb 2007 13:55:23 +0100 Conditional Formatting for Maintenance Free Formatting & Presentation Shading alternate rows is a very common and easy way to make a table with multiple columns more readable. This is usually achieved in Excel by applying Format, Cells, Patterns, Color on alternate rows. So what's the problem? Well, if the table is then sorted, or rows are deleted or added the shading will be scrambled in the process.
Conditional formatting is great way to keep the desired shading without any effort.
This is achieved by using a =ROW()=EVEN(ROW()) formula as a conditional format across
the entire table as follows.
How does this work?
Therefore when these two formulae are combined in a “Formula Is” condition such as "=ROW()=EVEN(ROW())", if =ROW() is an even number, the formula returns True and applies the conditional format. if =ROW() is an odd number the formula returns False and the conditional format is not applied. We hope this tip makes things easier for you.
Fri, 09 Feb 2007 06:39:39 +0100 – In Part 1 last week, I discussed the rise of Microsoft’s OLAP market share and how this was beneficial by educating the market on the benefits of business intelligence and Business Performance Management (BPM). This week I discuss our decision to embrace Analysis Services including our research findings and the enormous opportunity we saw for BPM applications on Analysis Services 2005.. In 2003, we began a “from the ground up” development of our BPM application powered by Analysis Services 2005 (SSAS). Our product CALUMO is the result of these efforts. The development brief was to build a sophisticated BPM application at least equal to or better than what we had done in the past (SPF Plus on TM1 OLAP Server). It also had to be better than the solutions offered by our competitors (Cognos, Hyperion, Outlooksoft etc). A standout item of research that illustrates the opportunity we saw is the chart below which correlates OLAP Market shares (per the OLAP Report) against the BPM Applications market shares (per IDC).
Note that Hyperion has almost precisely the same OLAP and BPM market shares, yet Microsoft has nearly 30% OLAP market share, but only a trivial BPM share. This is an enormous gap of nearly 25%. Although there are other 3rd party players who leverage Analysis Services filling some of this gap (eg about 2% each from Outlooksoft and GEAC, plus others which were not tracked by IDC), our research showed that most of these customers needs were not being fulfilled. They were either:
We believed that providing for and filling the Microsoft BPM Applications gap was the most significant and neglected market opportunity at the time. For us, it has been about being first to market with the latest technology on Analysis Services 2005. It’s also about providing a more sophisticated application than Hyperion, Cognos and our other competitors on a unified platform. Software development is never easy, but our decisions and efforts so far have been more than vindicated:
Looking back, we achieved what we set out to do, but how do we continue on this path of judicious serendipity? In light of PerformancePoint and other Microsoft BI initiatives, we’re now even more excited about leveraging Microsoft technology and our ability to build software that could fill the 25% BPM applications gap. – In Part 3 next week, I will discuss our BPM vision and product roadmap and explain in some detail the CALUMO Microsoft Partnership where we’re embracing elements of their BI platform whilst applying our subject matter expertise to provide a more sophisticated and complete offering..
Mon, 05 Feb 2007 07:50:19 +0100 With the imminent release of Microsoft PerformancePoint, I have been asked several times how this will effect our vision for CALUMO and the impact it will have on the BI market generally. The best way to answer this question is to provide a bit of our history and consider Microsoft’s gradual entry into the market [the market being OLAP, Business Intelligence, and Business Performance Management]. One cannot just consider Microsoft’s play based on PerformancePoint alone. One must view Microsoft’s entry based a long history of software releases starting with Excel Pivot Tables, then OLAP Services for MS SQL, Analysis Services 2000, Data Analyzer, Analysis Services 2005, and now PerformancePoint (built out of ProClarity). We’ve been in the BI business since the early 90’s. It was around the time, Excel Pivot Tables were released by Microsoft. I remember the fear I felt when some analysts and prospects told us that our business could not survive Microsoft's entry into our space. The same thing happened when OLAP Services was released at the end of 1998 and again later when OLAP Services became Analysis Services 2000. Over the years I’ve watched in awe as Microsoft’s OLAP market share soared from nothing to nearly 30% in 2006. At the same time, our business also grew and has been very successful since those early years. So why do we think both businesses and others in the space have continued to prosper and grow? Well, as you can imagine we take understanding this pretty seriously. The key things we believe are:
So, rather than going out of business, we met more prospects who understood multi-dimensionality because of Microsoft, but who wanted more than Pivot Tables and Analysis Services 2000 could offer. Many of these organizations became our customers. Whilst it was a huge relief to still be in business, we were not naïve enough to think that Pivot tables and Analysis Services 2000 would not one day mature into significantly more complete and competitive offerings. Based on our research, we considered it significantly more likely that Analysis Services would mature as an OLAP engine before Pivot Tables was enhanced sufficiently to be considered a competitive BPM application. So, how do you take the successful components of a strong BI business not built on Microsoft and align and prosper with the Microsoft platform - once again, we spent many hours considering what our business needed to do to remain competitive and continue to delight our customers.
– In
Part 2 next week, I will discuss our decision to embrace Analysis Services including
our research findings at the time and the enormous opportunity we saw for BPM applications
on Analysis Services 2005...
Wed, 31 Jan 2007 23:57:52 +0100 Microsoft has published a 120 page Analysis Services 2005 Performance Guide. Major topics from the contents page include:
The guide is currently applicable to SQL Server Service Pack 2. We hope this is an indication that it will become a living document with further contributions and enhancements as SSAS 2005 evolves and further expert knowledge is acquired through research and practical experience. Congratulations to the authors and subject matter experts who contributed to this document. As Mosha Pasumansky (one of the contributing subject matter experts) says on his blog "This guide is a big deal, and anybody serious about Analysis Services 2005 should download it and read from end to end." Business Intelligence and Performance Management Home attached file: type: application/msword size: 1.97 MB here Fri, 26 Jan 2007 12:35:03 +0100 Good dashboard, graph and chart design is critical to getting the most out of your Business Intelligence software investment. Good visual communication of data enhances insights and provides rapid communication of information to decision makers. We have below an example of a poorly designed chart, followed by an analysis of the problems and our proposed alternative solution. The chart below forms part of a dashboard which formed part of a BPM application presentation we attended.
Our analysis of the problems with this chart:
Our Proposed Solution:
Note, there is nothing fancy about our solution, but it is simple and communicates clearly and effectively.
Thu, 16 Nov 2006 14:35:05 +0100 Alignment of objectives is the most important factor responsible for breakthrough business performance.
Source: BRW Magazine advertising campaign.
Examples of cultural barriers include departmental information silos, a lack of cross-departmental
knowledge sharing and resistance to change. A cultural shift is required for alignment
to occur. To effect
cultural change, the best chance of success requires a combination of C-level
sponsorship and the involvement of key departments (Operations, HR, IT and Finance).
Technology barriers centre on the difficulties of integrating multiple systems, as
well as the capability to deliver relevant and consistent information to each user across
all departments. Adopting technology offering a unified platform for consolidation,
reporting, analysis, budgeting and forecasting can significantly assist in the alignment
of business objectives for breakthrough business performance.
Fri, 10 Nov 2006 12:26:16 +0100 What is it about the Kalman filter that makes it attractive from a retailer’s point of view ? As mentioned in passing two weeks ago the original idea of the Kalman filter when applied to missiles and spacecraft was that as new information became available on the position, velocity and acceleration of the vehicle, the Kalman filter only needed to process the latest data. It was no longer necessary to have to reprocess all of the flight telemetry data recorded since launch to work out the position of the vehicle. The application of this approach to retail point-of-sale data means that rather than having to process 52 weeks of sales data each week, only the most recent data needs to be processed. A single initial pass through 52 weeks of data is enough to calculate the filter’s coefficients. The filter can then be updated by addition of only the most recent week’s sales data. If you are having to estimate millions of SKU locations this is going to be pretty important. As new data becomes available, updating of the filter can occur at a greater speed than calculating a moving average model. All the more so with the advent of 64-bit servers. This all well and good, but why go to all this extra trouble to calculate a stock model using a relatively complex method? The main driver of retail inventory levels is forecast accuracy. The stock you order today is the stock you have to live with tomorrow! From real-life retail experience, a Kalman filter estimate is often more accurate three weeks out than a moving average from only one week out. This translates to a 35% improvement in stock turns over a moving average model. If you get 3.5 turns from a moving average, you will get 4.7 turns from a Kalman filter. There are probably better things to spend money on than unnecessary inventory.
Wed, 08 Nov 2006 11:41:02 +0100 In our experience, it's always good to start a budgeting & forecasting project during a quiet part of the year. Get it in for a forecast month so that if the project end-date slips, go-live can be shifted a month with no major business disruption. It also gives you the benefit of a soft start on a non-critical forecast, where everyone gets used to the system and transitions smoothly into the budget when this rolls around. On the other hand, implementing only at budget time can lead to long hours for the project team and, because the project end date (budget start) can’t change, final testing is sometimes only completed during the budget process. A lot of companies start their Business Intelligence / Performance Management purchase cycle in the latter half of the year leading up to the budget cycle. The vendor selection process and contract signing often take longer than expected, leaving only a couple of months to spare before the system has to be scoped, implemented, tested, trained and rolled out. In other words, getting the system in and ready for budgeting immediately whatever stop-gaps this may include. The compromise is often the planned rolling forecast which takes the backburner for another day. A lot of momentum is lost as resources focus on the budget and other new projects demand attention. Unless the initiative is focused back on completing the rolling forecast capability, then, apart from reporting, the model sits in stasis until the next budget. Whichever approach you take, we'll be happy to work with you to get the job done on time and on budget, but we also like to think that with a bit of foresight, we can help you remove some stress and accelerate your ROI. Business Intelligence and Performance Management Home Fri, 03 Nov 2006 00:19:52 +0100 In business today graphs, charts and gauges often form an important part of measuring and presenting numbers. In our business, which revolves entirely around the presentation of business intelligence and performance management numbers, we see poorly designed graphs and charts on a daily basis. In order to illustrate (and hopefully prevent) some common design mistakes, we will provide some examples of poorly designed charts, followed by an analysis of the problems and our proposed alternative solution. The chart below forms part of a presentation we attended, described as “a fantastic presentation of graphics for more visual appeal.”
Our analysis of the problems with this chart:
Our Proposed Solution:
Business Intelligence and Performance Management Home Tue, 31 Oct 2006 01:38:12 +0100 CALUMO is a three syllable word pronounced Cal (as in the first syllable of calculate) + Lieu (as in “in lieu of” meaning “in place off “) + Mow (as in mow the lawn). CALUMO is derived from celeusma, a Greek word (but used also in Latin: ke>leuma) meaning the song, chant or command given by the chief oarsmen that gives power and rhythm to the rowers. In the same vane, CALUMO empowers people facilitating collaboration within an enterprise for unified business performance management. Some people have told us the name also sounds like calculate from “Cal”; numbers from “umo” derived from numero; and illuminate from “lumo”. All this is true and reflects a sense of what CALUMO is about, but most importantly we think that people using CALUMO are Business Intelligent.
Business Intelligence and Performance
Management home.
Fri, 27 Oct 2006 14:11:48 +0200 We read with great interest recently that Financial Consolidation Applications have reached the Plateau of Productivity on Gartner’s Hype Cycle for Business Intelligence & Corporate Performance Management. The Gartner Hype Cycle (see fig below) tries to make sense of different emerging technologies starting on the left hand side of the graph and typically travelling from left to right. Following their introduction, technologies can be subject to unrealistic hype bringing them to the “Peak of Inflated Expectations” only to fall into the “Trough of Disillusionment” once reality sets in, before emerging at the right hand side where they finally begin to deliver some of the benefits that were originally promised at the “Plateau of Productivity” (in many cases new technologies never progress far, due to failure along the way).
At CALUMO we provide a rich ecosystem of best-practice solutions based on our core product capabilities. Let’s look at the type of functionality commonly expected in Financial Consolidation Applications as they stand at the Plateau of Productivity.
At Calumo we offer a unified architecture for all our modules ranging from Financial Consolidation to BI, Planning and Operational performance management applications. All these are available through a familiar interface (Excel or Internet Explorer) offering the lowest total cost of ownership amongst BPM vendors today. Business Intelligence and Performance Management Home Fri, 20 Oct 2006 06:13:41 +0200 Last week we considered how techniques first used in NASA helped retailers plan their inventory. This week we are going to get behind the man and his thinking in a bit more detail.
Rudolf E. Kalman, a graduate research professor emeritus at the University of Florida
and ad personam chair at the Swiss Federal Institute of Technology in Zurich is considered
the most influential researcher in the field of control and systems theory. He is best known for the linear filtering technique that he developed in the years 1959-1961 to strip unwanted noise out of a stream of data. The Kalman filter is widely used in navigational and guidance systems, radar tracking, sonar ranging, and satellite orbit determination (as we saw last week at NASA for the Apollo and other missions, for instance), as well as in fields as diverse as seismic data processing, nuclear power plant instrumentation, and econometrics. The Kalman filter, which is based on the use of state-space techniques and recursive algorithms, revolutionized the field of estimation and forecasting and while some of these concepts were also encountered in other contexts, such as optimal control theory, it was Kalman who recognized the central role that they play in systems analysis. During the 1970s Kalman also played a major role in the introduction of algebraic and geometric techniques in the study of linear and nonlinear control systems. His work since the 1980s has focused on a system-theoretic approach to the foundations of statistics, econometric modeling, and identification as a natural complement to his earlier studies of minimality and realisability." In simple terms Kalman filtering addresses an age-old question: How do you get accurate information out of inaccurate data? More pressingly, How do you update a "best" estimate for the state of a system as new, but still inaccurate, data pour in? The Kalman filter applies a sophisticated algorithm designed to strip unwanted noise out of a stream of data. Strangely this “noise” could be as diverse as unusual inventory movements. As we saw it should come as no surprise that recently the Kalman filter has proven to have a major contribution to planning some lines of inventory allowing retailers to optimize their stocking levels and subsequently significantly reduce inventory. Not only is the filter able to remove the noise caused for example by a mother buying 12 pink shorts for her daughter’s netball team but is able to manage in an environment of large amounts of data. The pink short purchase is an aberration or noise and tends to disturb the normal pattern of sales. This purchase would lead to stock model inaccuracies from the typically unsophisticated planning methods currently deployed such as Moving Average. Kalman filtering also has a way to link the sales over time such that it effectively uses each new observation to update a probability distribution with no need ever to refer back to any earlier observations.
This has the interesting implication to planning in retail where there are typically
large data sets. Once the Kalman filter has been tuned with some initial data it does
no more work for the millionth estimate than it does for the first. The net result
is an algorithm tailored to applications, where data keeps coming in and decisions
have to be made quickly. I say, till next week, bring on the Summer and bring on the shorts! Business Intelligence and Performance Management Home Fri, 13 Oct 2006 08:32:40 +0200
Recently we had a holiday on the NSW Central Coast and needing a few bits and pieces
I ventured in to the local department store. Recent styles were “cheek by jowl” with Dickensian artefacts… clothes, crockery, string, stationary most anything you might need. A bit of a “one stop shop” and the price was right! It reminded me a bit of when I used to go shopping with my Mum 35 years ago at the discount food store with everything everywhere. Talk about retail aversion therapy! Being an engineer by background and more analytical than is good for me, I left the shop wondering if the store could survive as the overriding impression was that it had far too much stock. Simply and nostalgia aside, there seemed to be far too much money locked up in “them there” shelves. Surely there was a better way! Retailers are faced with the difficult problem of trying to match the stock they hold against customer demand in an environment of continual change, often driven by seasonal demand and fashion. The trick is to carry just enough stock so that each customer can find what they want when they want it so you don’t lose a selling opportunity but not so much stock that it sits on the shelf until it is disposed of in next years sale. One of the big issues is the “forest for the trees” problem. The buying habits of customers are diverse as they come in all shapes and sizes with different style and colour preferences. This means that there are an enormous number of combinations all being continually influenced by season and fashion. Retailers servicing multiple stores have this problem only magnified. With this amount of data it is easy to see how inventory managers have great difficulty seeing the “forest for the trees”. Faced with an economic and competitive landscape demanding tighter margins for survival it is imperative that only sufficient stock is held to satisfy customer demand. Retailers can no longer afford to make their decisions at the class or category level. Just because there is a run on jeans in one locale it doesn’t mean that the size 12, female stonewashed is moving in all stores or at all. In the world of retail, of stores and SKUs, there is a well known maxim “Retail is Detail” and we all know that the “devil is in the detail”. Size 12, female stonewashed jeans may not have been sold last week but if buyers are planning at the total jeans level this will not be visible leading to wrong buying decisions and sub optimal stocking levels. Thankfully the ever increasing power of computers and the application of NASA inspired techniques with fast and easy methods for seeing the data are making the buyer’s job easier and more accurate. The power of the latest computers is making it possible to plan at the SKU store intersection and spot trends at the lowest level but this is still overwhelming from a inventory buying perspective. To overcome this automated buying techniques are deployed based on optimal stock models. Algorithms that review the sales trends determine what the optimal stocking levels are for each SKU in each store and an inventory order is raised on this basis.
All automation algorithms are not equal and some are clearly better than others in
predicting future sales. At its simplest level the buying decision may be to replace
the inventory from sales from the previous week. The difficulty with this approach
is that it does not take into account the amount of stock on the shelf in the store,
the changes in seasons, population demographics and fashions or unusual purchases. But how is it possible to forecast the correct stock levels when seasonal, fashion and unusual events are occurring? Over the years different techniques have been used such as Moving Average and Replacement but none of these do a good job in sorting out the “noise” from the “one off” exceptional sales like the pink shorts for the team or the cyclic run on pencils and pads prior to the return to school.
This is where a NASA mathematician comes to an unexpected rescue. Rudolf Kalman observed
that he could apply his linear filtering technique that strips unwanted noise out
of a streams of data to the problem of trajectory estimation leading to its incorporation
in the Apollo navigation computer.
Through the correct application of these filters reductions in inventory of between
10% & 20% and improvements in stock turns of 10% are not uncommon. Shelf space
and dollars freed from over stocking can be refocussed towards more profitable and
faster moving items. So if next time you visit a store and everything is “just so” and you begin to yearn for the old cramped, nostalgic quaint experience that has “Gone with Gowings” remember NASA chose the stonewashed. Business Intelligence and Performance Management Home Fri, 13 Oct 2006 02:25:59 +0200 Recently we had a holiday on the NSW Central Coast and needing a few bits and pieces I ventured in to the local department store. The store was absolutely full of stuff! It reminded me a bit of when I used to go shopping with my Mum 35 years ago at the discount food store with everything everywhere. Talk about retail aversion therapy! Being in finance with an engineering background I tend to subject ideas to more analysis than a psychiatrist’s couch so I left the shop wondering if it could survive. The overriding impression was that it had far too much stock. Simply, there seemed to be far too much money locked up in “them there” shelves.
Surely there was a better way! I had an inkling that maybe it was the sort of question
that requires some serious science. Maybe NASA knows. Fri, 06 Oct 2006 07:53:36 +0200 Some terms go out of fashion as the technology becomes mainstream (eg OLAP), only to be replaced by new terms that better describe new capability expected and hopefully being delivered. One such term is BPM (Business
Performance Management) which I believe has recently been superseded by Performance
Management 2.0. Gartner's definition of these terms will be subtly different from
IDC's and finance sees things differently from IT. There is much room for overlap
and ambiguity.
For many years we used the words "Planning, Analysis, Reporting" as our company tag line to best describe what we did. Today we use "Business Intelligent" as our tag line, which is more esoteric and we hope more thought provoking as well. Here is what we think about and what best describes what we do now: Performance Management Applications o Business Intelligence + Reporting + Analysis o Planning + Budgeting + Forecasting + Modelling o Dashboards + Scorecards + Metrics o Financial Consolidation o Monitoring + Workflow + Notification * Vertical Applications o Retail, Telco, Banking, Construction o Consumer Goods, Freight and Transport o Government, Healthcare, Manufacturing and Industrial o Professional Services, Resources Utilities. * Horizontal Applications o Executive Management o Finance o IT o Sales o Marketing o Human Resources o Production & Logistics * OLAP * ETL Business Intelligence and Performance Management Home.
Fri, 29 Sep 2006 14:30:35 +0200 Gaining and Retaining the customers you want The telecommunication industry is currently undergoing major change with a business model that is moving away from voice connectivity to virtually every aspect of communications you can imagine. Customer intelligence is required to enable the business to focus on gaining and retaining the customers they really want. With the ease with which customers, looking for the best possible deal, are able move from one operator to the next, high customer churn rates are an ongoing problem. Telco’s must continually find new and effective ways to market products and services to new and existing customers in order to increase revenue, recover acquisition costs, and improve customer loyalty and retention. One of the best ways to do this is to maximize customer value through effective cross-selling and up-selling. Many Telco’s still struggle to do this, yet the customer data that would help identify good candidates for cross-sell and up-sell campaigns is often available somewhere in the enterprise, but not readily available for methodical and systematic analysis. Without a complete and clear analysis of customer preferences and behavior, effective customer profiling is impossible. Knowing the answers to questions such as "which customers subscribe to multiple services"? or "Which customers always upgrade to the newest equipment?" lets you profile and discover the attributes of similar customers who could be good candidates for cross-selling and up-selling campaigns. Cross-Sell and Up-Sell is only a part of a unified Telco business intelligence solution. Other components include:
Unified Telco business intelligence and analytics is only part of the solution. The next challenge is to architect these Telco specific components with scalable business intelligence and performance management technology, compromising data integrated from every source within the organization Any Telco able to do this can gain real value from their data and efforts - Gaining and Retaining the customers they want.
Business Intelligence and Performance Management home Fri, 22 Sep 2006 08:22:50 +0200 Quantifying business benefit of Business Performance Management is not trivial. As far back as ’92, Debone & Mclean established a framework for measuring Information System benefit. Their framework saw System Quality (performance, flexibility, ease of use, reliability, response time etc) and Information Quality (timeliness, relevance, usefulness etc) as determinants for System Use and User Satisfaction (see fig below).
How do these drive business benefit? Well, satisfied users easily finding the quality information they want in a BPM system can make great Individual Impact. Large groups of individuals working together create Organisational Impact. Let’s take a common BPM application - a retail planning and forecasting system.
In this case it’s been implemented well to user needs with high-uptime
that provides flexible what-if analysis from store planning to integrated corporate
reports, delivered through an easy-to-use web portal with real-time updates. The system
provides timely information from production systems and the flexibility allows the
end user to slice and dice from perspectives relevant to them. Bill, a store manager,
uses this system on a daily basis for reporting and analysis, while Sue, a regional
manager, forecasts the profit impact by substituting one brand with a cheaper version
sourced through the company’s own supply chain.
Useful stuff, but how do we measure the organisation impact of this BPM system? One approach, adapted from academic work on ERP system benefit, is to use a Balance Scorecard. Originally developed by Kaplan & Norton, Balance Scorecards are used to measure organisational effectiveness from the activities the organisation engages in - rather than simple financial metrics. The Scorecard framework is useful as it allows us to take a quixotic ideal like organisational benefit and break this into impacts across financial, customer, internal and learning perspectives. By reviewing the impact across various organisational areas and processes, you start to see some cause and effect on the bottom line. In our retail planning example - from an internal business perspective - the faster (and more automated) information flows between Bill and Sue, the greater the collaboration and the more informed decision making can be. Transparent planning using numerically-based scenario analysis (rather than aerial extraction) with all historical forecasts instantly available improves learning as sales forecasts can be more accurately tracked. Ultimately, the customer receives benefit from lower priced goods – made possible through the accurate and useful information generated in what-if analysis by Sue. Hard numbers from soft concepts: The nice thing about Balance Scorecard is that from when it is first implemented and ultimately used well by the organisation, the system itself creates a ready before and after Polaroid (measurement of success). Of course you should have a fair idea of the type of benefits you expect before you start implementing even if you don’t have a comprehensive measurement tool in place to benchmark against. A well implemented BPM system will have a range of predicted benefits, but also holds great potential for unforeseen benefits as enhanced collaboration, flexibility and other soft benefits are explored by bright and motivated individuals throughout the organisation. Business Intelligence and Performance Management home. Fri, 15 Sep 2006 14:29:11 +0200 Automatic Meter Reading, or AMR, is the technology for automatically collecting data from energy metering devices (gas or electric) and transferring that data to a central database for billing and/or analyzing. This means that billing can be based on actual consumption rather than on an estimate based on previous consumption. It also eliminates the need for each meter to be visually read by a technician, thereby cutting personnel costs. Advanced Metering Infrastructure, or AMI, is technology to capture additional data. This can include detection of technical events such as leaks, or reverse flow (reducing the chance of power emergencies and blackouts), but AMI is also used to collect time of use data that can be used for energy use profiling, time of use billing, demand forecasting, rate of flow recording, flow monitoring, etc. EnergyAustralia call this PowerSmart which they (and others) are progressively implementing throughout their electricity networks. With traditional "flat" pricing, the price you pay for electricity is the same, no matter what time of day or night you use it (with the exception of customers who have special off peak meters and rates, usually for hot water). With PowerSmart, your electricity rates are broken down into three different time periods - Peak, Shoulder and Off Peak. This means you pay for how much electricity you use, based on when you use it. A higher rate is charged during the Peak period, than the Shoulder and Off Peak periods. So your rate is less when the demand for electricity is lower, and more when it is higher. This means you have greater control over your electricity bill. AMI makes it easier for you to keep track of your energy usage which can help you reduce your energy costs and you are provided with an incentive to reduce your energy usage. Apart from the consumer benefits, AMR and AMI technology is also a completely new source of data for energy retailers to analyse. They could gain unprecedented insight into demand and usage patterns, which could in turn provide enormous business benefits. For example, the wholesale electricity market is typically characterised by relatively tight supply with huge discrepancies between pre-purchased and real-time prices and the absence of a predictable short-term (e.g., hour-ahead or day-ahead) forward market. With the benefit of AMR and AMI analytics, markets will mature and get more competitive, the level of discrepancy between pre-purchased and real-time prices will narrow and become more sophisticated. Large wholesale customers, who are also retail suppliers therefore have the best opportunity to exploit and respond to short-term demand. With their new found AMR and AMI analytics, their ability to respond within one hour, or even five minutes with favourable prices highlights the significant opportunity for large, sophisticated customers that will support wholesale market timing and pricing. These benefits however are only available to those who can overcome the enormous data management and analytics challenges. Business Intelligence and Performance Management home. Fri, 08 Sep 2006 10:18:09 +0200 For Retailers, the ever increasing diversity and fragmentation of consumer demographics requires that they analyse customer data at a very detailed, granular-level. They need rigorous timely processes to respond to demand signals and segment customers in a way that's superior to their competition. By properly aggregating and analyzing retail transactions, that would otherwise offer little insight into the business, data can be transformed into actionable information that can increase sales and profitability, provide competitive advantage and deepen customer and vendor loyalty. The availability of sophisticated (transactional) data poses the challenge to find a way to effectively harness and leverage massive volumes of data. SQL Server 2005 provides a platform for enterprise-class performance and scalability for analytical number crunching of this nature. Even for writeback, Microsoft claim enhancements to data writeback include a ten-fold performance improvement. With the advent of X64 Servers, these solutions are now even more affordable. To find out more, about our retail capability, please visit our retail solutions page. Business Intelligence and Performance Management home. Fri, 01 Sep 2006 14:08:22 +0200
We are often
asked to explain what BPM is
and why it is so important compared to a non-integrated, non-unified approach to business
intelligence, reporting, analytics, planning etc.
It struck me on seeing the image of the flock of birds below, that one way to answer this was to use pictures. As they say, a picture paints a thousand words.
The point of all the images that we’ve chosen is that patterns and meanings can be found and relationships and collaborations possible within the whole.
Nature, fractals, tessellations and origami are all fine illustrations of order out of apparent chaos. And so to with BPM, an organisation can gain greater insights through the observation of structures, relationships and patterns of the whole enterprise.
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