1. Most companies will change their over-reliance in the setting up of servers to host their businesses in a bid to reach their clients. This move will lead to many IT companies that earn most of their money from web hosting activities changing their business strategies if they are to avoid the possibility of being eliminated from the value chain. The IT personnel in many companies may be affected with most of their duties being outsourced or transformed into new roles.
2. With the introduction of cloud computing, many companies are likely to change their perception of the internet merely as a means of communication. This could lead to a number of businesses embracing the internet as a deliberate medium of service delivery; the online economy is likely to grow at a much faster rate as compared to the earlier rate.
3. The other trend that is rapidly taking shape with the growth of cloud computing is low-cost of computer services. Hither to the introduction of cloud computing, software companies were able to sell their software and other applications such as operating systems to a very large number of clients. Cloud computing has however made it possible to share software, applications and hardware to a larger client base from one single source. This makes it cheaper for the consumer to access services. The maintenance cost of computing systems will drop drastically and many more people will be online. Such a move is likely to see an increment of online businesses as it will cost less to host your store online. The buyers will also find it cheaper to buy products and services if the reduced cost of doing business is passed down to them.
4. However, there is a little bit of tussle going on – what cloud computing exactly means. Please read the interesting article below.
5. http://online.wsj.com/article/SB123802623665542725.html

• Can creativity and innovation be developed, or is it inherent in man? Galileo said, “You cannot teach a man anything; you can only help him find it within himself.” While creativity mostly comes out of the blues at the least expected times; innovation takes time and comes through a good working knowledge of the existing processes involved. We can promote workplace innovation by getting the employees to participate on projects, supporting and inspiring them to think outside the box and experiment and allowing them to transform.
• Give your employees all the room they need: Innovation is also developed by using visual aids and techniques, holding periodic meetings and healthy debates, encouraging questioning, researching different industries for copying matching ideas and allowing employees to think out loud and sleep on fresh ideas. Before a meeting, the participants could be asked to submit ideas in anonymity; where a vote would be taken, again in anonymity. After a discussion of the pros and cons of the best ideas voted in by the participants, some tactical as well as strategic ideas could be taken up for immediate implementation. Winning ideas may be rewarded including a special award for the best idea of the year.
• Give innovation a try and be quick at it: Create a free atmosphere where every encouragement is provided for generation of new ideas with no restraints. Include everyone and not a selected few. Innovation requires continuous support and encouragement for all.
• Leaders should refrain from ridiculing any new ideas proposed by employees, however inappropriate they may appear to be. Never discard them wholesale; but store them in an “inventory of ideas” for possible reconsideration at a different time and possibly for a different process, product or purpose. If people are allowed to become cautious through the management’s outright rejection of their ideas, that could be a stumbling block for further innovations to flow freely.
• If employees are too cautious and unwilling to come up with innovative ideas openly for fear of being ridiculed, have a system in place for employees to drop their ideas in anonymity into an “improvement suggestions” box or by filling a form via the organization’s website. In either case, they should be asked to use a secret password for subsequent identification, reward and recognition in case a proposal is accepted as an innovation for implementation.
• Innovations should always be rewarded by due recognition and publicity within the organization. All innovations may be recorded and held decorated in a “Hall of Fame”. Rewards need not be substantial. Monetary rewards could cause conflicts and frustration among innovators due to difficulties in assessing the extent of cash reward for a given innovation. Purpose of reward should be to motivate employees to come up with more innovative ideas. Recognition by the management and fellow workers would work wonders for their ego and morale.
• Even if an idea is not accepted for implementation, show respect and gratitude to the employee concerned; and discuss with him or her how the idea may be modified or improved upon.
• Studies indicate that around 80% of innovations happen unintentionally and through mistakes. In the bestseller “Built to Last” the co-authors Jim Collins and Jerry I. Porras discuss some accidents that paved the way for major innovations as not being mere ordinary accidents, but  “purposeful accidents” set in motion by the tremendous encouragement given by those visionary companies for experimentation, opportunism and trial and error methods as opposed to immaculate strategic planning.
• Some examples of such accidental innovations discussed include Johnson & Johnson’s move into Consumer Products with the discovery of “Johnson’s Toilet and Baby Powder” and “Band-Aid”; the opportunistic step taken by Marriot into Airport Services from providing catering services in airports and inside airplanes, unintended entry of American Express into Financial and Travel Services and then on to Tourism and Travel with the introduction of their Travelers Check, how the simple designing of a small computer for adding power to its instrument product line led HP into entering the computer business without any prior planning. 3M had initially badly failed in its mining business before stumbling on to a series of very successful innovations like now famous small household items like Post-it notes, Masking and Scotch tape etc. The authors go on to claim that these innovations were neither aberrations, nor due to random luck factors, but certainly due to “evolutionary progress” (unplanned progress) triggered by something bigger at work from within.
• Accept that mistakes will occur: Highly acclaimed “innovations” often fail subsequently due to various reasons. Every failure affords an opportunity to learn new lessons for future guidance. Ironically, failures and innovations very often go together. Failures give birth to new ideas that then sometimes emerge far stronger than the original failed innovation. You have to risk failure if you need to innovate so as to succeed consequentially. Take the story of Ayrton Senna, the Brazilian GP F1 driver and 3 times world champion prior to his accidental death in 1994. In a related documentary, a F1 expert answering a question as to what made Senna such an outstanding driver, said that Senna knew no fears to commit mistakes and that he collected so many mistakes in the early years of his career itself from which he learnt a lot to keep far ahead of all other drivers.
• Take small steps: Innovations should be introduced in stages wherever possible for easy identification of its most critical phases. This makes it easier to take appropriate controlled measures, and preventive or remedial action. The alternative to “repairing” an innovation is its abandonment in entirety as a complete failure.
• Criticism of an intended innovation by workers could pose problems for its smooth implementation. Leaders may probe 5 times (technique developed by Sakichi Tayoda) before presenting a change; and then clearly define the problem areas observed. Offering a range of probable solutions simultaneously would stop empty criticisms of the intended innovation and make the employees concentrate on evaluating the possible solutions instead.

Before we embark on a discussion on this subject, let’s first try to discern between innovation and creativity.

• In the words of Einstein, “Creativity is seeing what others see and thinking what no one else has thought”. Theodore Levitt coined innovation also into the equation, and said, “Creativity is thinking up new things. Innovation is doing new things.” Innovation cannot exist in the absence of creativity. However, creativity may sometimes not be practically proved until innovated. Invention can fit in between creativity and innovation.
• Henry Ford said, “If you think you can do a thing or think you can’t do a thing, you’re right.” One deterrent for business growth is the difficulty of getting the executive management to change.
• Innovation is facilitated by the creation of an innovative or proactive culture in an organization by its leadership. Having made a business proposal to a prospective customer, to wait for a response from that party is reactive; but a proactive business concern that takes the initiative by following up on the proposal would clinch the deal.
• A proactive culture is considerate and not restrictive. Significant breakthroughs have very often been achieved by being proactive. A proactive leader would be seen very often on the phone at office, home, or even when on the run. Such leaders would manage their email rather than letting their email manage them.
• Things unsaid at the correct time could mean lost opportunities. Some potentially brilliant ideas never come to be uttered, and therefore might never be heard.
• The famous saying that “Failures are the pillars of success” is applicable to every forward-looking organization. Dealing with failures comprises an important part of leading innovation. Statistical inferences gained from failures enable leaders to make well-informed decisions confidently with regard to future innovations.
• Failures could at times lead to accidental innovations for a different project, department, process, or even a different purpose. Some real-time examples of such serendipity are smallpox vaccine, Teflon and “Post-it” notes which was the outcome of a 3M misadventure on making a certain glue. 3M was latterly taking a “try a lot of stuff and keep what works” approach. On the flip side we find Norton, a company 10 times the size of 3M at one time, but cumbered with its centralized, bureaucratic and stagnant approach. Norton explicitly discouraged entrepreneurship, creativity and looking outwards for new opportunities beyond its traditional businesses. They emphasized too much on planning from the top down. Norton eventually did try to innovate and expand with acquisitions, but their turnaround in approach to innovation came too late. Norton was acquired on its way down in the nineties.
• A long-term vision is essential with timely responses to changing markets. Having and maintaining an innovative leadership position amounts to continuous innovation.
• It is only when you maintain a culture of innovation, or have a vision of attainable possibilities, that you would realize what you have missed, or what you are missing; despite little innovation.
• Poor management makes employees spend more time discussing about their weak hierarchy than on doing their work.
• People in trenches are not necessarily simply doers. What is more important is their close involvement with daily operations and customer contacts. It is something that leaders should take good note of. When working in trenches, leaders should be focused on the big picture. When there are issues to reckon with, what should be aimed at is not simply resolving the symptoms and moving on, but resolving their root causes. Root cause analysis sometimes leads to innovating new products or processes. Of course, failure to appropriately deal with the root causes could leave you with the dilemma of a continuous maintenance nightmare.
• Capturing customer interactions with a product and analyzing its pain points can lead to innovations for making it a better product.
• Creativity could spring from the most unexpected sources at the most unexpected times. A good leader never laughs at creative ideas. Do not ignore “smalltime ideas” like improving a process time by a few seconds or marginally reducing stationery costs. These simple items in virtue of their repetitive nature could contribute more towards reducing ultimate overall costs than rare single items of high value.
• Further, competitors will be fast to copy how you handle your big items whereas how you handle your small items might go unnoticed. Thus, handling your small items well could gain you a comparative advantage over your competitors. One meticulously planned innovation could set off a train of similar or connected innovations. Leaders should try to adopt the US cold war domino theory to advantage for business innovations too. Scholidice Hospital in Canada specializing in Hernia Operations concentrated on a small item like reducing the bed occupancy time of patients. This innovation led to many other innovations like having no TVs in rooms, less laundry, surgeons trying to make their patients walk as soon as possible after surgery, which in turn motivates patients to feel better. All this made this hospital outstanding in its field as to make a niche for itself.  Other hospitals trying hard to copy and adopt these measures have not met with much success.
• Copying gives you the advantage of knowing all the pitfalls in advance; a disadvantage is that you will never be the first in the market.
• Having a capacity to listen and to be honest and spontaneous in one’s appreciation and encouragement paves the way for continuous innovation. An alert leader with the vision and wisdom to see its significance could transform even a seemingly minor complaint by an employee into an innovation.
• Showing appreciation for workers’ ideas could transform their attitudes from one of detachment and frustration to one of active participation, involvement with a sense of fulfillment.
• Have a system in place capable of extracting and converting basic ideas to strategic advantage. The system should be well supported with policies and procedures, structure, culture, budgets, skills and rewards. Some firms have similar systems for project performance appraisals too.

Summing up, the benefits of innovation could be broadly stated as staying ahead of the competition, getting a broader perspective of all relevant issues, motivating others to do your bidding while giving of their best; that could also lead to reducing labor turnover.

Technorati Tags: creativity, critical thinking, innovation

• Non-access to Actual Users:

You should have continuous contact with the main users of your application. Keep in mind that they are the business analysts of your organization who are in daily use of your application. They should be encouraged to have faith and contribute to your project requirements. If they cannot be made to accept the project through conviction and direct contribution, no amount of further training will. Crisp requirements gathering and taking time to explain the requirements back to users should be an essential feature of a successful BI implementation program.

• Lack of Audit Controls:

A rather common pitfall is that many BI Project Leaders carry the misconception that audits and controls are not necessary where the projects are not of an “operational” nature. This is a grave mistake that drives out your audience especially in the absence of a guarantee that your numbers are matched with those in the original. What actually needs to be done is to show that your environment can be relied upon as much as an operational one. In cases where the numbers do not match (as they invariably will), audit trails and statistics could be produced to reconcile and explain those differences.

• Lack of Confidence in Data Quality:

Another very common pitfall of a BI project is its inability to sustain the confidence of the business community over the quality of data for decision-making. Obviously they would insist that it should be of the highest possible quality and expect even a higher quality than with regard to data in an operational environment. Devising and employing appropriate metrics for the measurement of data being sent out to your warehouses and marts would be the solution to restore their lost confidence and win them back over to you. I cannot emphasize more; GIGO (garbage in, garbage out) is of relevance here. Good decisions cannot be made from bad data. This has very often been a primary cause for breeding distrust that has eventually led to the abandonment of many projects. The lack of clear statements of success criteria along with a lack of ways to measure program success have led to perceptions of failure. Limited knowledge on technology, architecture and underestimating the need of quality information will certainly lead eventually to project failures. This will lead to decreasing trust of users on the information and there will not be any decisions made using that info. This is a big blow to BI. In such situations, having ‘data stewards’ and some data-cleaning tool in place is well worth the cost and effort.

• Under/Over Investment in a BI Program:

Under-investment in developing BI and data warehousing core competencies can eventually lead to a BI failure. Conversely, BI investments are wasted unless they are related to specific business goals, analyses, decisions, and actions that result in improved performance. For instance, it is commonplace for BI vendor value propositions to stress on business benefits such as responsiveness, agility, customer intimacy, flexibility, information sharing, and collaboration. But investing in a Business Intelligence Implementation to achieve such business benefits may in actual fact destroy the business value unless those properties can be defined in operational terms and realized through business processes that affect costs or revenues. For example, unless a $3 million investment in a BI application results in an incremental cash flow (after-tax) of at least $3 million; the organization will suffer a decrease in assets.

• Absence of a Mentality of “Application Reusing”:

In this particular business, hardly anybody builds just a solitary BI application; rather an entire environment to facilitate the decision-making process by diverse business users. This means building multiple applications, while making every new application an extension or an improvement over the immediately preceding one. These projects must be capable of being easily coordinated and for projecting a concept of reusability. This necessitates that you incorporate a program management function to fund the projects on a priority basis. This would in turn involve the creation of data models, project plans and reusable templates that need to comply with set program procedures and standards. Non-reuse of information leads to duplication of costs and efforts.

• Absence of an appropriate Architecture:

Creation of multiple projects should only proceed with a supportive architecture. It would be your Roadmap too for the determination of how and to what extent each project fits into your overall BI strategy; and their respective contributions to the environment. No supporting architecture means just the presence of some random databases that would only succeed in creating chaos in the entire reporting process. There could be multiple versions of architecture that meet different organizational needs. You may create your own to best suit your particular needs. The Corporate Information Factory is a good model emulated by many organizations.

Here are further causes in brief that led to BI implementation failures in real time:

• Although general principles of systems development do apply to BI implementations, the amorphous understanding of what BI methods and products could do result in absence of a proper value proposition on behalf of the business sponsor.
• The scope of the project was not fully understood causing delays in delivering to the business sponsor.
• Poor understanding of technology infrastructure leading to poor planning and scheduling.
• Adherence to long project cycles instead of short crisp agile projects.
• Excluding negative stakeholders that lead to political controversies.
• Ignoring project management rules.
• Inadequacy of articulating an organization’s results expectations.
• Failure to Set Appropriate Expectations and Metrics on features, performance, quality, availability, security and accessibility. For instance metrics for availability could be uptime, downtime, or MTBF.
• It is not simply creating information but utilizing it in decision making and incorporating the benefits back into ROI calculations that should be targeted. This is where most companies lag behind. Once BI is in place, there is no review of the benefits at later stages of the BI life cycle.
• Building a team that is weak and devoid of appropriate mix of skills.
• Incorrect integration of data.
• Misalignment between business strategies, core business processes that drive performance, and the BI program or initiative.

It is hoped that the above stated common factors and pitfalls known to be very often associated with business implementation program failures will act as a forewarning to stop you in your tracks if you also seem to be treading a path to danger and breakdown.  Even if you do happen to fall, being forewarned should help cushion the fall and give you sufficient time to change direction and recover to revise the project and continue with it instead of abandoning it.

BI is all about the multiple functions of defining, collecting, analyzing, compiling and distributing the intelligence relating to products, suppliers, customers, competitors and many other aspects relevant to a particular organization depending on its own peculiar range of activities. Business Intelligence is derived from information. However, If the information cannot be used effectively for strategic decision-making by an organization, that information falls far short of BI expectations.

The management of an organization trying to lead it to success without being armed with tools of business intelligence is like a captain of a ship trying to navigate it without a compass and a rudder. Gathering business intelligence is an accepted business practice. It is not something unethical. It should not be confused with the illegal activities of business espionage. Knowing what your competitors are doing and the changes taking place in your industry are important for assessing your weaknesses and strengths and keeping a competitive edge over your rivals. This aspect embraces competitive intelligence, which is something that goes beyond the normal concept of analyzing competitors. It involves placing much greater emphasis on making an organization more competitive in relation to its broader environment inclusive of all its stakeholders. The stakeholders of course comprise shareholders, customers, suppliers, technologies, distributors, macro economic data, the competitors themselves etc.

Changing consumer trends and patterns for your product/s due to the availability of cheaper substitutes put out by competitors, state of the economy etc.; and introduction of advanced technologies that make today’s techniques obsolete overnight are few examples of significant changes taking place within a business environment. Some of the sources of BI to be derived through IT are the internet, newspapers (especially Business Week, Wall Street Journal and Fortune), radio, TV and your own suppliers and customers in addition to other primary and secondary sources like trade exhibitions, trade conferences, forums, blogs, market research, financial reports, statistical databases, information centers, libraries, online advertising, subscription databases, news aggregation services etc.

You will not find a company’s strength in BI quantified in an organization’s balance sheet; neither is it taken into reckoning in any of the accounting ratios calculated for ascertaining the worth and status of a business. Nevertheless, it exists in every organization although at different levels of effectiveness. It is something comparable to Goodwill for its hidden nature, but far more versatile and far-reaching in its implications. It is an intangible asset that should be there at the core of every business enterprise. BI should form the basis or foundation for all strategic decision making in an organization. When an ideal BI environment exists within an organization, it should be a catalyst for effecting changes incorporating the latest trends with business acumen. The knowledge of the strength one’s BI system as a whole would enable one to forge ahead with the planned change with absolute confidence. For example, before we try to assess what our most profitable production centers are, we must be able to articulate the difference between profitable, more profitable and most profitable centers.

Business intelligence was split broadly into four categories by practitioner Estelle Metayer. They are, namely Strategic (concerned with the long term), Tactical (short terms implications), Adhoc and Continuous. Some companies depend on purchased BI software for the bulk of their business intelligence requirements while most organizations employ analysts to work on computers and databases in formulating their own BI methodology to fit in with their respective requirements. They create the necessary Key Performance Indicators (KPI) more popularly with Goal Alignment, Baseline and Metrics related Queries.

Goal Alignment Queries examine your goals and at what areas they are specifically directed at, such as a higher rate of profit per unit, an enhanced segment of the market share, increasing your customer base, finding alternative suppliers and sub contractors (if any), launching an entirely new income stream etc.

Baseline Queries are concerned with your current methodology and approach to gathering and integrating data, detection of their weaknesses and strengths. They help determine which specific tools are performing well, the weaklings, the ones that need tweaking and also what tools could be added to further enhance performance.

Metrics Related Queries are among the most important within a system of BI. Data that cannot be properly measured and quantified is of no value to any business entity. These queries try to identify areas where proper measurements are not being made with a view to finding solutions to their accurate measurement so as to be useful for BI purposes. Properly measurable data, facilitate their easy and accurate analysis to determine what work for the organization what do not.

Some advantages of BI:

• With the right type of business intelligence, you can avoid unpleasant surprises by anticipating the possible moves by your competitors. You can also minimize the time you would need to respond effectively in the event of a competitor gaining some ground over you.
• For example, major airlines use BI for planning their own strategies for pricing, marketing and production. As a result, they are able to counteract dog eat dog tactics adopted by their competitors, by responding with revised fares for different routes; sometimes on a daily basis.
• Advance detection of risks, opportunities and other market conditions. This is also called the Early Signal Analysis (ESA).
• Maximizing profitability and minimizing costs.
• Improved Customer Relationship Management (CRM).
• If you were to ask a Company CEO where his company would be in 3 years from now, the level of accuracy to which the CEO is capable of making a realistic prediction depends on the strength of the business intelligence in the possession of the company and how well they are applying their available BI for strategic planning and decision making.

The detailed reasons for such implementation failures are many and varied; but broadly, common pitfalls could be easily identified as to why BI project implementations fail so often for many organizations. It is our intention to look into some of the most common core factors that account for such failures and pitfalls. It is hoped that an understanding of the key factors and an awareness of the potential pitfalls would help you to avoid them or at least mitigate their adverse effects if you happen to be confronted with any of these issues in real-time.

• Lacking in Upfront Planning:

The beginning and end of the success of any business intelligence implementation program lies with the end user. Before you commit on a program, carefully assess why you need one and if the needs of the organization justify having one, align BI strategically with your business requirements and problem areas. Don’t make the mistake of designing a program for a handful of power users. Make it available and appealing to the average and below average users that form the vast majority of those needed to make the program a success. The requirements for power users can follow once the majority is happy with what has been prepared for them. Other probable areas of inadequate upfront planning can be cited as (a) Insufficient recognition by IT management that BI needs to be managed differently than transactional systems, (b) Insufficient leadership to drive changes to how the company uses information and analytical tools to drive results, (c) Weak business sponsorship and lack of accountability for the BI program or initiative, (d)  Lack of clarity on how BI will be used by the business to improve profits.

• Customization Overkill:

Contrary to popular expectations, too much customization of vendor applications to accommodate needs of too many individuals only tend to increase costs rather than usability. The increased consultations necessitated add to costs and make the project take a longer time to build. Later, more people will be needed to support and maintain the application.

• Incorrect Choice of Technology:

The chosen technology may not be supporting the requirements: specifically information access, presentation, automation and analysis. A classic case I have seen is the use of adhoc reporting tools for drill down financial reporting instead of OLAP. Some adhoc reporting tools cannot embed intelligence (for instance assets are shown as positive and liabilities as negative in the reports).  They miserably fail in “drill down” and “signage”.

• RAC Test:

This is a very useful and revealing fundamental Self Test. Take it and pass it before you get concerned with more advanced aspects.

R  =  Relevance

A  =  Accuracy

C  =  Consistency

T  =  Timely

Unless you pass well in all of the above tests, you might as well forget about the project. All the indications are that it will be a failure!

• Inadequate Training for whom it is needed:

Many organizations make the mistake of throwing their weight on an ambitious BI implementation program without giving adequate training for the essential users. When things start going wrong as a result of the untrained personnel using the tools incorrectly in a haphazard fashion, the company has to incur high costs on undoing the procedures made by the untrained users for using the tools. Before deploying the technology, the organization should ensure that the absolutely essential users are adequately trained instead of training all inadequately. Insufficient technical training prevents developers from getting software products to do what the vendors guarantee them to do.

• Non-involvement of Executive Leaders:

Implementation of a BI program means you are introducing a change to the organization. You should choose some executives with known leadership qualities to collaborate with different cultural and organizational groups and smoothen the changeover. Many employees resist change, refuse to cooperate or even turn hostile. The BI implementation should be preceded with a plausible explanation of the need for it, together with a list of benefits to be derived by the organization as well as the employees with clearly defined metrics for their measurement and preferably with an attractive but workable incentive scheme for those who will play ball. BI is an iterative process. It has no place for cubes that can only interlock into a predetermined dimension, and a defined set of measures and aggregations. It should be appreciated that within 12 months of a pilot BI project implementation, the very requirements and needs that led to its inauguration would have vastly changed beyond recognition. As past information and procedures become commonplace with the advent of new users with their new requirements, inevitably it gives way to new challenges and new horizons. That’s why they say, “We are never done with a BI system!”

• Poor Communications with Consultants:

Ensure that you and your BI consultants have a perfect understanding and agreement on all key issues such as each other’s roles, responsibilities, time frames and costs. Potential problems that could arise as a result later on and trying to find solutions after the damage has been already done could be prevented with a little foresight in having a project scope document incorporating all the aforesaid issues prepared and agreed on by the parties concerned in advance.

• When Perceived Needs differ:

It would be practically impossible to cater to a request like “we all need a single version” since it presumes agreement among all with regard to even matters like turnover, sales andd revenue. This is a typical situation where the cost and time involvement could be very high and would need very careful assessment. Even different social / cultural needs within an organization could be significant enough to spell disaster to the implementation of an ambitious BI program.