Video: What Makes a Good Business Analyst?

Thanks to all the Caribou readers who provided feedback on my inaugural video blog! In my second I discuss common traits and characteristics all savvy and experienced BA's employ regardless of technology.

On another note this video blogging thing is pretty cool, I recommend other bloggers give it a try if you've got time.

Follow Through

I make it a point to touch base with execs from previous projects to get a feel for how the processes, requirements and systems work I did is serving them from a pure business perspective (i.e. material costs reductions, productivity gains, error rates, etc).

Friday I received very positive feedback from my last project, specifically around the approach, execution and lasting results that seem to be serving the client well. As such I'm planning on doing a video blog on my approach to business analysis sometime next week. It will center on the following three aspects of my approach:

1. Effective Communication with the Business
2. Understanding the business case/business drivers
3. Execution and Facilitation

Until then check out this requirements blog post over at Canidium. They did a pretty good 5 part series on requirements gathering that included common themes such as talking to the right people, managing scope and appropriately raising issues.

Process and Productivity

Here's a deck I put together on 3 common misconceptions about process and productivity analysis vis-a-vis SPM integration.

Process and Productivity

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Management Consulting

If you haven't checked out Slideshare I recommend you do it. It's a pretty cool (but simple) app that lets you upload presentations and share while maintaining control. Kind of like a youtube for business.

Anyways here's a presentation I put together on management consulting. I injected humor and tried to keep it light...please don't hold that against me!

More On:
Slideshare

Mgmt Consulting

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2 great Austin based SPM BI lead roles

I thought that I would share a couple of great opportunities for any Sr. Sales Performance Management Business Intelligence developers looking for work in Austin, TX



St. Jude Medical – Information Delivery Manager



Callidus – Director of Analytics


These aren’t positions that I am filling, so you will need to go ahead and follow up directly with the companies to apply using the links above. That said, feel free to email me if you have any questions.

Decision Trees for Project Mgmt

After much talk I finally decided to jump into the video blog business. Check out my first entry where I discuss the benefits of using a decision tree in intra-project decision making.

More On:
Decision Trees
Blogging Heads



I attempted to keep it under 5 minutes, but it appears brevity isn't my strong suit.

Are You a Process Guy (or Girl)?

Today everyone is billing themselves as business process experts. Integrationist, technologist, testers, developers, it doesn't matter, they're all claiming business process expertise. When I first started consulting, my mentor and one of the leading process re-engineers in the industry told me "anyone skilled in visio claims to be a process re-engineer." And now as a fairly skilled and experienced process analyst I can say truer words were never spoken.

If I sound emotive on this topic it's because I am. A friend of mine recently recounted her companies experience with a 'process expert' assigned by the consultancy they were working with. Apparently the 'process expert' was really an Oracle Developer whose process experience was limited to diagramming step manuals into process flows..."truer words were never spoken."

In light of this gross misrepresentation which is liable to give all us process guys a bad name I've put together Kerek's Process Top Ten. This is a list of ten things your next process consultant should have. If they don't chances are they're a technologist masquerading as a process guy. For instance if they can't articulate and expound on the standard process matrix and major derivations they're probably not a process guy.

Kerek's Process Top Ten

1. Have process engagement experience outside of SPM.

2. Have multiple NONE integration/software engagement experience.

3. Understand the component pieces of productivity.

4. Understand how to determine process productivity.

5. Can articulate the difference between Level I, II and III.

6. Can articulate the difference between a process flow and relationship diagram.

7. Actively searches for mid and high hanging fruit.

8. Familiar with standard process matrix and derivatives.

9. Were trained in process analysis by a process guy or girl.

10. Have more process and business analysis experience than development experience.

S3 - The 3rd Part in um...err...a 3 Part Trilogy!

There I go again being silly. I had so many clients tell me I seemed so serious all of the time, I guess they didn't know the real me. Anyways here's the serious stuff on some things SaaS can do to better position themselves for sustained success.

1. Trace Your Roots - EIM SaaS firms should further examine their impact on the enterprise value tree. Simply taking the well worn operating capital path that on-demand has employed may not hold water in the current environ and even if it does it’s not something that is likely to get enough execs excited to the level needed to supplant on-premise. While the operating margin impact is tangible and shouldn’t be underplayed SaaS EIM should begin a methodical deep dive into deconstructing their client’s values trees and analyzing their impact on them. Analyzing and articulating the various levers your model and product touch, whether soft or hard, can go along way in establishing your value creation bona fides. Now most service providers and vendors have resigned themselves to the fact that they can only touch the cost lever, my thought on that is as long as their resigned to that fact it will remain as such.

2. Talk Up Implementation – SaaS EIM needs to highlight, with casework, its claim that it is easier to implement than on-premise. Easy and implementation are like oil and water and it’s a pavlovian response for me to search out all the unintended consequences for my clients whenever I hear vendors use those words in the same sentence. Putting together some quality case work (not the marketing fluff) that shows the market exactly how you quantify easier vis-à-vis on-premise and how that is clearly of value to the client is key. I highlight the latter part because so many shops today simply assume that clients get it! They don’t, that’s the whole point of your existence! And it’s your job as the vendor or service provider to make it both plain and relative. Just assuming that the market writ large will necessarily follow the hype regarding cloud computing or SaaS or ethanol or the hundreds of other ‘new way’ of doing things is a surefire way to marginality or failure.

3. Shore up Your Business Model – Now it’s totally empirical but methinks what is going on is that EIM SaaS firms are forcing their internal business case to work in order to gain market share. By that I mean they are purposely running negative gross and operating margins and cash flows, trading short term loss for long term critical mass at which point those margins turn positive. Most nascent firms do this to build business and again I wouldn’t be surprised if most EIM SaaS firms aren’t in the same boat. However, this assumes two things. First they are assuming that at critical mass they will be able to raise fees to price points that make them cash flow positive. Second they’re assuming that they will be able to internally control both front and back office costs as client loads grow. I’m not so sure about either. On the first point, SaaS’s model is built on a lower per unit costs whether that be on a transaction or payee basis what they are essentially saying is “outsource to us because it’s cheaper than doing it yourself.” Well there is a price point at which that argument no longer makes sense for the client or the SaaS firm. If in order to be cash flow positive your model needs to run at a price point that is antithetical to the services you offer to the market you find yourself in a conundrum. On the second point, I would imagine SaaS firms have growth plans in place, but naturally assuming you can keep your variable costs (on a per unit basis) the same and simply scale up is worrisome. Adding more clients and more front office and back office supports means more variance. More variance means greater costs, or at least the opportunity for. And greater costs mean higher price points (see above.)

How do they address this? I’m not sure. Like I said the challenges with running cash flow negative in order to attract new business are numerous and to be sure many more businesses have found their way to the graveyard through this model than to the black. Most firms are comfortable with a market clearing price that makes them cash flow positive and will only scale a predetermined percent after that, as to not jeopardize their model. From all of the world beating hype I get from most SaaS firms they are not in this class so they will have to figure this challenge out on their own, in the end it may be more luck than skill (i.e. new processing technologies cut costs.)

In closing out my three part series on SaaS I will echo once more that as model I definitely believe SaaS has potential, but so too does green energy, battery powered cars, cloud computing and that new widget you’ll hear about in Q3-2010. I would advise anyone pinning their hopes on like revolutions catapulting their individual business to the stratosphere to tap the brakes. The industrial, computing and internet revolutions happened because, writ large, the buyer’s marginal benefits far exceeded their marginal costs. That’s it. Seriously. So begin to show sustained and demonstrable benefit first, find a market clearing price that works and the revolution will take care of itself…sans hyperbole.

SaaS-afras: What am I missing?

There’s nothing to the title, other than a play on the soda. I’m in a particularly good (and silly) mood today because I was long and so was the market!

When we left off I was discussing the lack of concrete financial evidence to buttress the value claims emanating from all things SaaS. To recap I’m not against SaaS but I think it quite odd that the latest greatest delivery model, or so billed, is unable to make a clear value prop case v On-Premise.

In an effort to be proved wrong I did what any analyst would do. I talked to people smarter than me, infinitely in this specific case. I went straight to the top…of the corporate ladder that is. I engaged two executives, who I had worked with previously, and requested their input and analysis. Both were accommodating (thanks again guys) and provided definite and clear insight, but in the end it seemed their position mirrored mine. There were questions about the model and the value prop seemed to be a lot less “flashy” when you applied some rigor.

So if it in fact turns out that I’m really not missing anything, and the value prop vis-à-vis On-Demand is nominal at best than where does that leave us?

Webvan anyone.

I kid, but if you’re in the industry you must admit the excitement and bullishness surrounding SaaS have that same distinctive late 90's euphoric feel.

Next Week Part III – Resigned to the fact that I’ll never get my hands on hard data I throw on my strategy hat and outline 3 things SaaS should do to succeed and avoid being the next ethanol.

Is SaaS for real?

I’m a P&L guy. As such I like business argumentation rooted in demonstrable value creation, as do most clients and analysts. Contentions long on hyperbole and short on rationale tend to increase my skepticism and decrease my prospective excitement.

It’s with that I arrive at my first pass review of SaaS. Short for software as a service, SaaS is the relatively new software delivery model that has taken the market by storm. I’ve talked with colleagues, read articles and blogs and reviewed stakeholder websites and my very first observation…very first one…was that there seems to be a lot of marketing hype. Witness Exhibit A;

‘SaaS is quickly becoming the model of choice’

‘SaaS poised to obliterate on-premise’

‘2009 will be banner year for SaaS’

It should be noted that I don’t begrudge the marketing hype, in fact I applaud it. Pushing to cement SaaS’s status as the next big thing is a shrewd move by stakeholders, and one that could pay amazing dividends especially in this market! Clients are unsure, worried and in uncharted territory and offering something new almost certainly guarantees a captive audience.

My second observation is that I found no sound financial case work supporting general SaaS value prop claims. While on its face you’d naturally assume the low/no cap-ex outlay speaks for itself, I expected to find at a minimum details that juxtaposed exactly how SaaS value is delivered vis-à-vis on-premise. I didn’t. I did find a lot of ROI claims, which may satiate some, but without a breakdown of component parts does very little for me. What’s more ROI is a comparison tool, so when it’s presented alone – i.e. The ROI was 43% - you can be pretty certain it’s simply a marketing tool much like the press release or user conference. The fact that I couldn’t find solid financial analysis (I’m looking at you IRR, NPV, Depreciation, Price Points and WACC) doesn’t mean it doesn’t exist but it does raise an important question. If demonstrable and material value props exist with SaaS why is it not more highly touted?

Next Week, Part II – What am I missing?

I'm Back!

I’m back. I know the blog’s been stale for a while, but Q4 saw me finish up a client project and transition to the high stakes world of day trading. The latter required massive amounts of concentration, nerves and time to learn the ropes and keep my shirt! I did. I’m back.

The past few years have seen the emergence of EIM as a full fledged industry due in big part to firms like CALD and ACN. Like many other industries, this emergence coincided directly with our recently ended credit boom and at its height saw packages and projects pretty much sell themselves. Don’t get me wrong, the software and service providers (of which I was one) worked their tails off and delivered across the board, but my long winded point is only that the environment was conducive to sales. And that this environment no longer exists.

As in life, the death of one often coincides with the birth of another. In EIM’s case the end of easy client capex is being replaced by a stingier environ in which return – demonstrable, not the marketing ROI kind - will again reign supreme. That client return to focus (pardon the pun) plus increased competition for fewer dollars will necessitate true differentiation, creativity and out of the box thinking from software and service providers alike. I bold true because our clients will quickly dismiss recycled decks and solutions that ineffectively address their new and existing cost, functional and operational problems.

I’m going dollars to donuts the software providers realize this and are feverishly dialing up R&D in an effort to separate themselves and attract greater market share. After all software supremacy, not add on services, is the only path to market dominance for nascent software firms. However, I’m less certain consultants are spending adequate time coming up with new ways to attack our client’s aforementioned problems.

My experience with human behavior leads me to conclude that most consultancies are simply contracting thought in pace with the economy. Taking the necessary but insufficient measure of reducing head count and price points while clinging to the same crusty models of yore. I predict the crisis, while unfortunate, will yield two types of consultants. Two types that couldn't be more antithetical.

1. The type that yearns for the comfortable milieu of yesteryear and simply recycles anachronic thought and modalities.

2. The type that asks why.

Personally there’s no schadenfreude in the current economic dislocation. This thing has touched every country, every industry and almost every person on the globe. It’s insidious and to be candid a mess! But professionally as the guy who has incessantly asked “why” I’m excited at the opportunity that people may now actually listen to me!

Over time I will be asking why on everything from business case development, measured return, requirements gathering, process re-engineering, product selection, consulting business models and I will even let my mind wander into product development!

Sales Rep Profit and Loss

The S&P 500 index went up 85% between 2003-2008 which allowed companies for the most part to manage simply based on gut and experience as the revenue seemed to just roll in. 2009 will be a different year and a trend that I am starting to see is that companies are now looking at ways to gain insight into their numbers to back up their gut and experience. More so, I am seeing that companies are using analytics to watch the bottom line along with the top line across their sales force.

Is your company looking to track and analyze new metrics for 2009? Is your company all ready analyzing profit and loss at the sales rep level? If so, what sort of insight are you able to capitalize on that wouldn't be available if you only looked at the top line for the sales team?

Following are some examples of how I have seen companies identify opportunities using a sales profit & loss report and grow profit even with an overall reduction in revenue growth.

• Align compensation with company P&L goals
• Redefine territories to reduce travel and operational expenses
• Promote higher margin products
• Promote volume sales of products of a decent margin

To help us better understand what is meant by the term sales rep profit & loss report let's take a look at an example.

Then we will want to drill down into the NW region to see what is going on in the region
From here we can drill into the rep level view for California in order to see the details behind the problem
This is just one high-level example of how to organize your sales, compensation and expense information to help drive profit growth in 2009 but hopefully this provides you with some ideas as you and your company look for ways to deal with the changes that are imminent in 2009.

The way it should be....

“Deal with the world the way it is, not the way it should be.”

I’m not sure where I first heard this aphorism or which eminence griese deserves attribution but I am certain of its practicality. I quick blog here because my buddy JLD over at Leapcomp kind of got beat up over an observation - right or wrong - that he made regarding negative marketing.

Bad-mouthing competition never works, and if a vendor truly has a superior product, let the product speak for itself and make an argument for the product’s superiority rather than for the inferiority of the competition. This is a concept I would have at least expected companies focusing on incentives and rewards to understand!

Almost everyone faced a situation where some people try to make others look bad to make themselves look better, or where a bully needs to harass people to feel better. Fortunately, this behavior rarely pays off.

The question organizations really need to ask themselves is, do you really want to do business with a vendor with a lack of professionalism and business ethics, who will lower themselves by “playing dirty”? Can you really trust such a vendor, and depend on them to deliver a mission-critical solution?

In theory I could not agree with the spirit of JLDs post more. That spirit as I see it is businesses should focus their efforts on convincing clients why they should DO business with them, not why they should NOT do business with the other guy. I have used the following analogy ad infinitum to illustrate my contempt for ‘going negative’ in business and politics.

In college there was never an instance when competing for a girl where I felt the need to bad mouth another guy. If the girl found nothing appealing about me, or I couldn’t succinctly make my case (handsome, funny, charming, romantic, I can go on and on…) then I didn’t deserve her, for me it made no sense to back into a girlfriend because then she really doesn’t want you she just doesn’t want the other guy more, and nothing fruitful comes from that.

But while I detest going negative, from a practical standpoint I have to take exception with JLDs assertion that going negative “never works” and “rarely pays off” (a prima facie contradiction I might add.) We know that going negative works because it continues to persist. As you read this there are people in boardrooms and campaign war rooms across the globe outlining negative strategies to unveil against their competition. And much like the West Coast Offense or a hamburger jingle or cereal cartoon character it’s done because IT WORKS. And it works because even the most erudite, tempered and philosophical of us are prone to emotional appeals, which is exactly what ‘going negative’ hinges on…emotion.

In the year 2456 when Spaceley Co. is seeing double digit decline in the sales of their sprockets due to upstart George and Associates you better believe if human emotion has persisted in its current state then ‘going negative’ will be on the menu, fortunately there will still be plenty of people around like me to publicly lament this flaw in the human condition.

kt

Facebook is not a strategy dude....

“We’re going to use Facebook to get the word out, millions of people will learn about us through this app alone.”

This was the response from my buddy when I questioned him recently regarding his teams marketing strategy for their new startup. My friend, a self proclaimed computer nerd, was surprised when I explained to him that from a business standpoint “using Facebook” didn’t constitute a marketing strategy. I explained thoroughly that Facebook was just a tool and confusing tools or tactics with strategy was an easy way to go nowhere fast and frustrate yourself immeasurably during the process.

How do I know? Because I’ve seen it up close and personal. I’ve seen clients whose conflation of strategy and tactics mirrored my friends, clients who thought their new comp app through some mystical magical powers of wonderment would relieve all of their comp ills and launch their sales org into the mesosphere.

The problem is that a comp app on its face can do no such thing. As a standalone, a new comp app is more analgous to getting new tires than it is a world class racing team, or at least that is how it is generally viewed by detached non comp enterprise stakeholders. Which means any case that attributes growth and increased competitiveness solely to ‘getting a new comp app’ with no regard for strategy, is probably pretty specious and treated as such outside the confines of its originator.

To be sure, a comp app when positioned appropriately is definitely a part of increased competitiveness and can play an integral role in growth, but it needs a strategy. Chances are if you are reading this you are generically familiar with the term strategy and can probably recite the technical definition you learned in Management 101. You’ve probably also had some strategic responsibilities so let me be clear in stating I recognize everyone’s interpretation and application for strategy is different. With that I walk through my thoughts on strategic development and finish up after the jump.

Strategy is THE most important element in any competitive environment. Talent and technology are great but are ancillary to a well thought out strategy. IMO a good strategy consist of three elements - purpose, path and execution.

Purpose - why we’re here: Every strategy needs a purpose; otherwise it is not a strategy, it’s just a to-do list. There is a reason you are buying that comp application, deciding to use Facebook or playing shorts in the market. So ARTICULATE IT. A purpose can be forward looking (Think R&D) or can derive from a problem (Decreasing Sales). Either way I cannot stress how important articulating this is. I use a basketball example from my playing days to illustrate:

Example: We entered the conference tournament as the 8th seed and had the luxury of playing the first place team. They were bigger, stronger, and taller and had crushed us in two regular season contest. These facts, which coach articulated at a very high volume for seven straight days of practice, constituted a major problem and gave us a purpose to coalesce around.

Purpose: Our opponent is better than we are right now.

Path - where we’re going: Define the road and end game. This helps those you are leading (or who are supposed to be leading you) envision exactly what the outcome looks like. This is important for two reasons; first it keeps scope in check…when Richard in accounting brings up another one of his “genius ideas” mid stream bounce it against the end game you’ve defined to see if it syncs. Second, it helps narrow the focus of all involved, a critical element to any successful strategy.

Example Cont: The other thing coach articulated ad infinitum was “we are going to outsmart them and win!” Everything we did that week of practice was focused solely on that. There were no itinerant assistant coaches pushing their own agenda, no players looking for glory down another road, the goal was clear. Now since this was an athletic contest, the end game really defines itself (win) but the path, which is equally important, was clearly and consistently communicated.

Path: We will win by outsmarting our opponent!

Execution - what we’re doing: This is where the Facebooks and comp apps come in. Who is doing what when and how are they doing it? What are they (or is it) addressing? What part of the problem is this tool solving? What are the needs and expectations? Some consultants refer to this colloquially as “blocking and tackling.”

Example: We used multiple zone defenses, light ball pressure, back door cuts, strategic timeouts, unconventional player combinations, guard traps, big bumps and a slow down offense to stymie our opponents that memorable March afternoon! Our opponent’s advantage (our problem) came from their individual talent and those tactics were implemented to not only neutralize their advantages but to provide us our own. In short they were frustrated, played well below their talent level and we won a nail biter in the end!

Execution: We are going to use a zone, four corners and a 3 guard attack

I understand that there are some dissimilarities between crafting and executing business strategy and athletic strategy, but I prefer the mindset of those guiding the ship mirror what I’ve outlined above. I’m currently on a sixth month sabbatical and plan to spend some time researching and blogging on the non technical aspects of sales comp, specifically strategy, profit/loss implications, business processes, competitor analysis, reaction and leadership. Hopefully I’ll have some interesting blogs for you in the future…stay tuned!

-kt

Leverage your ICM Solution

The following is an excerpt from the “5 Best Practices with Analyzing Sales Performance – Handout” that Livengood Consulting Group published today. The complete handout is available at http://www.livengoodconsultinggroup.com/Resources.html

Leverage your ICM Solution

Common Problems
How confident are you with the sales information that you currently analyze? Are you able to easily compare your performance pay to your sales results to determine how to use performance pay as a strategic lever to take advantage of sales opportunities?

When Robert YoungJohns was in charge of Europe Sales for a large high tech company, he remembers a sales status meeting where they were reviewing sales results in their CRM system. The team was surprised to see a deal that was worth a few billion dollars for the current quarter since their average deal size was in the millions to tens of millions. When they spoke with the account executive who closed the deal they found out that the deal was going to be realized over a number of years and shared amongst across a few companies. Essentially the sales information that they were reviewing in CRM was the projected amount and not the actual sales amount for that quarter. The information wasn't reliable for determining their current quarter sales.

Unreliable data is a common problem that companies have when analyzing sales information. We have to be able to trust the data before we can really gain visibility and insight.

Leverage your ICM Solution

Our Incentive Compensation Management (ICM) system stores the actual sales transactions that you use for paying the sales force.

Court precedence such as Joseph Jett’s case with the Kidder, Peabody & Co. in the 90s has determined that companies have to be able to substantiate the information we use to pay commissions in a court of law.
If we work for a public company, our executives have to sign off on the information that flows through your ICM system.

Information in our ICM solution is reviewed by sales, finance, sales operations, human resources, internal auditors, external auditors, sales reps and sales managers. This information has been reviewed carefully and does provide us with a solid source of information for analyzing sales.

ICM also provides us with a one to one link between actual sales and performance pay. This visibility and insight allows us to use performance pay as a strategic lever to take advantage of sales opportunities that we identify.