Monday, March 31, 2008

Dimensions in BI - where does customer figure?

IT innovation has done wonders to Business Intelligence (BI) utility. Once what used to be a process for increasing the competitive advantage of a business by intelligent data sourcing and analysis has now become an inevitable management tool that pervades every corner of enterprise.

The industry is rapidly moving away from thinking about BI as a set of technology tools, according to Bill Hostmann, Research V.P of Gartner Inc. While BI in 2004 focused on querying, reporting and multi-dimensional analysis on top of a data warehouse, today's dynamic and competitive business environment demands a different approach.

"It's a very dramatic shift," Hostmann said. "It's not just about building a data warehouse and putting some reporting tools on top of it. It's about putting a much larger framework together that includes a much larger piece of the organization, and delivering more of these different kinds of analysis capabilities than you've had in the past."

I am glad dimensions of BI are expanding to include every facet of enterprise. But why stop at enterprise? The real test of its utility is how it tempts companies to positively impact customer experience. The customer needs no machine fed data to realize who cheats him and who doesn’t. Look at HP gouging customers on cartridge sales, Gillette on shaving products, enterprise IT vendors on ERP/CRM software that have been depreciated over decades. The day when customer feels he got real value for money, I could say BI has scored its maiden goal.

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Thursday, March 27, 2008

Docking Big Four yet again!

It is often noticed in business circles that no large scale fraud is possible without the connivance of auditors. But they are the first one to shirk when the ugly underbelly is exposed. We had seen it in Enron, WorldCom scandals and I seem to have had an eerie sense of timing while I posed this question on Auditors.

Then I read this NYT article based on an investigation report commissioned by the DoJ into the collapse of New Century Financial, one of the largest subprime lenders that directly accuses its auditors – KPMG. Some of its accusations echo charges that surfaced about the accounting firm Arthur Andersen after the collapse of Enron in 2001. E-mail messages showed that some KPMG auditors raised red flags about the accounting practices at New Century, but that the KPMG partners overseeing the audits rejected those concerns because they feared losing a client. It also deals with fraudulent accounting practices that masked its likely losses.

The investigator Mr. Michael J Missal, who also worked on an investigation of WorldCom’s accounting misstatements, concluded that KPMG and some former New Century executives could be legally liable for millions of dollars in damages because of their conduct.

I often argue with clients why they insist on a Big Four auditor in every JV deal. They do have a reputation as a firm, but as individual partners they have their own pet prejudices. There are auditors with great track record and reputation that will do a far better job for far lesser fee. But somehow it doesn’t register. Meanwhile Big Four carries on the Arthur Andersen legacy, winking and nodding!

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Wednesday, March 26, 2008

Not kids' play

Jean-Paul Edwards, head of OMD Media Futures at Manning Gottlieb OMD, says it is not hard to see why brands like in-game advertising -

"What is interesting is that it demands the consumer's attention, because if they are not concentrating on the game, they will die, crash, lose or whatever. In this media-fragmented world, where it is hard to capture people's attention, that is not something that is easily sniffed at".

Before I ask about its billing format, I read this –

“Users have to see ads at a given size and angle for 10 seconds for it to register an impression. Ads are then billed on a CPM (cost per 1000 impressions) basis. Other in-game ad specialists, including Double Fusion and Microsoft's Massive, take a different approach. They also require a user to have seen an ad for 10 seconds, but allow this period to be made up of half-second units, meaning that an impression can be registered when a gamer sees an ad on one occasion for 10 seconds, or glimpses it on 20 occasions for only half a second each time.”

But it is not without its share of issues. Dave Hompe, group media director at digital network Isobar, the issue with in-game ad measurement is the same one that affects all online advertising.

“In the TV market, everything is compared to the relevant impact of a 30-second spot. We do not have those multipliers for impressions, either for gaming or for standard online advertising. That kind of insight just isn't available. A lot of brands and companies are starting to see this as a challenge. The first stage is when clients say, "Let's assess relative efficiency for $1 invested in TV versus online versus in-game advertising." This is the ultimate prize. We are probably not at the point yet where can make that assessment, but we can see there is an absolute value in using multiple channels for campaigns. The tricky part is finding the right balance.”
On-line gaming itself is innovation at best. Now devising a metric could hardly be the stand-off. I think it’s just a question of time.

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Thursday, March 20, 2008

Is there more than what eyes can see?

Has it been a fire sale at Bear Stearns at $2 ? Could they have been in far better shape had they managed to hold on to their positions ?

Is all this forecast of a looming recession (or is it in already?) only because we don’t know anything worse than that?

Is Ben Bernanke a hero in the making?

Is controlling inflation a greater priority than cutting interest rates to boost credit markets?

Find a very interesting take by Jeremy Segal in this K@W podcast….

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Monday, March 17, 2008

Where were the auditors?

For mortgage crisis that led to a credit squeeze in the global markets, we blamed lax diligence standards adopted by lenders and their bond issues favorably rated by credit rating agencies. But what about auditors, that never found a thing missing?

Fee dependence, weak laws and self-interest inevitably compromise impulses for penetrating audits. The inevitable outcome is worthless audit reports. Carlyle Capital Corporation, a hedge fund with debts of £11bn, has become the latest casualty of the deepening credit crisis - and the effects will ripple throughout the financial world.

It is disappointing to see this even though in the last 7 post-Enron, SOX driven years, shareholders have given them unprecedented power and budgets to be more invasive in their diligence and their ability to challenge managements.” But their motives don’t change much beyond fee squeeze.

Wondering about Bear Stearns? Deloitte certified their annual report on January 28.

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Thursday, March 13, 2008

Give us just so much BI that we need

Gartner Analyst Bill Hostman says valuing Business Intelligence(BI) is not an exact science and often comes down to mindset, comparing BI to a college education:

"It's not easy to persuade someone to go to college based on a purely financial or numbers game, and the same thing goes [for] BI," Hostmann said. "You just have to believe that BI is absolutely essential for you as an organization to investment, that this is a fundamental core competency that you have to have."

Hostmann suggests this question - "Do you have the information that you need to manage your business?" – as a metric for measuring user satisfaction.

I say BI software often floods a user with too much information [he hardly ever needs but pays for] that his decisions often veer off-track. Need to twist that question a bit – “How little information you need to effectively manage your business?”

In that you get an effective metric to compute ROI from BI software. Make users pay less since they get less. Need I tell you they are staring at a recession…?

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Wednesday, March 12, 2008

Innovation tip - Space computing

Put more stuff in the cloud, you need more storage, means huge data centers that consume humongous energy. That’s what builders of monstrous data centers like Microsoft and Google have recently found out. A recent EPA report to Congress estimated that U.S. servers and data centers used about 61 billion kilowatt-hours of electricity in 2006, or 1.5 percent of the total electricity used in the country that year.

Before Congressmen get ideas and bill them for global warming, Microsoft Research gets into the act. Since cooling system accounts for about half the energy used in data centers, any attempt to conserve energy will have to tweak the cooling function. Shut down servers? Yes. But the question is which of the 5000 whirring? Energy economics should not mean functional disablement.

Traditionally, load-balancing algorithms are used to keep traffic evenly distributed over a set of servers. The Microsoft system uses load forecasting and load skewing algorithms to distribute the load and frees up servers during off-peak times so that those servers can be put into sleep mode. These are currently designed for connection servers used for services active over long sessions, such as IM services or massively multiplayer online games. They’ve also designed a sensor that monitors the servers to make sure they're not being overcooled and watches for hot spots as well, where cooling is low. This info is passed on to load skewing algorithms that processes the rest.

Sounds great. But I would like the data centers to be stationed in space and data streamed back and forth. Use solar power. The Sun ain’t gonna’ bill us. That’s also when they can really claim rights for cloud computing. Or space computing for that matter !

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