Shazeeye's Blog Thoughts on User Experience, Technology and Business

28Feb/110

Business Intelligence=Smarter Decisions for Companies

Forrester Research describes Business Intelligence as a set of methodologies, processes, architectures, and technologies that transform raw data into meaningful and useful information to enable more effective strategic, tactical, and operational insights and decision-making. Business Intelligence aims to support better decision making in an organization. And as we know smarter decisions result in better results.

With Business Intelligence, Organizations on real-time can monitor “how are we doing”, “why we are performing in that way” and how should they be doing.

For this post, I describe a case study that gives an example of how to draw insights.

Let's assume company ABC launched a Product A in 2005 and has seen significant growth since launch. The situation here is that ABC is trying to understand the impact of a competitor (Company XYZ) that launched another Product B in same market in Q3’08 and Product A will start losing share to product B. As a first step, we plotted raw data to get some understanding of product A performance in recent years. In chart 1, I have plotted the raw data and to smooth volatility of raw data, I have plotted the 4 week moving average as well.

Some of the findings from this exhibit are as follows:

  • Over last two years, product A has seen steady growth
  • Product A is a seasonal product and sales remain relatively flat till April followed by a steep increase in May in 2008 and 2009. This is consistent with expected use of the product because most consumers use this product in summer and fall
  • For 2010, there was no increase observed in May which is a concern for Company ABC

Since the data is on a weekly basis, I looked at it in a different way. We plotted each year as a separate series for a 52 week period to further investigate findings from above.

On a year-on-year (YoY) basis, 2009 was 23% higher relative to 2008. Year-to-Date (YTD) 2010 is 9% higher relative to the same period in 2009. Essentially there is a wide separation between 2009 and 2008 lines. Till April’10, there was separation between 2009 and 2010 lines but since May’10, 2010 weekly sales are tracking at the 2009 weekly sales.

Based on above analyses for Product A, it was inferred that sales since May’10 have been flat and we have not seen a summer spike in 2010. ABC received similar weekly sales data for competitive Product B from a data vendor and the next step in the process was to analyze the recent trends in Product B.

In similar format to Chart1, Chart 3 below shows the weekly sales for product B since launch in Sep’08.

From Chart 3 above, sales for Product B demonstrate steady increase since launch in Sep’08. Like product A, there was no sharp increase in May’09 and this aligns with competitive intelligence received last year that Company XYZ didn’t have all the promotional material ready by summer 2009. However since May'10, there was a significant increase in sales which is the same time period when sales for Product A didn’t demonstrate seasonal spike similar to historical patterns.

The next step in the process was to compare sales trends between the two products. Plotting the sales trends in same chart would not have provided a meaningful comparison because scales for two products were different. Growth comparison is more relevant when comparing two products with different scales. In this case, we looked at the indexed growth i.e. we compared 4-wk moving average to respective product’s previous year avg. Chart 4 shows the growth comparison between Product A and Product B.

From the above chart, it can be inferred that growth rate for Product B increased significantly in May’10 and Product A remained flat. Based on further discussion, it was found that Competitor XYZ had launched a promotional campaign which increased awareness of Product B among customers. The analysis was further expanded to compare sales between products in different geographies and different customer segments. Based on this analysis, ABC designed a new marketing program to show benefits of Product A were superior to those of Product B. This analysis helped Company ABC understand competitive threat which they were able to successfully blunt with innovating marketing programs.

The above case study is an example of insights that can be drawn from vast data and how these insights then drive decision making. With so many Business Intelligence Platforms currently available, organizations can build performance monitor dashboards metrics on a real-time basis to make smarter business decisions.

27Feb/110

Using a Balanced Scrorecard to Drive your Company’s Strategy

A balanced scorecard is used to measure, align and motivate four aspects of a company's performance- financial, customer, internal business processes and learning and growth- with a company's vision and strategy. Measures can be both quantitative and qualitative.  To help explain this concept  I have applied this approach to increase my brand equity through my blog in the image below.

31Jan/115

Technology I love that makes a difference in my life

I love technology and want to share with you five pieces of technology- software and hardware- that make a difference in my life.

1. Water flossing: I have to admit I never flossed everyday before buying the water flosser. After I bought the Waterpik (picture on right) I enjoy flossing and have not missed flossing a single day. This product not only has made flossing efficient but my dental hygiene has improved too.

2. Vacuum cleaning robot: Vacuuming can be boring and the Roomba takes care of my all my vacuuming needs - both hardwood and carpet without me having to be present. This product does an excellent job though it does have a few drawbacks specially in the area of smarter navigation which I hope get addressed in the next generation products.

3. iPhone: This is definitely my favorite piece of technology. Its ease of use and the many applications it offers  make it my favorite.

4. Bluetooth enabled Mini Cooper: I love the Mini Cooper- iPhone integration. I can call anyone using the circular dashboard that has all my contacts and use the controls on the steering wheel to connect or disconnect calls. I can't wait to have a GPS integrated into the car soon.

5. Facebook: I am a Facebook addict. This service provides instant emotional gratification. The emotional equity shared among family and friends through stories, pictures and videos is its greatest asset.

Dear Readers, please share your favorite gadgets. I would love to try it out if I haven't already and would love to know why you love it so much.

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22Jan/110

The Art and Science of Negotiation

In business, you don't get what you deserve, you get what you negotiate.- Chester L. Karrass

Two skills that are essential in business and life are selling and negotiation. We do both activities nearly everyday. We're trying to sell an idea to a boss  or negotiating who cooks dinner in the evening. I'm going to share a few techniques on effective negotiation and will use a case study from my MBA program.

Negotiations can be distributive where there is only one issue to negotiate (price of a car) or integrative (as the case study below) where there are many issues to negotiate. Before we analyze the case study we need to understand some terms negotiators use.

Issue is the thing being negotiated such as the price of a car or the amount of effort your kid is putting into keeping his room clean (monetary or non monetary). Position is your stand on the issue. For example, you want to pay $5000 for the car or you want your kid to increase his room cleaning efforts to thrice a week. Interests are what drives or motivates you to seek that specific position. For example, you feel it's a used car with a slight dent and hence deserves no more than $5000 or you want to instill good values in your kid and want your home to be clean.  Target is what you hope to get. It could be equal to or different from your position. For example, you hope to get the car for no more than $6000 (target) but you start the negotiation at your position or $5000. Reservation is the point you walk away from the negotiation. For example if the seller of the car asks for $6500 you will not negotiate any further resulting in no agreement. ATNAs (Alternatives to Negotiated Agreement) are alternate options you consider if the negotiation does not work out. For example, you will rent a car a car for the next 12 months and once you get a job you will buy a new car or you will use lease a car. ATNAs and BATNAs are always outside a negotiated agreement.  For example, you can't negotiate with the seller saying you could work out a financing option with him to get the car as this still is within the bounds of you and the seller. BATNA (Best Alternative to Negotiated Agreement) is your best alternative or your choice from the ATNAs if the deal does not work out. It has to be equal or equivalent to your Reservation. For example if your BATNA is to  rent a car for 12 months then it has to be equivalent to $6500 or your Reservation price. Proposals are options to help with your negotiation. For example, you are willing to pay all cash if you get the car at the amount you want.

Sally Soprano is a case of a once popular soprano who wants to get the lead role for a famous opera. As her agent please  negotiate with the opera company, Lyric, based on the details in the case (2 purple sheets on the right).  Once you're done you can look at my preparation sheet: Sally Soprano Preparation Sheet

Useful techniques to use during a negotiation:

- Expanding the pie: adding more resources/issues to satisfy the interests of both parties. If the issue is to get more than 5% stock in the company expanding the pie would be I can only offer you 5% stock in the company but I'm willing to add 10 vacation days to your job contract (adding a resource). You may need to know the other parties underlying interests and you must add resources that matter to the other party. For example, in the Sally Soprano case you could get creative and think of the options as seen in the blue sheets.

- Cost cutting: Reducing the cost of one party so that you get what you want. For example, you are asked to work overseas but you don't want to leave your spouse so your boss decides to fly your spouse (reducing your cost) with you.

- Bridging: A new (third) solution that satisfies interests of both parties. You have to get their trust to help come up with this solution together.

- Decoupling/Unbundling Issues: Take one issue and break it into 2 or more issues. For example, if 2 people are deciding to divide an orange, usually you would divide it in half. But it is possible to separate the orange (one issue) into the pulp and the rind (2 issues). After understanding the underlying interests we found that one person wanted the pulp and the other the rind thus satisfying both parties.

- Logrolling: Trading issues based on one's priority (in the above example pulp and rind). You would prioritize issues for both parties and trade them according to priority. You would start by trading your least expensive issue in the beginning and thus progress forward.

- Contingency contract: Used when parties have different views about the future. For example, in the above case Sally's agent feels she can command an 85% audience while Lyric feels it will be less than contract where her salary is contingent upon audience capacity will help.

Things to keep in mind: Some negotiations are relationship based. You would rather maintain the relationship than win the deal at an aggressive price. Some negotiators use anger during the negotiation as they think it gives them the edge but bear in mind this could help you if you're negotiating with European Americans and harm you if you're negotiating with East Asians (Source: PsychCentral).

Dear Readers, It's time to practice your negotiation skills so that you never settle for less. If you have any negotiating stories, please do share.

31Dec/102

Useful Frameworks to Drive your Business Strategy – Part 2 of 2

This post is a continuation of an earlier post. For the first four business strategy frameworks please read the earlier post.

5. Porter's Five Forces: Porter's five forces analyze the competitive forces in your industry - specifically, new entrants, substitutes, buyer power, supplier power, intensity of rivalry- so that you can optimally position yourself for sustainable competitive advantage and thus profitability. Nike's 5 forces show that overall it's an attractive industry for Nike with three of the five forces in favor for Nike - supplier power, threat of new entrants and buyer power.

6. Value Proposition and Positioning (4Ps & 3Cs): Value proposition defines the value you deliver to your target audience (benefits minus cost; benefits include points of parity and points of differences with respect to competitors) and positioning defines where the brand is in the customer's mind (hopefully customer and company perceptions are aligned). These terms can be better defined with the 4Ps and 3Cs. The 4Ps define your Product, Price, Promotion, Place (how you distribute your product) and the 3Cs define your Company, Customer and Competitors. The Land Rover positioning as well as the positioning for its individual car segments is seen on the image in the left.

7. Value Chain Analysis: The value chain analysis looks at the activities that reinforce the value proposition. It is a group of integrated value-added activities that are provided to the customer. It's easier for competitors to copy a company's value proposition but not it's value chain. The image below on the left shows the value chain for Crown Cork and Seal.

8. Boston Consulting Group's Growth-Share Matrix: The Boston Consulting Group suggests you look at two factors - market share and growth - to determine which products you should keep in your product portfolio and which you should drop. The image below gives you clear direction in terms of what to do if your product is a dog (divest), cow (milk), question mark (analyze further) or star (invest).

Happy New Year, Dear Readers! I wish you and your loved ones a blessed new year. May all your dreams come true!

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