This article builds on the previous articles on "Business Systems Failure -- HOW do you recognize it?",  "How do you recognize a HIGH VALUE Business Information System Solution?" and "The RIGHT Information to the RIGHT Person at the RIGHT Time Enabling THRIVE Decisions -- THE Fundamental Requirement".  It also builds on the entire range of articles published last year as listed at the end of this article.

The article examines in considerably more detail the components of precision configuration that enable executives, managers and supervisors to obtain answers to EVERY question that they can reasonably ask of their systems immediately at the touch of a button, including the capability to drill down to the detail electronically immediately.

Methods of information classification that enable any business information system to operate at its full potential, using methods that are independent of technology and which can be applied TODAY no matter what operational software systems you are using, whether big brand or ancient legacy system, are presented.

The benefits discussed will also DRAMATICALLY improve the value yield from your investment in "Business Intelligence" software, data warehouses, query and reporting tools, etc.

The benefits are huge, if you apply ALL that is presented in this article you WILL be able to answer every conceivable question about your organization limited only by the extent to which you have systems in place to take the measurements and your far-sightedness in defining the classification lists.  As a spin off you will have created a lean and highly effective and efficient organization in which the quality of decision making from the CEO down has been significantly improved, leading to improved competitiveness, growth and profitability.

Are you frustrated by your inability to obtain answers to simple performance questions about your organization at a touch of a button, despite your substantial investment in business systems and back office staff?  This article will show you why this is happening and headline HOW to fix it.

One of the persistent complaints that I hear from Business Executives when I interview them as part of my "Pulse Measurement" investigations into why business systems are NOT performing is "Dr Robertson, we have spent a huge amount on this system and yet I cannot get answers to my questions, even though I KNOW that the transactions have been processed".  An extension to this point is frequently "and I am told that we need to spend a considerable further amount over several years to rectify the problem".

If I could show you how to enhance the configuration of your EXISTING business information systems such that you could get answers to every reasonable question, including the questions you have NOT yet thought to ask, immediately, would you be interested?

And, IF in the process I could show you how to turbocharge your systems AND your business?

It turns out that in order to answer every question that you can reasonably expect to be answered by your business systems, IMMEDIATELY, including the questions you have NOT yet thought to ask, you do NOT need new technology, you do NOT need a project running for years and you do NOT need to spend a huge amount of money – there are measures that you can take, starting today, that will immediately start to improve the situation, probably assisted by some external facilitation.

In fact, it turns out that IF you fully apply everything that is referred to in this article you will even be able to answer questions that today you would NOT think of asking!

Interested?

There is a progression of measures that you can take, starting with some simple measures that you can quite literally implement within the next few days through to some measures that will take longer and cost more.

In considering what follows it is important to stress that I am approaching this subject from an engineering perspective in which data precision and the capability to model complex real world situations is at the very heart of the use of computers, and has been for many decades.  Accordingly the standards of precision and the magnitude of value yield envisaged are both orders of magnitude greater than traditional business systems practice -- including but NOT limited to ERP and Business Intelligence as well as your industry specialist software.

The principles presented in this article, correctly applied, create intelligent data at a level that enables Business Intelligence tools to achieve their full potential.  By this I mean that BI solutions can be created that deliver business intelligence at a level of sophistication and power that is beyond what most people can envisage.  The strategic decision support value of this capability will deliver a level of competitiveness and strategic operational effectiveness and efficiency that is far ahead of organizations that do NOT apply these principles.

I frequently find that “tech-centric” people say they understand what follows, even though inspection of the systems they manage clearly indicates that they do NOT!

In considering my approach, as set out below, it is vital to understand that I am coming from a strategic management; thrive economic; military command; robust engineering; precision data point of departure.  Consequently I am addressing things in a RADICALLY different manner that is DIAMETRICALLY OPPOSED to conventional TECH-CENTRIC thinking; such that many (most?) tech focused people do NOT understand this.

If you are deeply of the belief that computer software and other technology is THE ONLY source of competitive advantage in this age, then I ask you to put aside that belief in order to engage with what follows.  Fundamentally ALL the leading authorities on strategy agree – it is NOT technology that gives rise to competitive advantage, it is the effective strategic APPLICATION of technology that differentiates organizations.

This article is about a new and better way of applying the already extremely powerful software that is in general use and universally available – be it ERP, Business Intelligence or an Industry Specialist product.  Please put aside your "tech" hat right now and don your "strategic business" hat for the remainder of this article.

Contrary to popular belief, the MOST important requirement for business information systems is NOT process, it is HIGH VALUE (thrive -- as defined by Professor Malcolm McDonald ) business decisions – decisions that result in the organization doing things differently and better than its competitors on a consistent and sustained basis.

The value of ONE dramatically good (thrive) decision can be measured in millions of pounds through increased profitability and growth.  Conversely the consequence of ONE dramatically bad (die) decision can be measured equally dramatically in the opposite direction (such as IBM's decision to downplay Personal Computers in the 1980's).  However, such "fluke" decisions are few and far between, whereas a culture of modest, consistently strategically good (thrive) decisions will ENSURE high profitability and growth.

My approach, as headlined in this article, IF followed fully and in strict compliance with my methods, protocols, principles and practices, WILL deliver sustainably higher operational and strategic efficiency and effectiveness than other techniques.  This will lead to substantially increased and sustained profitability and growth that will far outweigh the greater apparent up-front cost of making use of my services.

Many years ago I was contracted by a client to specify and supply a simple piece of software for analyzing insurance loss events.  There was a tight deadline and a tight budget.  I facilitated the specification of the software in two days, the developer built it in ten days.  My design of the software incorporated about 56 drop down validation lists covering every possible information element to be captured.  I spent ten days sitting with a Director of the client organization developing the content for all these validation lists in accordance with the principles set out in this article.

A year after commissioning I received a phone call from the client, "James, this is amazing, we have a fantastic range of management information, answers to every possible question we can think of, and we captured the data with 4 clerks instead of the 12 we budgeted for, and we captured 90% of the data versus the 10% that we budgeted for!" – see the CRM Risk Control case study on my website.

This was when I first learned that it was possible to deliver the answers to every possible question AND to do this at lower cost and with greater overall efficiency than traditional methods deliver.

This learning is a key foundation stone in what is shared in this article.

The steps in achieving a comparable result for your comprehensive integrated business information system (ERP plus industry and business specialist modules or systems) are discussed in the sections that follow, commencing with measures that you can implement immediately:

Let us start with a very basic example of a simple example – "Credit Note Reason" codes.

The following codes were all that existed in a system that I advised on that was NOT delivering:

01 Incorrect Price
02 Damaged Goods
03 Incorrectly supplied

Those look acceptable do they not?

But what about "Discontinued"?

and "Order Duplication"?

and …

It turns out that MOST of the questions that an executive or manager might ask relating to Credit Note issues CANNOT be answered with the above list.

In fact, to answer the question "how many credit notes did we issue for Order Duplication?" or, more likely, "how many duplicate orders did we dispatch in the last quarter?" it is necessary for a fairly senior staff member with reasonable understanding of the business to have all the credit note transactions extracted into a spreadsheet and then undertake some detective work based on a comments field, IF it exists and, quite possibly, go and interview some staff to see if they can figure out which credit notes were issued because of Order Duplication.  This staff member might also determine the number of duplicate orders by downloading the orders file into a spreadsheet, sorting on order value and carefully inspecting each order to identify duplicate orders and then checking for the existence of Credit Notes.

Any way you look at it, answering the question "how many duplicate orders did we have to credit in the last quarter " is going to take some time and cost some money, at least in salary and often in consulting fee with your resident system support consultant.  If you then ask the same question for the last year the exercise must be repeated.  Next quarter the manual exercise will have to be repeated, AGAIN, and the next quarter and, so on.  Such that you will have a member of staff with a fancy spreadsheet, possibly some support from an IT staff member or consultant and various other costs and inconvenience in perpetuity!

AND, the chances are that in the event that you ask questions like "which sales representative" or "which product class", or … the person who extracted the data will likely NOT have thought to extract that data and so, having presented you with the answer to your first question they will then again disappear to work on their spreadsheet for a few minutes, or hours or days in order to answer your new question.  It is highly unlikely that you will be able to click with your mouse and drill down on your own to answer your questions – NO matter how sophisticated your business information system and NO matter what the software salesman promised you (the software will almost certainly be able to do the drill down, but the data will prevent the functionality from being of any use).

In fact, IF your Credit Note Reason codes look similar to the example above, EVERY question that is not directly associated with "Incorrect Price", "Damaged Goods" or "Incorrectly Supplied" will require that you initiate the above manual course of action.  AND this will happen irrespective of whether you are running a 20 year old legacy system or the latest and greatest all-singing-all-dancing, fully integrated solution from SAP, Oracle, Infor, Sage, Microsoft …

Because the problem has NOTHING to do with technology!

The problem is with the code scheme and the content of the list -- it is NOT a technology problem.

The problem relates to the ordering, organizing and classifying of information – the logic associated with the capture of data WHILE the knowledge of the transaction is available to the person processing the Credit Note.

IF the code scheme is:

01 Incorrect Price
02 Damaged Goods
03 Incorrectly supplied

Then ALL information that relates to ALL the other possible reasons for issue of Credit Notes is LOST at the moment the clerk clicks "Accept" and closes the Credit Note.  It is lost so severely that it can only at best be APPROXIMATELY recovered weeks, months or years later by inference based analysis of transaction data and by consultation with staff.  The resulting data will NEVER be accurate, reliable or accessible and, if two staff members separately undertake the spreadsheet exercise described above they WILL deliver DIFFERENT results!

Note also that since there are ALL sorts of OTHER reasons for granting Credit Notes AND the list does NOT include "Other" the operator is forced to allocate the Credit Note to whichever code SORT OF, approximately, at best guess, item comes somewhere close to one of the three options.

The result is that you will NEVER know how many items were misallocated and any analysis that you DO undertake based on the above categories will be approximate and unreliable.  This too will require manual effort in a spreadsheet to sort out the mispostings BEFORE you have reliable statistics for Incorrect Price, Damaged Goods or Incorrectly supplied.  This too will require repeat effort every time the period changes or different questions are asked.

ALARMING AND FRUSTRATING??!!

Absolutely!

and the solution is SO simple! -- The problem can be PERMANENTLY rectified in a matter of a few hours so that you can answer any related question electronically in real time with a few mouse clicks going forward!!

Following are the Credit Note reason codes that I facilitated development of for the above client.  The list took about an hour to develop together with the CEO using the process described below.  It was then tested with various other staff members and was implemented very successfully – the organization can now answer EVERY POSSIBLE QUESTION with regard to Credit Note Reasons.

Reason Code Description

C. ORDER CANCELLED
CC  Order Cancelled Credit Control
CS  Order Cancelled by Consumer
CT  Order Cancelled by Customer
D. DAMAGED OR DEFECTIVE
DF  Defective Product
DM  Damaged Product
DP  Damaged Packaging
DT  Consumer Complaint
P. PRICE ERRORS OR DISCONTINUED
PD  Discontinued
PI  Incorrect Price
S. SUPPLY ISSUES
SD  Order Duplication
SF  Customer Non-Franchise Holder
SI  Incorrectly Supplied
SK  Overstock
SL  Late Delivery
SO  Oversupplied
SV  Not in Customer Inventory Master
T. USED AS TESTER
TT  Used as Tester
Z. OTHER
ZN  Not Known
ZO  Other

Notice that the only thing we have done is to replace the inexact "sloppy" content of the Credit Note Reason drop down list with very carefully designed and comprehensive content.

Note that the above list allows any user with access to even the most basic query and reporting tool, and ALSO the most sophisticated Business Intelligence software, to not only answer EVERY possible question instantly with a few mouse clicks, it also enables them to drill down in accordance with the two level hierarchy in the code scheme.

Note also that this content is EXACTLY the same no matter what software you are using -- there is NO need to change your software and NO need to spend large sums of money, at most you need perhaps an hour with an experienced facilitator, less time if you tackle a number of lists with the same facilitator in one session.

AND note that there is NO OTHER way to achieve "answers to every question, including those YOU have NOT previously thought to ask, NOW!" – if you do NOT capture the information when the clerk processes the transaction that information is lost, effectively forever!  And there is NO technology in the world that will retrospectively go back in time and engage with the physical world relating to the Credit Note to back analyze the reasons that were NOT captured – you will have to use a reasonably senior staff member to undertake the sort of inexact exercise described above.

So, one arrives at a most remarkable discovery!

For a small amount of time preparing a comprehensive and well-structured list one moves from a massively inefficient situation to a highly efficient situation that enables you to literally answer EVERY POSSIBLE QUESTION about Credit Note reasons, and thereby, a whole range of related business questions.

Imagine the difference if EVERY single drop down list in your entire business information system environment were populated with data of comparable quality and comprehensiveness!  This is how one begins to moves one's systems from the mediocre to the exceptional as presented on the graph below, as presented in several recent articles:

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Notice that the LAST category in the new list is "Other" – in nearly all cases there is a real possibility of an item being left off the list when the list is developed.

By having "Other" as a separate category at the END of the list you trap those instances in a controlled manner since, as long as the list is comprehensive and well presented, by the time the clerk gets to "Other" and has NOT picked a valid description, then the probability is that there really IS a category that is NOT catered for.

In that case you NEED "Other" because, if you do NOT have "Other" the clerk will either end up dumping the transaction against the nearest misfit OR, much worse, adding a hasty new item to the list which is a cast iron guarantee that the quality of the list will degrade rapidly.

Addition of new codes should be tightly controlled by a senior person who understands the fundamentals of what is discussed in this article and, if you develop the list systematically and thoroughly with correct facilitation, addition of items should be an extreme event.  Addition of even ONE inexact item to a list starts to break the quality of the list – note that this is entirely reasonable – we live in a world of precision and therefore it is entirely appropriate that we apply precision to the management of our system master data!

Either way NOT having "Other" results in a mess of varying degrees of severity and a return to questionable and unreliable data and the inability to accurately and dependably answer EVERY POSSIBLE QUESTION relating to returns and credit notes with a few mouse clicks.

"Other" should be monitored regularly and, in the event that there is material use of "Other", the required extra codes should be carefully added and / or the required training and discipline administered.

You may have looked at the example above and concluded that the original list of three items was over simplified and that was the real problem.  Consider the following example from another organization (also credit note reason codes):

Don't like my face
we messed up
over charged
duplicate invoice
under budgeted
Salesman sold too little
Consultant error
System error
Value to the customer being questioned
Perceived value
Rate wrong
Software
Software returns
Wrong module on it
Goods not received
GRN does not agree with PO
Time sheets do not agree
Work not authorized

Note the overlap between "we messed up" and various other items.  Again any analysis based on this list will be inexact and manual intervention will be required.  Because the list is NOT structured it is likely that there are gaps in it and therefore further items will be added to the list on an ad-hoc, on the fly, basis resulting in further quality degradation and analysis challenges.

This list was reworked into the following headings:

E SERVICE ISSUES
I PROJECT CONTROL ISSUES
L VALUE PERCEPTION
N UNAUTHORIZED WORK
S  UNMET EXPECTATIONS AND SALES ISSUES
V VENDOR ISSUES
X ADMINISTRATIVE ISSUES
Y RETURNS
Z OTHER

This list should be extended to a further level incorporating all relevant items in the first list, plus a comprehensive set of further sub-sections that FULLY describe the possible reasons for issue of Credit Notes to result in a fully formed list like the more detailed example in section 1.2 above.

Notice that even at this level of detail the above structured list will give rise to far better management information than the original unstructured list.

This principle is universal -- badly structured validation and classification data results in GROSS inefficiency whilst highly structured information based on a strategic executive view of the business gives rise to ORDERS OF MAGNITUDE improvement in management information, and all the associated benefits that result from this.  These benefits include efficiencies in system and business operation and savings on technology staff and system consultant cost.

It is important to realize that the formulation of the major categories of a hierarchy is an art that benefits from considerable experience with classification schemes coupled to diverse business insight.  A poorly formulated new list will give problems in time, so the use of a specialist facilitator is advisable.

How do you get to the second version of the above list?

The steps are quite basic:

a. Get a few key staff members in a room with an experienced facilitator who understands data and the classification of data AND understands business.  In many organizations you may only need one or two staff members and, even if you do NOT have an experienced facilitator, IF you follow this process you WILL produce a MUCH better result (remember however that if you cut corners you will suffer forever);

b. Make sure that your choice of staff in the working session is FULLY representative so that ALL possible reasons for issue of a credit note reside in the heads of one or more of your delegates so that your final list is as comprehensive as possible;

c. Brainstorm ALL possible Credit Note Reasons – no interruption, NO debate, just dump until everything is out – have a fast typist record all the items in a spreadsheet displayed on screen.  Very important -- you should have a listing of ALL Credit Notes issued in the last few years on hand for reference in order to ensure that your list is comprehensive;

d. You should also have the existing content of the Credit Note Reason drop down list, this is an important input to your brainstorming – everything in the existing list MUST be catered for in the new list;

e. Individually formulate between five and nine major categories of reason as in both examples above (the capital letters) – the cognitive span of the average human being is between five and nine.  That is the maximum number of headings that any person can get their mind around quickly in order to post fast and accurately.  Seven is the optimum number for speed of recognition and accuracy of posting;

f. Type these up on-screen for each person;

g. Collaboratively derive a single list of major categories that all members of the team agree with.  With experienced facilitation this goes fairly quickly for a small list such as Credit Note Reasons.  As mentioned above, the development of a quality hierarchy is NOT axiomatic, an experienced facilitator will add considerable value;

h. Set these up in capital letters as headings for the detailed hierarchy – note that it is a convention with regard to this approach that operators should NOT post to the headings, they are for information and to provide structure for consolidating the data only;

i. Take the detailed brainstorm list and allocate every item on it under one of the main headings, cleaning up and tightening wording as you go;

j. Sort the list so that the most strategically critical items (the essence of the business) are at the top and the more mundane are at the bottom.  Put "Other" at the very end;

k. Note the use of Capital letters for the headings and proper case for the posting level items.  This makes the list easier to scan to find the correct category – the focus is always speed and accuracy of allocation;

l. Note the use of Indents to highlight the headings and the child categories.  Again for speed and accuracy of allocation – force the indent with a leading period or underscore if necessary with the software that you are using.  With a well-structured list operators will NOT be using "Find" they will be navigating the hierarchy so a leading space or period is NOT an issue;

m. Note the use of trailing periods (decimal points) in the codes in order to highlight and follow the indents.  This allows software to easily summarize the data and easily drill down;

n. Note the use of mnemonic alpha codes as far as possible – if the first letter of the word does NOT give you the sort order you want use a key letter from within the word or phrase – staff will rapidly pick up the association and remember the most frequently used codes.  This again contributes to accuracy and speed of posting – remember the Case Study above.  Only use numbers if nothing else makes sense, for example where a very specific sort order is required and you cannot develop mnemonics that fit.  An experienced facilitator will add value here also;

o. Validate the list for completeness with all personnel who are involved with using that particular list, whether as data capture clerks, operational staff or managers and executives who will query the data.  Refine and tune as necessary – allow for three iterations as a general rule;

p. Load into your operational software.  In most cases this will be a simple back-end import.  In order to maintain whatever intelligence is in the history you may retain the old codes in the list as well but, in that case, you should make sure that you code the new codes so that they occur first in the list with the old codes lower down in the list and clearly separated with a heading to say "DO NOT USE CODES BELOW THIS LINE" or similar – note that after a year the scrappy history will largely be a non-issue.

The above is quick and easy to do, it will require no more than an hour or two to develop a rigorous and complete list of Credit Note reason codes in most organizations, a bit more in very large organizations with multiple departments with different reasons.  In such cases you may need several working sessions and several review iterations.  Remember that it is vital to have a SINGLE list for the entire enterprise in order to enable you to analyze any way you want at the executive level and to be able to drill down to the data no matter what.

Repeat this process for every small stand-alone validation list throughout all your systems, whether there really are only three entries or whether there are a hundred.  This can be done quickly and easily in any enterprise and will deliver significant value.  An experienced facilitator will assist you to achieve a high quality outcome at best possible speed.

In some cases you may find that add-on software or spreadsheets have been developed using the old classification data.  Inevitably, when you change the lists these add-ons will be broken and, in many cases, they may NOT be required any longer.  If such integration is a possibility in your organization the above process becomes somewhat more complex in that you will need to undertake an impact analysis and take measures to modify or replace any add-on elements.

In some cases this could translate into a major activity in which case an executive level decision will be required as to whether you live with the existing data or replace it with new high quality data.  This is a major reason why, when you DO apply these principles, you take the time to do the new list right first time – for this reason use of an external highly experienced facilitator is strongly recommended.

In some cases you may find that changing these lists will break integration with other major systems or other modules.  Again, assess the impact and take an informed business management decision.

From where I sit, based on the very substantial benefits that result from having high quality data, I advise you to "bite the bullet" and take the pain – my strong recommendation is that over time you upgrade ALL your data using the principles advocated in this article.  In the case of major integration impacts you will probably be advised to delay the implementation of the new code scheme(s) that impact the integration until you have developed a comprehensive plan in line with the items discussed below.

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By now I hope that you have, at some level, recognized the very substantial benefits of having highly structured, comprehensive and well thought-out code schemes in all your minor classification lists.

However, this will ONLY allow you to answer the questions for which you already have lists, such as the Credit Note Reasons.

The NEXT step is to add EVERY POSSIBLE validation list that you can think of to every possible master data table:

a. Products
b. Assets
c. Materials
d. Customers
e. Suppliers
f. Mobile Plant
g. Fixed Plant
h. Projects
i. Personnel
j. Warehouse
k. Manufacturing
l. Accounts  and Financial
m. etc

Go through every single master file and brainstorm every possible attribute that you can think of that you EVER use to describe that particular logical item.  Set priorities in terms of current pain and expected business benefit.

To undertake these sessions you require quality time from your Executive team and other staff all the way through the organization.  Remember that IF you want to answer EVERY possible executive question you MUST have EVERY possible attribute, including particularly those attributes that ONLY the executives take into account.  An experienced facilitator can help you to do this faster and more accurately and also spot opportunities that you might miss.

To give you an example of the sort of additional list I am referring to:

Some years ago I sat with the CEO of a company that sold Golf requisites including Golf Clubs.  I asked him "what are ALL the possible attributes of your major product lines?" Naturally enough we started with golf clubs and one of the first items he listed was "Golf Club Sound".  He went on to explain that different golf clubs make different sounds when they strike the ball -- "clicky" and "clunky" were two sounds he listed.  The sale of golf clubs is influenced by the sound of the clubs in use on the PGA leaderboard!  If the clubs in use by the leaders have a certain sound, sales of clubs with that sound increase and sales of clubs used by those that have dropped off the leaderboard with other sounds, decline.  Thus, from a sales and marketing, pricing, stock management and other strategic perspective knowing the sound that clubs make can be extremely valuable and significantly affect profitability.

In every organization there will be fields like this -- attributes that you use to describe customers, products, etc that, if incorporated in your data, would open the door to all sorts of interesting analyses.

How many extra fields should you add?

As many as you can possibly imagine being relevant!  -- Remember that IF the field is there and populated you can answer THAT question and all questions associated with that field – if the field is NOT there you are back to the senior staff member, spreadsheets and research – the negative impacts and real costs of cutting corners here are substantial.

These extra validation lists can be easily added in most modern business system suites and certainly in all the leading brands.  They are also easily added to even the most archaic legacy system as long as you still have access to the source code and a competent developer who understands the software.

Do NOT be shy, add EVERY possible attribute you can think of.  In real terms it costs you very little to add the extra fields and, once you are adding one field it makes very little difference in terms of time and cost if you add ten fields to a particular entity (table).  The planning, version control, testing, etc are almost the same whether you add one field or ten fields.

The time taken to populate the validation lists, once you have gone through the content development process outlined above a few times, is small and, again, once you take account of the time required to get the people in the room, brief them on the process, review the results, etc it makes little difference whether you develop content for one list or for ten or more.  Again, the real cost of NOT doing this is much greater and is an ongoing never ending waste of time and money!

The key thing to keep in mind is that the LONG TERM benefit of having every possible attribute is GREAT.

Note also that the process of classifying individual items at take-on is NOT greatly impacted by the number of validated attributes.  Design your coding sheets, if you have them, to reflect ALL the codes and the take-on will proceed quickly.  The additional finger on the keyboard time to capture a few extra codes is NOT great, particularly once your staff have learned the more common codes – refer to the CRM Risk Control case study above and the dramatic data capture productivity gains that were associated with well-structured, intelligently coded data and codes that were easy to remember.

The next step in answering EVERY question is to capture ALL relevant data from external sources in your data warehouse.  This is primarily an executive level requirement.  Identify ALL external data sources that you regard as having an impact on your business -- commodity prices, stock market prices, trade indexes, you name it, if you use it on a regular basis or even on a NOT so regular basis, create a table in your data warehouse.

You DO have a data warehouse don't you?

If NOT it is time to get one, NO significant business should be without one.

Either create an electronic feed or a manual feed (clerk at a keyboard) to capture this data at the required frequency, daily, hourly, etc as appropriate.

Do NOT get into massive debates, IF the data is available and it is relevant, just capture it.

Do NOT be seduced by arguments that this is "too much" – that is ONLY relevant IF you are going to incur significant data provision costs on an ongoing basis, in which case compromise may be required.  But the data that is regularly used, should ALL be captured and linked back to your operational system data, in whatever manner is appropriate to allow you to make the necessary association.  For example, if you own a flour mill, you will want the daily closing spot price for wheat so that you can compare the price you paid per shipment to the market price and analyze trends.

Well, the above items are the EASY items.

By doing what is listed above, even if you do NOT do the external data, you will be starting to obtain substantial GAINS relative to what you had.  You can do the first three items listed above at a pace that suits you, either heads down and done in a few months or a medium term project to upgrade all those items over a year or more.  It is up to you, but the gains are such that I advise that you move at best possible speed.

However, once you have fixed the items discussed above, you will start to bump your head against a MUCH bigger challenge – the primary classification of your MASTER DATA.  I am referring here to your Materials Group, Item Class, Product Class, Employee Category, Chart of Accounts, etc – the classification lists that typically drive, or are intended to drive rich functionality in your main systems.

Here the problems are diverse.  In some cases the quality of this data is so shockingly poor that there is NOTHING of value being done with the data.  In such cases there may be all sorts of add-on functionality, third party software, etc that is trying to deal with the mess or work around it.

When dealing with these major classifications it is vital to have an expert undertake a thorough impact analysis and evaluate your options.

There are broadly TWO alternative courses of action:

a. Fix the classification in the Data Warehouse ETL (Extract-Transform-Load) and then, in time, drop the classification into the operational software.  The initial step will take the 20% of the effort that will give you 80% of the high value outcome, albeit with limited operational benefit.  You will probably need to make some adjustments to the operational data;

b. Fix these things in the operational software from day one – this will give you the operational value as well – do this either incrementally or, if you are really ambitious, you could embark on a partial or complete re-implementation of your system (same system, new classification data);

In the case of your Data Warehouse, consider creating a completely new instance of the Data Warehouse and progressively pulling well-structured data into that instance while leaving the old instance running in parallel.  Develop the Transforms by mapping the individual master data records with the new classification scheme.  There are cases where this will NOT be practical and only a completely new list is practical.

Develop the classification of each Master Classification using basically the same process as described for the small lists, but with the understanding that you need a MUCH more experienced facilitator, with bigger delegate groups, with much more rigorous classification skills and more complex coding schemes.  As a consequence, developing these lists WILL take time and cost money.  See the ASCO Case Study for an indication of the value that results from doing this exercise.

In doing this it is vital to ensure that there is ABSOLUTE congruency of logic between different lists and corresponding lists in different systems.  If you have a classification of products in your manufacturing system you must have EXACTLY the same classification in your ERP and in your warehouse system (and your General Ledger to the extent applicable).  These companion lists may be summarized at different levels of the hierarchy, but the SAME structure and hierarchy MUST occur everywhere.  In this context it is VITAL to ensure that ALL disciplines in the business which are impacted by a particular classification are involved in the development of the content of that list.  Accounts working in their silo separately from manufacturing in their silo, etc is a recipe for more ineffective and inefficient system operation.

Notwithstanding the significant time and effort required to do these things, it is vital to realize that the benefits of getting this right will be SUBSTANTIAL!  Refer again to the curve of exponential improvement in value yield above and also the ASCO Case Study.

Note again that this is NOT about technology; it is about accurately modelling the business and the real physical world IN the data.  The lists and code schemes are technology independent although the exact focus of the Master Data lists IS a function of the target business information system to some extent.

Once you have commissioned the new classifications, not only will you suddenly be able to answer a wealth of new questions, the operation of your systems will become more streamlined and efficient, and you may well find opportunities to add neat custom software functionality, as discussed in the next section.  See the simple example of Credit Note Reason codes as a "taster" of the rich value that can be unlocked by applying these methods to your Master Data classifications.

The development of these lists is a highly specialized field that I refer to as Strategic Engineered Precision Configuration and makes use of Precision Taxonomies.  This is outside the scope of this article but is discussed in detail on my website, see the detailed Taxonomy Manual for download on this page or read on-line.

Alternatively send one or more of your staff to my two day course, "The Critical Factors in the Strategic High Value Application of Business Information Systems" to be held on Wednesday 20th nd and Thursday 21st May 2015, London, UK.  Fee £475 per delegate, discounts for three or more delegates and also for early payment.

Also available to be presented in-house if another date or location would be more convenient

Click here for more information or click here to book or see details at the end of this article.

Now that you have well classified Master Data, PLUS all possible attributes on your Master Data, your system suddenly becomes HIGHLY INTELLIGENT -- it now knows a very substantial amount about the business, FAR more than it did previously and in a highly structured manner (same software, different classification data!).

This opens the door to develop all sorts of business specific custom software of limited scope to enhance the information yield and functionality of your business systems.

Refer to the ASCO Case Study (doing things differently and better) for a detailed discussion of a real example of such an implementation and the benefits that accrued from a few small pieces of software that I specified that made full use of the business knowledge embedded in the new data.

We were able to use the highly structured brand related Product Class, and a number of business specific product attributes to drive hierarchical addition of Product records in the Product Master file, cascading Product attributes down the hierarchy so that the Product Record was extremely clean and precise.

We were also able to automatically generate brand related projects with structured expense categories in the Projects module of the ERP for Brand Management purposes.  This gave the business an extremely powerful Brand Management tool at very modest cost, with associated significant competitive benefits.  This is the power of having highly intelligent data.

It is the development of small pieces of strategically "clever" software that harnesses the full potential of highly structured and highly intelligent data that can push a client organization to the top right of the value curve above.  This is a very different world to the world in which most organizations operate relative to their systems.  This new world is one of exceptional business efficiency and effectiveness, increased competitiveness, growth and profitability.

This capability will, again, add answers to a further range of questions in your growing arsenal of strategic and operational information.

Inherent in this component is a requirement that code schemes and hierarchies are rigorously consistent across ALL systems, and all modules of major systems.  A situation in which separate instances of the same software exist with different code schemes for the same Master Data for different departments, such as Accounts and Human Resources, is totally out of the question.

Consistency and congruency are critical.  The same applies to consistency and congruency between the operational modules and systems and the ERP – one universal family of codes is absolutely ESSENTIAL.  This is a major reason why the overall custody of the integrated business system view MUST sit at the CEO level – refer previous articles on this topic.

By the time you have reached this point you will have dramatically raised the bar in terms of corporate effectiveness and efficiency, with resulting material increases in overall business efficiency and productivity.  Increased quality of strategic information, and quality of decision making will result in significantly increased competitiveness, growth and profitability.

Once you have grasped the benefits of the approach outlined above I hope that you will be starting to see the final piece in the jigsaw puzzle – enterprise modelling – a highly structured logical (hierarchical code) model of the entire enterprise that accurately models the real world complexity of the entire enterprise.

This sounds obvious, and many organizations believe that they do this, however, in practice, every organization I have ever encountered ends up going outside their systems, making approximations and doing large amounts of manual work in spreadsheets, using highly qualified staff members to do the work.  Virtually NO enterprise has a live model in their data that truly delivers what I am referring to here.  Remember that I am coming from an engineering perspective directed at creating an extremely powerful model of the business in a manner that will enable you to run your organization to standards of excellence that are generally NOT associated with business information systems and ERP in particular.

The basic approach to business modelling that I am referring to here originated out of a 1,000 hour research project that I undertook many years ago with a view to developing an absolutely rigorous enterprise Chart of Accounts.  It proved MUCH more difficult than I had anticipated (I quoted the client 40 hours).

The first client where I fully applied these principles phoned me a year after commissioning to say "James, this is amazing, we have a massive range of management information and the audit has been cut from six months with qualifications to six weeks unqualified and we did this with one LESS staff member!" – see the V3 case study on my website.

The business is modelled as a hierarchy of coded information "cubes" (NOT the same as Business Intelligence cubes), each distinctly modelled in classification schemes, comprising logical dimensions of:

a. "Location" – highly structured hierarchical list of where we do what we do;

b. "Function" – highly structured strategically focused hierarchical list of what we do;

c. "Accounts" – the enterprise Master Chart of Accounts designed to give a consistent and congruent Chart of Accounts for the entire enterprise and used to drive a mini Cubic Business Model Chart of Accounts behind every location and function intersection;

d. The "Accounts" combined with "Location" and "Function" yield a very precise Cubic Business Model income statement and balance sheet for every business unit.  These mini financial statements should be determined by the Chief Financial Officer in consultation with the Chief Executive and operational executives.  Note that the recent approach of using "Dimensions" as attributes on the General Ledger record is NOT suitable for this approach. It is essential that this model is executed using the conventional approach of creating discrete accounts for every Account-Location-Function intercept, and ONLY for those that are valid, from a business management perspective.  This is an inherent requirement of the precise modelling approach being advocated here.

e. All the other dimensions – personnel, projects, products, assets, mobile plant, inventory, etc, etc;

All the above in the form of hierarchical structured lists that logically model the real world complexity of the business in a manner that permits roll-up and drill down, with congruent and consistent classifications and code schemes across every single system in the enterprise.

Inherently, the best time to develop this capability is when you commission a new system, in which case the Cubic Business Model can be installed as the foundation of the entire system configuration and underpin the integration.

Alternatively, you can develop the Cubic Business Model as a component of the transform layer in your enterprise data warehouse, and map the existing Charts of Accounts in your existing operational systems into the data warehouse.  This will allow you to quickly and effectively combine data from diverse and unrelated business information systems into a single enterprise repository.

By doing this you do away with the need for all businesses to run the same software and can accommodate one division running thirty year old legacy systems and another running the latest and greatest products from any of the leading global players.  This is again a matter of doing the 20% of the work that will result in 80% of the enterprise decision support value.  Refer to the Rennies Group case study for an example where this approach was used to provide a consolidated financial view across over 200 companies ranging across trading, travel, transport, logistics and other fields.

The comprehensive implementation of the Cubic Business Model Chart of Accounts design and associated principles, protocols and disciplines will greatly improve the quality of your management information; greatly improve management control and accountability; significantly reduce back office, administrative and audit costs; and lead to improved business efficiency, effectiveness and profitability.

Over time you can cascade the new classifications down into the operational systems.

The development of the Cubic Business Model to the full extent envisaged here is a highly specialized field that requires very specific methods, techniques and experience.  I have developed specialized software, now in its third generation, to ensure that the coding and structure of the Cubic Business Model is absolutely consistent and precise, which is a necessary requirement to unlock the full potential of the method.  The precision data that results from application of these principles enables exceptionally powerful reporting, modelling and analysis capability, enabling the business to answer questions that it did not think could be answered directly off its core systems.

By the time you have taken ALL the steps listed above you will be in a position where you will be able to obtain the answer to EVERY POSSIBLE QUESTION you can reasonably ask relative to ALL core elements of your business and many NON-core elements.  Inquiry and reporting, modelling, dashboards and alerts will be much easier, highly streamlined and highly effective with new and more complex analyses easily achieved.  Electronic on-line, real-time drill down on reports, models and dashboards will also be a matter of routine.  You will have done this with the same operational and Business Intelligence and reporting software that you started with.  You will also have added many years of life to that operational software, even if it is legacy software.

You will also have massively boosted the effectiveness and efficiency of your systems and, by extension, massively increased the level of decision support to staff at all levels from the CEO down.

You will, effectively, have TURBOCHARGED your existing business information systems AND your business.

The bottom line impact of this approach will be substantially improved operational effectiveness and efficiency through greatly improved decision making leading to greatly improved competitiveness, growth and profitability.

What sets James A Robertson and Associates apart in this field is an extremely broad and diverse base of knowledge and experience built on a foundation of engineering rigour in the use of computer systems as precision analysis and modelling instruments, coupled with very rich experience in the creation of highly structured and highly intelligent data.  This is informed by military command training associated with the rapid acquisition of critical information leading to rapid high value life or death decisions.  All of this is coupled to grounding in economics, investment and strategy associated with enabling high value decisions.  This knowledge and experience set is greatly enhanced by dozens of investigations into failed and sub-optimal business information system projects and implementations over a period of over 25 years.

The entire approach is focused on enabling high value (thrive) decisions that support the essence of the business and how it thrives, and I am therefore well placed to assist you to implement the recommendations in this article.  Note that ALL the concepts and principles in this article have been assembled and, in many cases, originated by the writer, over the last thirty plus years of involvement with the use of computers in business.

I can assist you to take the initial steps on the journey above, and I can facilitate you through the entire journey – these are methods that I have personally developed and tested and which I am uniquely well placed to assist you with.

To help get you started I have developed three service offerings that will enable you to engage with me at no risk and little cost, a two day system health check, a half day executive briefing and a two day short course -- these are outlined below with detail on my website:

I am offering a special promotional "get to know James" consulting package comprising two days on site, the first day at my expense, in order to demonstrate my confidence in what I am offering.  During this intervention I will evaluate your systems and advise the scope of what is required for your organization to reach some or all of the above levels – as you stipulate.

On the second day I will facilitate a half day workshop to assist you to develop the classification schemes for an agreed selection of small lists as discussed in sections 1 and 2 above.  My fee for this intervention will be £525 -- nothing for the first day and £525 for the second day, provided the work is ordered by 31 March 2015 and executed and paid for by 24 April 2015.  Payment terms 7 days from completion of assignment.  I have great confidence that you will receive considerably more value than this fee.   This fee EXCLUDES VAT and travel and accommodation outside of London, UK.

This two day intervention will show you a number of easy measures to improve the quality of your business information systems data immediately.  These recommendations will relate to steps that will facilitate better decision making and will reduce frustration and time wastage associated with system information requests.

More information on my website or email me to obtain more information.

Or click here to place an order and secure immediate benefits.

The strategic and competitive application of business information systems is constantly hyped and sold, and seldom delivered – this briefing informs and equips business executives and managers to take charge of their business systems as valuable tools in their strategic and competitive arsenal.

This Executive Briefing will be presented at 09h30 on the morning of Thursday 14th May 2015 in Victoria, London, UK and will run for four hours.  It will be followed by a light lunch and an optional discussion session.

This event can also be presented in-house.

The fee for this event is £275 with discounts for multiple delegates and early payment -- £175 per delegate for three or more delegates booked and paid for by 27th March 2015 -- a £100 discount.   This fee EXCLUDES VAT.

More information on my website, or email me to obtain more information

Or click here to book now – seats are limited.

Equip business managers responsible for your systems to see the application of computer based systems in their sphere of influence in a new way.  Also equip technology managers to understand the REAL issues in the effective strategic application of the technology they manage, and commence a new dialogue with the business.

This two day course will be presented on Wednesday 20th and Thursday 21st May 2015, in London, UK and can also be presented in-house.  In this course I will discuss the principles discussed in this article in detail and give delegates an opportunity to practically apply what they are taught, with data from their organizations.

The fee for this event is £475 with discounts for multiple delegates and early payment -- £315 per delegate for three or more delegates booked and paid for by Friday 27th March 2015 -- £160 discount.

More information on my website, or email me for more information.

Or click here to book now – seats are limited.

I look forward to being of service to you either in a consulting capacity or in presenting my methods in a briefing or course situation.

Yours faithfully,

Dr James Robertson
James A Robertson and Associates Limited
Assisting clients to thrive through effective and efficient application of Business Information Systems

Mobile    : +44 (0) 776-862-2875
Landline : +44 (0) 207-059-0007

eMail        : James@James-A-Robertson-Associates.eu
Website   : http://www.James-A-Robertson-Associates.eu
Linked In  : http://uk.linkedin.com/in/DrJamesARobertsonERPDoctor

James A Robertson and Associates offer a range of services directed at enabling clients to put in place comprehensive measures to achieve the level of system effectiveness and efficiency discussed above in such a way as to give lasting high value low lifetime operating cost outcomes.

This includes a range of in-house presentations on topics such as "Why your Business Information System is NOT delivering and HOW to FIX it", "Business Information Systems in Strategic and Competitive Management", " The Critical Factors in the Strategic High Value Application of Business Information Systems" and "Lessons from the Bridgestone – IBM case documents".

All of these can be delivered as one hour presentations, half day executive briefings or two day courses.  They can also be presented in standard format or tailored to your organization through a series of executive interviews.  Translation of slides to another language and presentation through an interpreter are also offered.

I also offer short, sharp diagnostic interventions to determine why your business system, department or project is NOT meeting your expectations or is stalled, including easy to understand actionable advice on how to turn the situation around.

I will give you an independent evaluation of the health of your existing systems and give guidance on whether they REALLY need to be replaced or not and, in many cases, advise how to greatly extend the life and sustainability of those systems.

Please click here to email me for more information.

A discussion of how strategic essence should inform ALL business improvement projects and particularly business information system projects.  This thread discusses the analysis of strategy, the planning of strategy and feeding strategy through into business system specifications and the management of business improvement projects.  Articles to date include:

Summary
1: Strategy Defined
2: Differentiation
3: The Essence IS Different
4: Strategic Essence is the Point of Departure
5: Determining Strategic Essence

A discussion as to why business information systems fail to deliver on expectations or fail outright.  Coupled to discussion of the Critical Factors that must be taken into account in order to achieve successful outcomes.  This thread is progressively discussing more hands-on specifics of achieving high value outcomes and builds on the Strategic Essence series.  Articles to date include:

1: Introduction
2: Mythology and Lack of Executive Custody
3: Lack of Strategic Alignment and Lack of Precision Configuration

Discussion of practical specific measures that can be taken in order to greatly improve the information yield of business information systems at both the operational and executive strategic level.  A number of simple steps that can be taken immediately and more complex measures that can be taken over time. 

This thread is discussing increasing business system and data warehouse value yield using techniques that lead to significantly improved business intelligence capability, including support for the ability to “obtain answers to questions we had not previously thought to ask”.  This builds on the content in the Strategic Essence and Real Issues threads.  Articles to date include:

1: Introduction
2: Principles of Data Engineering
3: Steps in Applying these Recommendations

In order to fully apply the methods and principles discussed in the threads above with regard to new systems it is vital that a robust and effective approach to procurement is applied.  This requires a tough procurement approach directed at achieving a tough business outcome orientated project that ensures a high value outcome.

This thread discusses the components of such a procurement approach.  The individual documents and processes that make up the approach are outlined.  Thereafter the components are discussed in more detail.  Articles to date include:

1: Introduction
2: Bill of Services, Laboratory, Go-live Certificate, etc
3: Executive Engagement, Bid Compliance, Adjudication and other matters

Comment on some of the dramatic business information system investment failures of recent years.  Articles to date include:

1: The BBC Digital Media Initiative £100 million write-off
2: Bridgestone versus IBM -- The REAL Issues – Overview
3: Bridgestone versus IBM Part 2 – Governance and Procurement

A series of articles on important principles that you can use to better understand the health of your business information systems and how to improve their strategic and operational value yield to your organization.  Articles to date include:

1: How do you recognize a HIGH VALUE Business Information System Solution?
2: Business System Failure – HOW do you recognize it?
3: The RIGHT Information to the RIGHT Person at the RIGHT Time Enabling THRIVE Decisions

Please browse my website for more information

The home page, http://www.James-A-Robertson-and-Associates.eu will give you a good overview of what I am advocating and help you to navigate the entire site.

The Table of Contents lists all the webpages on the site, there is a lot of deep content that is NOT immediately visible.

The Article Catalogue contains well over 150 articles on diverse topics.

The Article Keyword Cloud provides alphabetic keywords linking to many of the articles

The Conference page lists around 90 conference presentations, nearly all different with around 40 of the presentations live on the site for you to view and download -- email me if there is a presentation you would like to view that is not on the site.

If you would like to know more about me there is detailed information on the website and further detailed information on LinkedIn

Visit the Testimonials page to hear and read what clients and others have to say about me

Visit the Failure Catalogue to get a realistic perspective of the severity of the problems with the business information systems implementation industry.  There is also a description of what I mean by the word Failure in this context

The page on The Critical Human Foundation will give you some idea of the full diversity of the matters that I take into account in advising my clients

I look forward to discussing how I can assist you to unlock the FULL value of your Business Information Systems investment, no matter which software you have, how old it is or how dissatisfied you are with it