Five BI Predictions for 2009 and Beyond

In this interesting article Gartner reveals its 5 predictions for 2009.

1. Through [to] 2012, more than 35 per cent of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets
2. By 2012, business units will control at least 40 per cent of the total budget for BI
3. By 2010, 20 percent of organisations will have an industry-specific analytic application delivered via software as a service (SaaS) as a standard component of their BI portfolio
4. In 2009, collaborative decision making will emerge as a new product category that combines social software with BI platform capabilities
5. By 2012, one-third of analytic applications applied to business processes will be delivered through course-grained application mashups

This all goes with our strategy to deliver high quality business analytics over web interfaces. This method provides a number of advantages for our customers:

(1) Updates are immediate and without IT overhead,
(2) Can customise interfaces and white-label look and feel to a customers needs,
(3) Provide the customer with extra computing power through future partners.

The first point is worrying for business in general though. When 35% of all companies will still not be making any use of their data assets it means that they will become more uncompetitive over time.

If you are interested in any of the issues raised ring us for more information and advice.

What software do you use?

At some point in any tender for work you will be asked "So what software will it be written in?" or some derivative of this. The answer that they want to hear is something like "Oh, C++ of course", or "Excel everytime!". The answer which should be given is "whatever is most appropriate for the task".

We use three criteria for picking software for jobs:
(1) Does the format the software save in an Open Standard?
(2) Does the language handle the data concepts in an easy to read manner?
(3) Will the software be able to communicate with existing packages used by the business?

The first is important for data legacy. In 10 years time will you still be able to read and write from the files? This is one of the reasons why XML formats are so important as they can be reconstituted by any XML parser into sensible objects.

The second is important as it helps maintenance of the code. In 2 years time will a new programmer beable to decipher the code?

The third is important as any business has legacy/existing software packages with data which they want to analyse if we cannot extract that information we might as well not have it. So this is critical.

This is why is many of our analysis tasks we use the language R. Yesterday there was a great article about R in the NY Times which highlights the success of a Open Source statistics package. R takes its inspiration from the commercial product S-Plus which is now owned by Tibco. R is picking up users from all kinds of fields because it offers such a wide range of packages but also because you can easily incorporate the code into many other applications.

Note that nowhere in this article do we pick software because
(1) we know how to use it best,
(2) it is my favourite software,
(3) it is a common to use this language now.

Fashion and personal preference are the wrong reasons to pick new software, future business use should make up the bulk of the decision making process.

In your company you have probably commissioned development work? Pick a project at random and ask yourself 3 things:

(1) Can I still run this application?
(2) What other program could I analyse the data from this application with?
(3) In 5 years will I still be able to access this software?

Hedge Fund Winners and Losers 2008

In the article "Hedge Funds suffer worst losses but beat markets" there is a good round up of the highs and lows of hedge fund performance in 2008. If you look at the trends Hedge Funds should give better returns than the markets by definition but are not necessary profitable. If they had not beaten the markets one would have to assume their "hedging" either was non-existent or badly formulated.

The average loss of 18-19% loss depending on your source is probably too high as these will be composed of both liquid but more importantly illiquid instruments which if they were to realise the value of these would make their P and L look much worse.

On a more positive note though there have been some great successes for those who foresaw the giant bubble bursting. Some of the biggest winners were making 28%-40%. The key for them has probably been staying liquid and realising that debt was mispriced.

Although some commentators foresee investors fleeing hedge funds, investors are always looking for that extra return and so yes we will see consolidation, yes we will see many go to the wall, and hopefully yes we will see greater due diligence. However they are not going to disappear completely and if they have good risk management and good investor relations they should be able to ride this crisis out.

Spreadsheets can do more harm than good

Having set up my Google Alerts I was alerted to this story posted on Monday.

http://www.news.com.au/business/story/0,27753,24874072-5012425,00.html

This completely agrees with our thinking on spreadsheets and broader business processes. Applications like Excel and Openoffice calculator are fantastic for quick and dirty calculations but while they have the functionality to be so much more it does not mean they should be used to do so. It is scary to think how many companies create intricate pricing engines, trading strategies and other complex calculations in spreadsheets and then not take them to the next level. In our experience this has two serious side-effects. The first is to hinder further examination of the relevant processes and the second is that it makes keeping them up to date a nightmare.

The usual excuse of course is that everyone can use a spreadsheet and it is therefore a cheap way to create processes and calculations. While both are true to some extent, this ignores a more important excuse NOT to keep it in a spreadsheet - Risk Management. By creating a bespoke process either as a web application or through other software one can ensure data integrity, data backups and mitigate user error, plus you will most likely have to create some kind of a database which has so much more potential as your business grows.

So why not dust off those old spreadsheets and think about what new and innovative ways all that information could be used in if only it was released into a more productive format.

Happy New Year

Happy New Year, and welcome to a slightly changed blog. We decided to change our name from Automating Data Research to Automating Business Processes as this is more apt with what we do.

Over the Festive season we have been developing some fantastic new algorithms which will form the basis of a new Business Process Analytics Framework. If you would like to know more please contact us.