MARKET | Sep 26, 2017

Analytics, the “truth” and the acceleration of time

What is needed to analyze data within a business?

The theme of analytics and big data is undoubtedly one of the most interesting and relevant topics for our businesses and for society in general.

By now we are all aware that the knowledge and exploitation of data is of enormous value and can also radically change a company or public administration.

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But why is that so? What are the changes that can be generated and why are they relevant? For whom?

Within this ambit and by way of example I would like to offer an account of our first-hand experiences at Cefriel over the past 10-15 years.

At the beginning of the 2000s, activities monitoring the center were concentrated on a few dates during the year: the  quarterly progress report and the year-end. The more our activities were redirected to the relationship with businesses, the greater the center’s growth and hence the greater the need for a shorter, quicker monitoring cycle. It was no longer possible to wait for a quarter to understand how things might be going: we had to be able to intervene more frequently.

This is why we created a monthly check-up. By mid-month, having collected all work-in-progress data, invoices, cash flows from the end of the previous month, a meeting was held with the center managers to discuss the status of the business. It was an expensive meeting to prepare, as a senior manager had to take charge of gathering the data, aggregating it and creating visualizations that would allow us to initiate and manage a profitable discussion. All this was essentially done ‘by hand’, integrating the results of the analyses into Excel and PowerPoint.

In reality the benefits were concrete but not very illuminating. The cost for collecting the data was, however, significant. Often during the meeting we spent a lot of time dealing with inconsistencies or temporal misalignments noted between the various information collected. Moreover, even the monthly interval was starting to become tight.

In 2005 we decided on a very simple step: we decided to “kill” (may my Microsoft friends forgive me) Excel and Powerpoint. We created a database of all the projects where each colleague could, via web App, enter any information on proposals or progress reports for an activity. In this way, an integrated, single source of truth: was created: that was the “truth”, henceforth nobody would be allowed to store their own data; we all had to store information within that structure.

By creating this communal database, we built web-based cockpits so that the variables and key indicators needed for our management activities could be visualized. In doing this things changed radically:

  1.  preparation times for the monthly meeting were eliminated: all the cockpits were instantly updated on the basis of     the data in the single source of truth
  2.  conflicts and inconsistencies in reading the data were eliminated
  3.  the scope and aims of the monthly meeting changed: having access to daily updated data, it was even possible to   carry out monitoring or validation operations on a daily basis, leaving the task of discussing more strategic issues to the monthly meeting.

The monitoring cycle had thus actually been eliminated

Today we are facing a new challenge. Having years and years’ worth of information available, we can move from an analysis of the absolute data values  to an evaluation of the first and second derivatives,that is, the speed and accelerations of the phenomena we want to monitor and manage. This leads to an ever-increasing ability to analyze and anticipate the company’s performance, thus making it more resilient and capable of rapidly and preventatively adapting to changes or unforeseen developments in the market.

In general, for us, analytics and big data (or in any case integrated data management) have meant three very precise things:

  • elimination of data aggregation and management costs: everyone stores information within the single source of truth
  • elimination of errors: duplication of information; misalignments; conflicting and contradictory analyses
  • reduction/elimination of the management monitoring cycle: we can in fact say that today the center is managed in real-time and all the data contributes to the management activities from the moment it is created and inserted into the system.

For us this is one of the major benefits of using these technologies:   giving certainty to our business management team and eliminating the monitoring cycle, thus significantly accelerating the response rate to the dynamics that are both internal and external to the company.

And this is what we tell those who ask us why it is necessary to do all this: to spend less, to be more relaxed, more proactive and more resilient. In other words, to have a healthier, more agile company that is ready for market challenges and the competition.

Alfonso Fuggetta