December 2011

While we will wait until January to publish our recommendations for the new year, we can digest the lessons learned in 2011 within the technology markets and with Ventana Research right now. That’s appropriate, since we at Ventana Research are committed to helping you with solid information and education. We help thousands of organizations make a better, faster, safer, smarter and more cost-effective environment for leveraging technology to its fullest extent. Our benchmark research worldwide across thousands of organizations of all sizes and vertical industries has found there is a lot more room for improvement than most realize or are addressing.

The year 2011 began with my assessment on the diminishing science of research in technology analyst firms. Sadly, that assessment continues to be true. Gartner, Forrester and many others aspiring to be like them see primary research as unnecessary to assess what is really happening in the use of technology. We take the opposite approach, and increased the volume of primary research we conduct as benchmark research to provide not just the facts but also education and best practices. To give you a sense of the volume, in 2011 we released 21 benchmarks (see below) spanning every line of business and vertical industry. From concept to delivery, benchmark reports take a minimum of six months and included one of our best and largest in business analytics with research from over 2,400 organizations. If that is not enough, we have 15 more benchmark reports (see below) already in design, execution or ready to release in first half of 2012, putting us on pace to potentially double the number of benchmarks that we released in 2011. If you do not think we are busy in the research factory just ask Alan Kay our SVP Research Management who along with his team continues to generate more quality research than any other firm in the market. We also have invested in research into the vertical industries that we have been assessing as part of every one of our benchmarks over the last decade. From this research we have found that organizations still have a lot to accomplish to get the most value from aligning business and IT to manage and optimize business processes. We have found significant misuse of technology for some tasks and roles, but we also deemed across our 2011 research topics five to 15 percent of organizations innovative across the people, process, information and technology components of a specific business technology area of focus.

I would be remiss to not also mention the importance of our Value Index research into vendors and products. We have now perfected the science of helping you with your assessment of existing vendors and products and for new projects with a request for proposal (RFP) approach, leveraging real-world concerns and evaluation criteria such as manageability, reliability and usability. You will see more Ventana Research Value Indexes in 2012 to ensure you get the analysis and real assessment of vendors and products compared to the less useful matrix and box assessment approaches by other analyst firms.

Our firm’s efforts to make research and insights more readily available through social media continue to expand. Our focus on the quality of what we provide in social media continues to be recognized, and while we are not the most popular analyst firm online yet, we are being recognized as the most relevant. The use of social media is also critical for technology vendors, and especially those who market and sell products to service this need. Nevertheless, many technology vendors are still not strongly engaging in this area; that fact will be part of my upcoming analysis on the lack of social media competence on the part of technology vendors.

2011 was a turbulent year for business and IT and also in the technology industry. The turbulence ranged from changes on the vendor landscape from merger and acquisitions (M&A), to executive leadership changes and scandals, to technology strategy changes, to elimination of products from the market. All of these changes impact your computing portfolio; the software and technology you use is becoming obsolescent faster than you planned, or already eliminated from the market. Businesses continue to depend on enterprise software applications and tools, which means any changes impact your business computing plans. You can read for yourself many examples of these changes and impact to the industry from the roster of our research teams’ week-by-week analysis; they may help and inspire you as you plan for 2012.

In the coming year, those who do not understand the dynamics and potential of the technology industry will find themselves operating significantly behind their competitors and cross-industry peers. Here are my ten best practices in the form of pragmatic advice and words of wisdom for you to consider as you think about 2012 and how you engage technology for your organization.

Have Patience – Technology vendors can mask the full value of their products by their marketing efforts, and impede your understanding of the products’ usability by their sales efforts. Take time to see if your existing or potential new vendor will provide you the communication and detail you require. In addition, be more patient with your business and IT staff to ensure that both parties are focused on what they should be doing and not squandering their resources by implementing initiatives beyond what is necessary. Our research has found that those who collaborate and find the fastest and smartest pace of action gain the most value in the end.
Be Skeptical – In 2011, marketing themes ranged from support for mobility to having the line of business and vertical industry software that is right for you. Be skeptical; demand to talk to someone who really understands your line of business area, or ask to try the offered software on your mobile device. Today I see more hoopla in marketing than I have seen in a long time, along with technology vendors who are not able to provide a subject matter expert for which the vendor is proclaiming the ability to help you in a specific business or vertical industry area. Marketing in the absence of expertise is useless. If something in a vendor’s marketing materials is not self-explanatory, it is probably something that is not well-thought-through. You should be skeptical and demand more from anyone trying to sell you technology.
Cloud Computing is Not Easy – Being able to quickly sign up for and use applications that run on the Internet is exciting, and the simplicity of pay as you go can help in the short run, but don’t forget to consider the questions of management and integration on an ongoing basis. There is no free ride to technology, and the sooner you plan for the ongoing manageability and potential scaling out of cloud computing through integration of data and processes, the better off you will be in helping your organization be fast but smart in meeting its business computing needs.
Mobility is Critical for Future – Many organizations are keenly aware of the number of smartphones and tablets in business use, some of which are purchased by workers and not the organization. Even more frightening is the lack of support by organizations for embracing this technology and making available critical applications and tools to simplify business tasks and operations. Organizations that embrace and extend workers’ use of mobile technology will not just improve in productivity but in the respect of their workforce for the organization. The cultural importance of engagement with mobility will be a key driver in the retention and acquisition of talent in the workforce over the coming years.
Have Alternative Technology Plans – It is always good to have a backup plan for anything in life. If your existing technology provider disappeared or ceased making improvements, what would you do? The majority of organizations just accept status quo and do not examine alternative choices among vendors and products. Some managers feel creating a backup plan is too expensive or time-consuming, but have done no real analysis to determine what could be best for their organizations. Many organizations are still paying maintenance on products originally rolled out years ago that are simply not going to catch up to newer alternatives and enhance the productivity or engagement of their workforces. We have seen this in every niche, from human resources management to sales force automation to business intelligence. Look at alternative choices and backup plans, then determine whether you need to take action to mitigate any risks affecting your technology-dependent operations.
Question Conventional Wisdom – Just because you have always done something that way, or because everyone else appears to be doing it, does not make something the best path. So often I have seen organizations assume that their current CRM provider is the only way to go, without considering what needs to be done to support the best possible customer experience. The same thing happens with HR and Financial Systems and ERP and – well, you name it. Challenge the status quo and look for what you can do that might save an hour a day in time, thanks to more intelligent applications, or save ten customers a day, thanks to better insight into what they need or what they think about your organization.
Never Accept You Have It Figured Out – No matter how smart your organization believes it is with its business and IT teams, the reality is that the use of technology for increasing efficiency never ends. We have seen where many IT organizations thought a single RDMBS and provider would satisfy all their information needs – until they realized that using Hadoop for specific applications saved them processing time and money. As soon as you think you have it figured out, you start falling behind when it comes to new technology that can be applied to your organization.
Seeing is Believing – I have seen some pretty pathetic marketing of technology in 2011, where any level of detail about the products was completely absent from the vendors’ websites and not accessible on social media like YouTube. I’ve seen mobile applications that supposedly work on smartphones and tablets but are not available in the Android, Apple, Microsoft or RIM application stores, and without demonstrations on the vendors’ websites to try it yourself. If you are not able to find real information about a vendor’s products, or see demonstrations that show the software, move on to the next vendor. Usability is the most important evaluation criteria across all of our benchmark research in 2011, and if you can’t see the products in detail before you pay for them, it’s probably because they are not particularly usable. Life is short, and so is your time, and any vendor that is not able to provide information about its products is probably not taking you seriously as a potential customer.
Your People and Workforce Matter – The key to staying up with technology and using it to your advantage is having the right team of folks across business and IT who can put together the best possible path forward. I have seen cases where the IT team or business analysts across line of business get little to no kudos for their contributions to helping improve the organization’s use of technology. Make sure to recognize and reward these teams, since they are the ones that your organization depends on for applying technology for your business. Also look at where technology can make your organization not just better but a more fun place to work.
Think Hard About Your Vendor Partners – The growth of technology adoption in 2011 exceeded many people’s expectations. Those vendors that best articulated how their products saved time, utilized resources efficiently and offered financial savings potential grew, compared to those that assumed their size and brand would get them business. Our benchmark research shows that the belief that large vendors are always best or that smaller vendors will not survive is a myth. Remember that you are investing in your vendors’ ability to meet your future needs. You might not think about your technology vendors as partners, but they should be just that. The faster you see them not just as suppliers but as contributing factors in your organization’s performance, and ensure you get more demanding and selective in who you work with from quarter to quarter, the better off you will be in making the best of your technology investment.

Ventana Research will celebrate its tenth anniversary in 2012. As we close out our first decade of service to a community reaching 250,000 professionals, we have learned a lot in applying our own research and best practices to our firm. With our fairly priced on-demand monthly subscription to our advice and research, along with our education and benchmark and vendor assessment services, we have been able to continue growing our research and team. We also introduced the industry’s largest leadership awards for the use of technology across business and IT in our Ventana Research Leadership Awards to ensure that both organizations and technology vendors are recognized. You did not find this level of consideration or investment from other analyst firms who are quick to get a new customer but lack any follow through on in-depth research or analysis and recognition of those that use it.

We also in 2011 migrated all of our business and information systems to the cloud, eliminating the need for any dedicated on-premises and company-managed servers and software. Our cloud computing applications include but not limited to community software, content management, electronic mail, file sharing, financial management, marketing automation, project management, website and workflow. While this migration has had its challenges and bumps along the way, the simplicity and utility of cloud computing has given our small business better insight into the advice we provide our clients.

We have many new initiatives to expand our business and research in 2012 that will make it easier for you to get education and information in the timeframe and context you deserve. You will see more and not less from Ventana Research in 2012, and with your support we can continue to raise the bar on objective and independent research. I hope that you demand more from your industry analysts and firms you do business with to ensure you are not receiving mediocre advice based only on opinion or just the IT lens since you will need a lot more to be successful.

Thank you for being part of our readership and community of professionals. I thank all of our clients and partners, who made this all possible. Also thanks to the industry analyst relations professionals who voted that I was the #1 industry analyst in enterprise software as validated by Institute of Industry Analyst Relations; my humble regards for this honor. My best to the entire workforce at Ventana Research, who continue to believe in our mission and without whom we would not be able to continue to demonstrate the value of technology analyst firms that pride themselves on research and timely analysis to educate business and IT.

I wish everyone a Happy New Year and look forward to a great 2012!

Regards,

Mark Smith – CEO & Chief Research Officer

New Benchmarks Started in 2011
Big Data; Business Analytics in Government; Business Analytics in Technology;Business Planning; Customer Relationship Maturity; Customer Service Agent Desktop; Customer Feedback Management; Fast Clean Close; Governance, Risk and Compliance; Information Management; Next Generation Workforce Management; Operational Intelligence; Predictive Analytics; Product Information Management; Sales Performance Management

Management decision-making typically involves a three-step process of inform, analyze and act. In the earliest days of what came to be known as business intelligence, developers created decision support systems that provided information and analytics to help executives and high-level managers choose the best course of action. Working with numbers rather than gut instinct still is viewed as a best practice. After all, a pilot who doesn’t trust his or her instruments is heading for an accident.

Over the past couple of decades, crude, expensive corporate information systems have become more comprehensive and affordable as organizations collect broader sets of data from a wider range of functional organizations and processes and apply more sophisticated analyses to these data sets. Today, dashboards and scorecards are pervasive even in midsize and smaller companies. Yet alongside the explosion of data available to executives and managers and the tools to make sense of it, there is a stark reality: It’s not enough to know; action is required. This isn’t news to people who have to make those decisions, but most of the software demonstrations I see stop with the “inform” and the most basic part of the “analyze” stages of the three-step process. These sorts of vendor presentations assume that this is all decision-makers need to make consistently good decisions, but from my perspective this level of capabilities falls under the heading of “necessary but insufficient.”

More is needed and, happily, more is possible. Most organizations use analytics to make sense of the past. While this is useful, it also is not enough to be actionable. Addressing shortfalls and capitalizing on successes are a good first step, but these are essentially reactive approaches. Having a better understanding what might happen in the future and weighing the implications of potential actions is more valuable to a line manager or an executive looking to steal a march on the competition. Today, to address these shortcomings, more powerful business analytics are becoming accessible to generalists. New computing architecture (notably in-memory processing) is making it easier for companies to do more interactive and collaborative contingency analysis and planning to explore the implications of future actions.

For several years Ventana Research has been providing research on and stressing the importance of using predictive analytics. Predictive analytics helps enhance the accuracy of forecasts, often by detecting unseen drivers of results, giving companies greater precision in projecting future sales, expenses and operating results. Predictive analytics also provides a baseline set of expectations that can be used for early detection of departures from expected results. At the start of a holiday selling season, for instance, such departures could signal the need for early discounting or (if still feasible) allocating a product in high demand to the best customers. Predictive analytics also can be used to manage supply chains and to project cash flows more accurately.

Leading indicators are another tool that companies use less well than they could. Especially in the areas of demand analysis, supply chain risk and cost projection, such indicators can enable companies to anticipate future changes in markets and gain additional time to develop contingency plans or alter strategy.

Contingency planning and what-if analysis give people the ability to make better decisions more consistently and with greater agility. Thinking about pilots again, they use simulator training to help make the right decisions faster in the event of an emergency. This sort of planning can enable executives and managers to react sooner and with greater confidence when conditions change and even help determine how best to modify strategy or tactics in a volatile business climate. However, most midsize or larger companies have found it challenging to do contingency planning because technology limitations have made it impractical to do except at a very high level. This sort of planning is best done interactively in a collaborative setting. Until in-memory computing systems were applied to this process, response times have typically been too slow for many enterprise systems. If desktop spreadsheets are employed, it can take hours or days to recreate a scenario with a couple of changes in major assumptions.

It would be great if action-oriented decision support systems also provided the framework and capabilities for people to work collaboratively to follow through on decisions once they are made and to track the necessary follow-ups to see the process through to completion. Only with these capabilities could a system rightly be characterized as “closed loop.”

I see performance management, business intelligence and analytic applications becoming increasingly action-oriented over the next three years. Information technology can be of greater value to executives and managers in supporting their assessments and decision-making, and ensuring follow-through once a decision is made. But I question how long it will take before using the technology to do this becomes a standard feature of business. Some technology-inspired changes in behavior have happened rapidly over the past decade, but these have mainly been on the consumer side. While business computing has spurred changes in how organizations work, most businesses have been focused on efficiency by automating processes or eliminating the need for middle managers to coordinate activities. The kinds of changes to, for example, corporate planning that are now feasible require companies to set new expectations for planning and to alter how they plan. Although I believe the need for change is compelling, I fear adoption will take longer than it should.

Regards,

Robert D. Kugel – SVP Research

Month: December 2011

Today’s Companies Need Action-Oriented Information Technology Systems

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