As I was driving in my car recently, listening to CNBC, the analysts were in a heated discussion regarding the mortgage crisis and falling credit markets. As I listened, I remembered that when I bought my home interest rates were at an all-time high, mortgage rates were at an all-time low and many people were being approved for more money than they could afford. Our mortgage broker was advising us to purchase a 5/1 ARM because our strategy was to buy a home, build some equity, receive tax benefits and then, in approximately five years, scale up. At the time, this plan made sense, but my business acumen told me otherwise. I had to make a big financial decision due to a contingency in our offer.
My situation was no different than what any CXO faces in making important business decisions. First, I had to develop a strategic plan. Second, I needed a number of data points, both structured and unstructured, to drive the decision. Finally, I needed the right tools to integrate the data points and present them in a format to provoke thoughtful decisions.
Create Data - Dont Look For It
Many organizations face the challenge of determining what the right data is and where to find it. Our traditional systems - enterprise resource planning (ERP), mainframes, data warehouses and business intelligence (BI) applications - are the most logical places to start, but they dont always provide a complete picture. I like to think of traditional information management platforms as being designed on the premise of reactive information engineering or, simply put, gathering data to answer an unexpected question. An analyst will consider data in a BI application to identify variances that will be researched further in a reactive manner. This could lead to days of hunting down colleagues, analyzing other data stores and building new reports with the appropriate commentary needed to present an opportunity to senior management. In most cases, this will likely foster new questions resulting in repetition of the whole process.
When deciding on the right mortgage, I had the basic data I needed: current rates, gross income, current expenses and annual budget. What I didnt have was the unpublished social data originating from individuals in a similar position. I went online and created discussion topics and blog postings that drew in various perspectives, which helped formulate my final decision. I wanted to know what the majority felt the market was going to do, what people were experiencing and what influencers could have a direct effect on their decisions. I think of this as the practice of creating data to answer the questions you dont know to ask, in other words, proactive information engineering. In last months column I used the analogy of searching for data in traditional information management systems being like trying to find needles in a haystack. While it can be daunting to search for data points amongst various consolidated or disparate data sources, this can be simplified by allowing data to be pushed as opposed to being pulled. Leveraging blogs on a corporate Web site or building customer community forums for your product lines will generate valuable data and create the needles you require, thus eliminating the need to go searching for them. Most importantly, new data points will surface to answer the questions you may not have thought to ask.
Integration Made Simple
The appeal of Web 2.0 technologies was predicated on simplicity. They are easy to use, setup is not difficult, and Really Simple Syndication (RSS) standards have made the integration of Web 2.0 data pretty much as straightforward as you can get. Most Web 2.0 technologies have open application interfaces (APIs) and the RSS capabilities simplify the integration with your information architecture. This avoids having to deal with a new standard or proprietary format.
The Right Technology
Its clear that the Web 2.0 market has boomed, and there are more vendors, technologies and gadgets out there than one can count. The key to determining the right technology for you is to align the technology with your core business functions. Looking at each function and the associated actions will help drive decisions regarding the appropriate technology, as depicted in Figure 1 (see PDF below).
Making thoughtful decisions in todays world becomes easier when three basic principles are followed:
- Generate data through proactive information engineering.
- Leverage APIs and RSS to simplify Web 2.0 integration.
- Align technology with your core business functions and actions.
Looking back at my mortgage situation, there were a number of factors to consider and only one right decision. Complementing Web 2.0 data with traditional numerical data guided me to what I believe was the right decision. Since I bought my home, rates have gone up and housing prices have plummeted. I can sleep at night knowing that with a fixed rate mortgage I can stay where I am and move when Im ready - not when the market forces me to. Results arent driven by luck; results are driven by having the right strategy, the right plan and the right information - both structured and unstructured.
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