Vineyard Business Intelligence

What�s new in version 1.2.1

Admin — 2010-07-25T02:26:43+01:00

It's almost time to unveil Viney@rd version 1.2.1. It includes a couple of new features which were true open points for those who work with Excel. Our target is to make their life easier an easier and this is the compass we follow for improving Viney@rd.

The most important feature is the subtotal feature. It builds on the corresponding Excel feature (remember, you already bought it, I do not want to sell it again to you!) to let you define a subtotal level and an aggregation function directly on the query form. The query result set will be broken like you selected it and applied the subtotals yourself directly in Excel. Even the outline will be there, to close and open details.

The second feature I implemented is assigning a name to the area occupied by the query result on the worksheet. These names appear in the upper left drop down command and let you select the areas where your queries have been placed. So queries output can be identified more easily within the workbook. Now it's not actually a feature, but I also used a new set of better looking icons in place of the older ones, which had problems with the transparent background.

As usual, version 1.2.1 too will be available for testing before the official release, so stay tuned!

In the meanwhile, it's not a bad idea playing around with the current version, download it here It's fully functional and free for 90 days!

Inverted Occam Razor Principle

Admin — 2010-07-15T00:45:57+01:00

You know me. I usually do not lean toward deep philosophical thoughts; I'm rather the average Joe type. This time, on the contrary, I'm going to start from two Jeffrey Pfeffer's deep and insightful articles from the Harvard Business Review to derive what your grandpa likely told you many years ago. My contribution will be dropping in a smart idea or two.

Jeffrey Pfeffer in this piece about power in the company environment and in this other on caring about own career, makes some hard points about life in a company.

The corporate world (and the world itself) is fundamentally not just.

The quality of your career depends fundamentally on your political skills.

If you do not take care of yourself, nobody will.

If you do not defend yourself, you'll be attacked.

In other terms, the entire idea of "do good and you'll be rewarded" is fundamentally wrong.

As a European, probably, I'm more prone to accept those points as facts of life and not to ruminate about them.
I started long ago to successfully apply my personal "Inverted Occam Razor" principle: if a fact has two equally viable explanations, the wicked one is true.

If these principles are true, there's an unintended consequence: the better your career is, the stronger your political skills are.
Unluckily, those at the top should be those who better understand a business and have clear ideas on how to make it prosper. The system, from this point of view, is fundamentally flawed, giving power to who has skills which are not related at all with the good, wise and cautious business management.

As in all human things, there are exceptions. Maybe they're not so few but I believe that Pfeffer depicts the "standard scenario" of the western corporate world.

So: what you, a small crank in a huge machine, can do to make your work life better?

Simply get out of there.

There are a lot of ways to make a living without a job in a "Darwinian on steroids", soulless, company. They're often a good place to learn how business can be run (from the lower layers, of course), to specialize in a field and to acquire experience of the world, but you didn't marry it.
After some years in a company, usually a good move is going solo. Just use what you learned to create your own business and start moving at your pace, according to your rules. Many did that, and there's surely an alternative for everyone pursuing it. Personally, I'm not there yet, but, as you know, I'm well on my way.

No use to say, if you're the kind of person who values corporate career above everything, please, move on and you'll be welcomed by the community of your peers.

This takes us back to the initial point. I'm pretty sure your grandpa, once, put his hands on your shoulders and said "My son, do not waste all of your life working for someone else like I did."

My one did it, and he was right.

Sneak Peek at the new web site

Admin — 2010-07-07T18:42:35+01:00

This is a very very primitive idea for the new site. Please, feel free to express your opinion! I'd love if the site were the outcome of shared ideas!

Slicing and dicing the income statement (4), costs

Admin — 2010-06-25T02:21:52+01:00

We have seen all the main issues regarding the high section of the P&L statement. We have learned that each and every line should be analyzed according to responsibility criteria. We have also seen how measures should mimic the sales events.
Now it's time to go below the net sales value and see what to do with costs.

There are some different approaches on how to structure costs in a P&L and, once again, they depend on the company business model. The implementer is given a list of measures in a specific sequence, but what's the rationale behind that? Usually the cost structure follows two guidelines: identify some levers the management can pull and spot external events which are not under management control but influence the margins.
We'll be discussing costs for many posts, because a large part of the managerial accounting doctrine is about cost control. Rather than doing a long theoretical introduction, we'll see some commonly used costing models.

The easiest costing schema is listing direct costs first and indirect costs down the row. Direct costs are those which can be directly traced to a product. The cost of raw materials used to manufacture an item, the cost of the people who manufactured it is a direct cost. These are usually very easy to calculate. If they're not given, a simple division will get the result. The cost engine of many ERPs does the job easily. Indirect costs are all those costs that can't be traced directly to the single product. For example, the plant director's salary can't be traced directly to a product. To associate them to a product, a process called "Allocation" must be applied; we'll talk about that in later post.

Actually a cost can be defined as direct if it can be traced to a "cost object", that might be a product, a unit of service or even an employee. The same plant director's salary becomes a direct cost if we refer to the employee.
So, why are we talking direct costs to product? Because the product usually defines the lowest detail level in the orders or invoices which aggregate into the P&L. As said before, the ultimate purpose of a P&L is to evaluate a customer's or a product's or whatever's profitability. Attach a cost to the product and you'll attach a cost to every invoice row. It will easily roll-up into aggregated costs.
Note that the role of the product may be taken by whatever takes its role at the lowest sale level. It may be a working hour for a specific professional figure, a 30 seconds clip on the local radio and so on. You should always have somewhere in the company systems a table that says "sold n items of the x thing", and x is the object to refer the costs to.

What are the most widely used direct costs? As usual, it depends on the business model, but let's try to do a list with the usual manufacturing company in mind (we'll have different examples in the future).

Commissions: they're often calculated as a percentage of the sale, so it's easy to associate it with the product. There are more complex environments but, ultimately, they're linked to "what" is sold, that is, the product.

Cost of goods sold: these are the costs related to manufacture (or buy) what is (re)sold. They are usually split into: Materials: raw or semi-finished purchased to manufacture the product. Given the product components, these can be precisely defined. Usually they're calculated by the ERP cost engine. Machines: the cost of running the machines for a single product item. These are harder to calculate but they're usually pretty linear with the production. A limited cost accounting process may be necessary to define them but often few divisions are enough. Manpower: these are the salaries of the people who are directly involved in manufacturing the product. Given the time spent to produce a single item, those costs are easily calculated from salaries.

Freight: it's a direct cost because it refers to a specific transport, but it may be difficult to calculate because of the freighter pricing. Usually, some simplifications offer a good approximation.

These costs are often used because they're the easiest to be calculated, and they're already somewhere in an accessible format. These are also the old school costs because they relate to levers easy to pull.
Is the workforce cost too high? Let's pay less those dawdlers or make them work faster!
Are components costs too high? Let's grab suppliers' ties and pull!
Are machines too expensive? Let's keep working with the old steamers!
I could go on but I imagine that the concept is clear.

See you next time!

A Bucolic Parenthesis

Admin — 2010-06-23T17:00:58+01:00

Today I leave aside Excel, BI and other technicalities; I feel like talking about interactions on the internet.
Did you ever notice how, on the web, everyone is so kind? Comment on a blog you'll be acknowledged. Retweet a link and many will politely say thank you.

On the web I came in contact and interacted with people who, in person, I'd never even try to speak to, like Gary Vainerchuck, Robert Scooble, Seth Godin or Claudia Imhoff. They all spent some time discussing with me about different issues on social media or by e-mail.

This is exactly the point, why people, who are usually overworked, who are somehow a star in their field, can be so friendly through the Internet? Why do they bother?

I think I have a good, albeit not exhaustive, reply to this question.

The Internet lowers the physical barrier. All the nonverbal part is left aside and the naked content is exposed. One can immediately realize who's talking to from many nonverbal signals, from the context and the behavior. The communication tone is set from there and, sometimes, there's no communication at all.
On the internet, on the contrary, only content matters. I'm replied or not depending on the level of the insight I put into my communication. I'm replied or not depending on the quality of what I have to say. In real life, I may have an essential point, but my voice is lost into the crowd.

So, if you think that I wrote some quality content, let me know your opinion!

Excel School

Admin — 2010-06-17T11:22:11+01:00

I recently learnt that the famous Excel Blogger Chandoo has a new initiative. He set up an Excel School.
http://chandoo.org/wp/excel-school/
This guy is an Excel MVP but his style is what makes the difference. He's light, simple clear and to the point.
If I needed some Excel training, chandoo.org is a place I'd consider.

I'm not affiliated with Chandoo.org, this is simply my opinion, based on what I read on the site.

The Income Statement (3) the sales events.

Admin — 2010-06-08T01:05:58+01:00

At the top of P&L tower sales. This is the starting point for each and every analysis. Then you subtract the costs and get the margin, right? Wrong. What about the other sales events?
Better, what is a sales event? There are four main sales events, the orders, the returns , the complimentary offers and the giveaways.

The orders, or better, all the documents that start from quotations to invoices are the main event, these provide the actual revenues and are quite commonplace. I'm sure you already know many ways to implement them in a datamart. I'm not going to teach you how to work with them.

Returns are technically related to orders or invoices, as they're often implemented like an invoice or shipment with negative quantities and values. They're also a cost because there's no profit associated with them and money will likely be returned to the purchaser. Processing returns is also an extra cost, unforeseen at the beginning. What's the correct value for returns? What does managers expect on that figure?
The simplest way to calculate returns value is just getting the associated document values. It is a direct subtraction from revenues, so it perfectly makes sense. A more sophisticated approach might include the related returns handling and freight costs, if they can be identified. They're direct costs but, if lumped together with the equivalent costs for orders (we will meet them in a coming post), may cause indicators and averages to drift.
A totally different game is about, which returns should be included in the P&L and which shouldn't. A return caused by product defects should not weight on the sales manager shoulders. A return caused by a mistaken shipment should be accounted to whom made the mistake. The P&L for the general manager should include all the returns. As you can easily imagine the same responsibility principle seen in previous posts apply here. Depending on who consumes the data, the model must be different.

Complimentary offers are indeed a sales event, usually they produce orders whose lines are zeroed or the sum is discounted by 100%. They must be subtracted because they're a cost directly applied to the customer which is presented with something free. The point is: what value should I place there? If you have, somewhere on the originating document, the price value of the free item, the temptation to use it is irresistible. Unluckily, it's almost always wrong. These are not lost sales to be subtracted from the total amount, these are costs (or investments?) incurred to "please" the customer, help it selling your stuff better or any other promotional purpose. Likely, there was no chance to sell these items in the first place, they are not "fake" sales. So the right way to give a value to complimentary offers is at cost. That is, the cost of having those orders through the door must be compensated by actual sales.

Giveaways may look like the same as above, but they're not. They're something that you give away because the customer already purchased something else. While they still can be considered as a sort of investment to keep the customer happy, they are sales intentionally missed. That's why they can be set at price value.

This schema is not universal and depends heavily on the specific market. The key concepts of responsibility, cost and price valuations, freebies to make sales and freebies because of sales made, though, can be applied in every market.

There are some other minor events that should be taken in consideration: financial credit notes and, very rare, other financial documents. These two occur when there's a money exchange not related directly with an exchange of goods and services. They cover various events and, sometimes, their amount is proportionally high enough to be taken into consideration in the P&L. Like for returns, the reason why the note has been issued guides the model implementation.

This is it for now. See you at the next post of the Business Analysis storyline.

photo courtesy wadem

Is your company balanced?

Admin — 2010-06-02T11:58:12+01:00

This is a leap forward along the Business Analysis storyline, but I recently wrote about it elsewhere and I realized that this simple model can be of great help for startups. I'm going to talk about your company balances, but not in the terms you're thinking.

Have you ever thought about what can kill your business? I'm sure you did many times. Actually there are 3 easy concepts that can help you assuring the long term wealth of your company. These are 3, rather simple, checks you can do to verify the chances your business have to grow and prosper.

A business is financially balanced (in financial equilibrium) if it can pay all the bills when they are due. You should be able to pay for whatever you need to keep the company up and running (including debt) with your ordinary activities revenues. Any imbalance means that money must be harvested, from banks, investors etc, to keep the company running. Protracted imbalances may lead to a cash crisis that can actually kill the company. To be sure not to incur into financial imbalances, you have to forecast and constantly update your cash flow statement for the months to come. How to build a cash flow is beyond the scope of this article but we'll see it in the future.

A business is economically balanced (economic equilibrium) if there's a margin after every cost has been accounted for. This is not the same as before because you buy raw materials today, use them after one month, sell after two and cash in after three; this is often referred as the monetary cycle. All these activities, albeit distributed in time, are all related to a single unit of activity. In other words, disregarding the actual payments, we can make an estimate if every company activity is profitable or not, if it produces a positive margin or not. Your company as a whole, for each month of activity, must produce a positive margin. If your margin is red, cash flowing in from previous periods can temporarily compensate, but you risk to fall back on the case above.

Note that you can have a continuous row of positive margins but hit a cash crisis, because an unforeseen expense has lowered your cash or an important customer has delayed its payments. You can do everything well and still have cash problems. This is why the financial balance is more important than the economic balance and must be carefully safeguarded.

The third and final balance is the equity balance. A company has been founded upon an amount of money. In the medium/long term, the company must repay this equity in terms of dividends. The overall interest rate on the equity should also be higher than other investments to remain a viable option for the investors. This measures if the company can be profitable in the medium/long term. If every income cent is invested back in the company to make it grow or for R&D, nothing is left to pay the investors which, in turn, invested in a view to gain money. For a small, family owned, company, keeping it running is enough to make a living but, for larger companies, this may be a crucial, long term parameter.

So, when reviewing figures, start thinking in terms of the three balances, and let me know if you discover something new.

Take care

Slicing and dicing the income statement (2), Sales

Admin — 2010-05-24T22:35:30+01:00

I'm sure that you often had to do with sales data marts. I'm sure you designed, implemented and reported against it many times. Actually, sales and margins are often the first business areas to be covered by a BI implementation. Sometimes accounting leads the pack, but usually sales are the first subject on the list.
Implementing sales is somewhat easier than other datamarts because the granularity is almost invariably defined by the sales events. That is, each line in your fact table will likely be an order/invoice line.

Defining what dimensions to add is rather simple. We'll have customers, products or activities, sales force and many dates; plus a bunch of minor or degenerated dimensions.
Conversely, defining dimension structures is not trivial at all as their layout greatly vary with the specific business. A shop order company works differently than a consumer packaged goods company, which, in turn, is different from a consulting shop or a resort business. There's no point in describing all the possible attributes for every business, but there are few criteria which should always be met because your business users will likely need them.

The company will have various level of commercial responsibilities: there are going to be product managers who take care of a product line and area managers who deal with a group of customers or channel managers who deal with a sales channel etc. Sales must be sliceable according to this group of responsibilities to adhere to the business vision the company has adopted. Each level of responsibility must be provided with its own data.
This is not as easy as it may seem. First, not all the aggregation levels required are necessarily defined into source systems. While each customer is assigned to a salesman, maybe a dummy one, areas may not be defined as well. Sales force may be an unbalanced hierarchy, thus adding a further complexity level. This is when external, manual, data must be added to the datawarehouse.

In some cases, some very complex responsibility schemas are implemented. A single position might control sales of a product group for an area, but all the products for some customers. That is, data might have to be sliced through different dimensions to comply to sales responsibility. Often BI clients can accommodate this, but defining an appropriate, mixed, dimension can also be of help, especially in defining specific KPIs.

I'm not done with the highest rows of the P&L, there's another topic about sales structure: how to organize the sales events. But I save this for the next post.

A Video is Worth 10000 Words

Admin — 2010-05-18T22:30:20+01:00

It' s incredible the amount of feedback a video can have.

I've always been reluctant to resort to videos because they always imply oversimplification.
More, they are complex to build, especially if you do not have the money for a decent video editing sw, a professional speaker and you are not a native English speaker.

Anyway, I've been asked about it by a few people and, at last, I made it.

First I made the configuration video because many non techies users demanded for more clarity about. Now Viney@rd setup places a link to a specific web page that describes the configuration process in detail and hosts the video.
Then I made the query basics video that shows an appropriate, though partial, Viney@rd scenario and I placed it on the site home page.

What's amazing is not the number of visits, few tenths, but the amount of feedback I got from it.
Many Tweeps and FB friends just spent few minutes of their time actually watching it and commenting about. I actually asked for a couple of opinions or three, but many commented spontaneously. Ladies and Gentlemen, thank you for your attention.

Actually almost everybody complained about the sound (I know, but apparently I can't find a budget but decent microphone, I already tested four) and few about the overall impression. Many others liked the "authenticity" of me speaking.

At this point, I'm bought. I'm going to do a better demo asap and keep working on video tutorials and manuals.

A video is really worth 10000 words, but I said much fewer!

Four Reasons Why People Love Excel and IT Departments Hate it.

Admin — 2010-05-13T18:08:32+01:00

I love Excel, I think it's pretty obvious. I'm not alone, millions and millions of people around the world use it too and, more or less, love it. The vast majority of these people use it to work on, manipulate and display data of all kind.

What's strange about Excel is that the very reasons because it is loved by people are the same reasons why it is execrated by IT professionals.

At the grassroots of MS Excel diffusion is the idea of control. The user has data on grids and worksheets; these can be manipulated down to the single cell, organized at will, formatted as they prefer. Total freedom. Maybe only a fraction of this freedom is actually used, but having it is reassuring.
The IT has mixed feelings about total control. It may be an escape hatch when there's no time or possibility to do the job but, on the contrary, who knows what users can do with all that freedom? How can be assured that those data are "right?".

The other pillar of Excel success is ownership. The user owns her data, once they are on the file. She can do everything, and she's the sole responsible for that. No one must be contacted before rounding figures or cutting corners.
As before, the IT professionals are concerned of users making "unapproved changes" with no previous notice, or creating "unofficial versions" and spreading them all over the company.

The third element is collaboration. I'm not talking of Groove or other similar tool, I'm talking the ability to pack all your work in a file and e-mail it. You can broadcast your work that easily, with a system that everybody is familiar with and, from the user perspective, is extremely manageable.
The IT, of course, has concerns about data version proliferation, security threats or even attachments size.

The fourth element is the "Swiss army knife" attitude. Excel extreme freedom sometimes (or often) gives rise to complex environments to make the job of a specific application. These may be complex and prone to break but, at last, they are tailored exactly on user requirements and are user controlled.
These creations are sometimes kept secret, because the IT would merrily use a flamethrower on them.

So, there's a clash of visions around Excel that, ultimately, have roots in different visions. For business users, the whole damn computer thing is a matter of tools to do the job and Excel, for the knowledge worker, is a powerful tool. For the IT department, everything stays inside a process, one of the many which live inside a company.

Is there an equilibrium somewhere between these two contrasting visions? Yes of course! Or, maybe, not. Excel is here to stay; even the Gartner Group, recently, gave up to that, in a certain way. Currently software connects to Excel to export data and, sometimes, to import from it. This approach draws a borderline between the orderly and well organized world of business applications and the wild territories of personal computing. Usually the IT stays entrenched on the border and reluctantly raids the unknown territory outside.
Users happily work with their Excel files but, sometimes, feel that they need something more automated and more organized. It is on this requirement that a cautious encounter may take place. What we need is a new generation of applications which interact with Excel and tackle or ease the issues mentioned above. With Viney@rd I'm giving a contribution in this direction, there are some others who are working along the same lines. The future appears to be interesting.

What do you think about?

Photo courtesy of recycledstardust

Slicing and dicing the income statement (1), organization

Admin — 2010-04-29T00:16:36+01:00

This is the fourth post dedicated to business analysis for BI consultants. The series start here.

In the previous post we saw that the Income Statement may have multiple forms (and even multiple names, because it is sometimes called Profit & Loss statement, P&L). An Income statement suited for management purposes shows costs related to the company operations, usually splitting them among direct and indirect costs. So far, we have designed a companywide Income Statement while management often needs data at a lower level. So you'll be asked to build a sliceable income statement. I'm sure many are familiar with the idea; from a technical perspective is "just another dimension", but what are the business perspectives tied to those dimensions?

Considering the company as a whole, two kind of dimensions come into play: business line and business unit. The business line mirrors a specific internal organization upon different business. Consider a company which manufactures bulldozers. It runs two entirely different businesses: the dozers business (with salesmen, expositions, advertising, large customers and small owners etc.) and the spare parts business (with country repairers, inventory turns, urgent calls etc.). No use to say, these are very different organizations with different people with different operations and mindset. Nonetheless, the two lines use some common services, like accounting, human resources etc.

The business unit is the radicalization of this concept or the result of an aggregation of more than one company. Business units are practically companies of their own. In fact, a business unit is often defined such by having its own P&L statement whose format can be different from other business units. What's important to understand, in our perspective, is that two business lines or two business units may greatly differ for the others dimensions. Just think to the bulldozers example, they indeed have a different sales force and an entire machine is likely classified rather differently than a spare part.

There's a third concept that many "Db Wizards" do not even suspect it's there. We talk about business and sales, hearth movers sales, spare parts sales an old machinery sold as second-hand toolsets. What distinguish the first two items from the latter? They are all sales, aren't they? Yes, they're sales but getting rid of old machinery is not part of the company everyday operations. A managerial P&L tracks only the ordinary activity, the company income statement tracks everything. One of the requisites for the company to thrive is to have a positive bottom line for the ordinary activity.

So far we haven't reached even the first line of the P&L statement, usually sales. In the next post we'll discuss how to slice and dice sales.

Why you should get an MBA

Admin — 2010-04-15T01:25:36+01:00

I break the Business analysis for BI consultants series for a post that has been inspired by a discussion on the well known Joel on Software forum. This post is a slightly developed version of my reply to the thread titled: Why you should unlearn your MBA

The thread starts recalling a David Heineimeier Hansson speech at Stanford University. Being the father of Ruby on Rails and 37 Signals, DHH makes a point in telling that what you learn from a business school is no use in creating a startup, at least a technology startup. Actually, it may be harmful; so it is better to unlearn it.

Along these lines, Guy Kawasaki, the famous venture capitalist and internet marketer, gives a speech on how only the real world experience can give the ability to manage; so attending a management school is of no utility .

I know that DHH and GK are well respected and I would normally listen carefully to their opinions. Those two guys really built something and they deserve a lot of respect when talking about technology business. Actually I see their points and I admit that there's an internal logic.

BUT,

in my opinion, this thing that getting an MBA is useless is a bad mistake. Better, all that chatter about you not using what you learn or that you can't learn things on books is plainly

BULLSHIT

I explain why.

1) Culture is not a tool, culture sharpens you perception of the world, culture creates a better you. So do not ask if a notion can be applied to your job or not, just learn it for the time you'll use it to understand a deeper layer of truth.

2) The amount of logical and abstract thinking required to fully grasp some of the ideas you'll learn at school is so high to improve your applied thought. I'm an aerospace engineer, I'm happy of having studied the turbulent boundary layer; it does not have anything to do with my current job, but it helps me in being better at it. I do not regret a minute of the days and nights spent on strange mathematics because it gave me the ability to extract the meaningful data from a pile of rubble.

3) It's not true that an MBA is useless in a small IT consulting firm, because the best way to relate with business line managers is talking the same language. The raw material of their decisions is often something explained at school. I talked extensively about it here.

4) It's not true that an MBA is useless in a small software shop either, because, if you target the B2B market, only the consultancy large vision gives you the exact feeling of how a software should be made. I started a company doing a piece of software that I wish I had in my projects.

5) If you are successful, your company will not stay small forever. If you do not necessarily need an MBA to run a small shop, that kind of knowledge becomes more and more important as your company grows. Financials, control or investments are not subjects where common sense provides a guidance good enough.

I could go on telling war stories about the damage ignorant entrepreneurs cause to companies, but I think this post is already long enough. So, if you chose not to get an MBA, make sure you'll learn the same things another way, but never stop learning about business!

A nice P&L statement

Admin — 2010-04-12T19:01:21+01:00

Here you can find a nice example of P&L statement for a software company, Qlik Tech, which is going IPO.

http://www.kellblog.com/wp-content/uploads/2010/04/qliktech-financials4.png

What's interesting here is the revenue vs costs breakdown. Each revenue item is a business line and each business line shows its own costs. These are not properly business units because there are a lot of common costs in the lower segment. The inner structure of those costs�deal are poeple costs, but their�internal breakdown may be a lot different. �

This pic comes from Dave Kellog's blog which draws an excellent picture of Qlik market and financial position.

How Managers Use the Income Statement

Admin — 2010-03-30T16:01:15+01:00

In the previous post we saw the classic, but I'd rather say the "accountant's" form of the Income Statement. Income Statements do not come always in this forms, there are many other forms, each one focuses on different company facts.

For example, in a manufacturing company it might look like this:

A manufacturing company focuses on issues like the manufacturing costs or the finished goods warehouse (it has impact on taxation and crystallizes money into something that sits on a shelf, but this is an entirely different matter).
Once more, this form gives an informative view on the company as a whole but does not tell a lot about what a manager can directly influence, that is, the operations.

Actually one of the first things that often go implemented in a BI project is a data-mart that gives you back something like this.

This statement appears to mix various things but, at a closer look, you'll find some interesting points.

First, costs are split between direct, that is costs which can be associated directly to the product sold and Indirect, which can't. This method is named "Direct Costing", we'll learn more later about that.

Second, note that each row is closely related to a specific function. In J&B computers there's someone who's in charge for selling HW, someone who sells consulting services, someone who checks that travel expenses do not balloon unexpectedly and so on.
This point is very important, the managerial income statement is split according to a principle of accountability. There should be someone who's in charge of the figures in a row. It's not the only principle, but the most relevant to understand why a specific cost structure is chosen.

Third, it ends with Margin and not with Income. Margin is what remains after all the costs and expenditures have gone into effect to produce the sales. Is it the same as the Income? Absolutely not, they're "cousins" but they are calculated in different ways. The margin tells you that the major ongoing operations produced more money than the amount burnt to produce the sales.
If you have a global negative margin, sooner or later you'll have to borrow money. If the margin keeps being negative, you're toast.

Be aware that the rows may vary, depending on what you need to keep an eye on. A manufacturing company will likely have a detailed production cost breakdown, even with some cost allocations. Others, which heavily use coupons and special prices may have those as a cost. Designing a managerial income statement suited to the company is one of the tasks those management consultants paid twice than you are appointed to do but that can be done just asking the right questions to management .

So now you see a report, and I know many among you already know how to implement it by their favorite BI tool. Before closing the post I just want to point out that this report sucks. It sucks because no number has a meaning if it is not compared to another number. It may be the budget or the previous year same period, but your report need to look like this.

Here 2009 and 2008 are side by side. For each year, each row shows the percentage respect to Total Sales. We already said that this is a scalar report, so a manager reads it to learn how many point are "eroded" by a particular row. This makes comparison non dimensional thus showing efficiency gains or losses. The comparison between the two years is made on the percentage points gained or lost.
For example the warehouse and logistics which handle the HW have slightly lost efficiency, having lost .2 point in 2009.
Administrative expenses have been well polished, because they are down a point out of 5 and a half in 2009.
If you have to choose an area to work on to improve margins, just work in obtaining better discounts from HW vendors because HW purchases make 40 points alone and they're up 3 point from 2008. This is the kind of analysis a manager does.
Now watch consulting labor, it is down 2.61 points, which sounds good, but consulting is down by 5.6 points, so you actually lost 3 points of efficiency! All of this, while total consulting value grew!
Anyway, everything summed up, your margin is up 3.53 points and the world is beautiful.

I hope I have given an idea of what managers do with your income statement. In the next post we'll see how to implement it and how to add dimensions to the analysis.

Stay tuned and, please, tweet this post for your friends and coworkers

If you want to be part of the Viney@rd 1.2 private beta program go here

If you want to try version 1.1 go here

If you want to learn something more about Viney@rd, please visit http://www.straysoft.com

Income: What Companies Live and Die for, or the Income Statement.

Admin — 2010-03-25T23:15:43+01:00

One of the most common user request is "How much am I earning?" This question is second only to "How much am I selling?". Often projects start just to have an efficient reply to these two questions.
Notice that the two questions are only superficially similar but an ocean lays in the middle . Let's start.

I'm sure you've been asked many times to create sales reports. They're important, but they describe only a fraction of reality. A company general manager is much more interested in different figures, that is the money left after paying what must be paid and collecting the credit.
As you probably know, the broad definition of this figure is:

Sales - Cost = Income

Reports usually do not have one row (albeit some widgets from famous BI players provide what's exactly one row of data), but are drawn in the form of the income statement. A traditional income statement, for a commercial company, may look like this:

Probably you've already seen this or something similar around or in a book. This is the classical income statement that the company CFO prepares at the end of the year. For example, find here the Microsoft Income Statement. You will likely not be asked to create this because the accounting systems already produces it and it is carefully adjusted by hand on Excel before being validated by the board. For a "no frills" detailed description you can go here.

Before moving on, nonetheless, there are two key aspects I want you to notice.

This is a scalar report, that is, starts from a value, subtracts other values, has intermediate totals and ends with a much lower value. The business meaning of this is that the Revenues are "consumed" by costs and expenses and what's left is the "money" (it is not exactly true but I skip by now) available to be pocketed or reinvested.

This statement refers to a whole year, that is, summarizes Facts which took place in 2009 or, somehow, pertain to 2009. The word "pertain", hides the accounting accrual concept. I've read very long chapters about it but the point you need to get is very simple: costs pertain to the period when the associate resource has been consumed.
Simpler: the cost of goods sold is accounted in the same period as the sale.

An income statement like this depicts company business in little detail. It's ok, more or less, for Wall Street financial analysts and it says that, yes, somehow, in 2009 you should end up with more money than in 2008; but does not tell so much about how actually running the business. In the next chapter we'll see what a chameleon the Income Statement is.

Stay tuned and, please, tweet this post for your friends and coworkers

If you want to be part of the Viney@rd 1.2 private beta program go here

If you want to try version 1.1 go here

If you want to learn something more about Viney@rd, please visit http://www.straysoft.com

Putting the Business back in BI

Admin — 2010-03-24T17:56:14+01:00

We've been talking too much about technologies, myself included.

There's a focus in BI community on the emerging trends of cloud computing, in memory processing, columnar stores etc. but the link with business requirements is weak.

In my experience of a life spent in small and midsize BI projects I've never found a business manager or an entrepreneur really caring about the technicalities of a solution. They see it as a black box where to pour an amount of money in to get back some capabilities, possibly to be translated into ROI.
The general mood is "do what you need with that box, I need the result". Usually it is hard to explain to a business user why she can't see the data formatted like he wants, if all those data are available; the usual reaction is "why you can't do something to get it?".

So, during the years, I've found myself developing a business management culture and getting more and more business analysis skills. Today, with few exceptions, my project documents are always business talks, focusing on business issues and describing systems to cope with it or to keep an eye on. The technical part is for the CIO who is often happy to let the consultant do all the dirty job of defining requirements and targets.
Someone says that the eye candy of modern platforms can make the difference and win a contract; I despise this approach, it's for the professional liar. I prefer showing the business people that I actually understand them and I can cater actual solutions. I seldom give demos, I prefer to sit and listen. I seldom write 300 pages of specs, I write 10 pages of business analysis and they're usually enough.

I do not have the experience of some of the people hanging around my blog, but I found this approach to be highly effective.
So I think that I should help BI consultants to better understand their customers. Understanding your customers let you build a better link between the tech requirement and the business requirement, let you serve them better and let you ask for higher fares.
Do not underestimate the amount of business knowledge required to set up a coherent management control system; for you, as a technician, some aspects are just reduced to "one more field" or "one more table", but they have deep business implications.

This is the introductory post of a series dedicated to business analysis for BI consultants.

The most correct choice is to describe the business environment in the academic order, like a university course in business analysis. Being practical, I'm going to start covering the topics in an order in which they are implemented or are important to know.

I assume that the reader has already an average knowledge of relational and olap databases and is familiar with the BI terminology and with the basic datawarehouse concepts.

The work is not completely unbiased and it will reflect my personal career. Examples will cover many economy sectors but not banking, insurance and investments in general because I have only a marginal experience on those. A different type of bias also comes from my experience on the Italian market, albeit often with internationalized companies.

Let me know if there's a topic you'd like to see covered.

I hope you'll enjoy the posts so I can keep doing the very clever professor who puffs his pipe and sneaks Viney@rd in!

In the next post, we'll start with what companies live and die for, income.

See you soon and, please, tweet this post for your friends and coworkers

If you want to be a part of the Viney@rd 1.2 private beta program visit http://www.straysoft.com/beta12.html

If you want to try version 1.1 go here

If you want to learn something more about Viney@rd, please visit http://www.straysoft.com.

Why things are like they are

Admin — 2010-03-15T22:56:38+01:00

Last week I had a discussion on UK Business Forums about Viney@rd. You can find it here .

Garyk gave me the opportunity to explain why some things are like they are in Viney@rd. This is an interesting discussion and I post it here, slightly edited

Garyk: "�so this actually builds the cubes in SSAS in the background? �"

Stray__Cat: "No, it does not build cubes in background, it works with the relational engine. This is done purposely for two reasons:
1) to support the free express editions
2) because the relational engine is known by far more people, consultants and end-users as well.

Garyk "OK so how will it do aggregates on dimensions if I say have 500,000 transactions spread over two years and I need periodic and yearly totals by several dimensions? Its alot of number crunching which is why the big BI solutions use cubes populated overnight or is it aimed purely at the SME market?"

Stray__Cat: This question requires an articulated reply.

Yes, you are right when you state that there's a step somewhere , depending on HW, data volume ,query complexity etc. which gets too high to jump over by the relational engine. And, Yes, Viney@rd is aimed to SMBs or to niche sectors in larger enterprises.

So, I do not want to compete with the many stellar "data cooking" solutions that are out there, I can't and they already did a fantastic job. At the end of the day, I do not run exactly a one man show but a close approximation of that.

I just want to address a couple of issues which rise in workgroups who make an heavy Excel usage.

First, files proliferate. They become confused and their relations become soon intricate. External references can't be reached because a file was moved, the format you got is not exactly the expected one etc.

Viney@rd enables you, without leaving Excel, to save your data in a central repository and work from there. Nothing prevents to build something custom that feeds data automatically (the db structure is very easy to understand and it is open) but even the average user, with Viney@rd, can adjust data as she needs they are. Often Excel sheets are used to collect data, and consolidating them requires an ad-hoc app; with Viney@rd this job is greatly eased, not to say already done. If you have to classify dimension values differently, to introduce a slicing level which does not exist on your system, simply add an attribute to the dimension and compile it on Excel. In other words, arrange your data how you need and make it yourself.

Second, your report layout, is not exactly the layout you need. Too often high level reporting is done by Excel because it can address a single cell while the usual tabular report layout can't. With Viney@rd you can tie a cell to a certain figure coming out from the repository. You can limit the numbers of rows returned, sync two queries' outputs or have the result of a calculation to be part of the query where condition. You have control on query results down to the single worksheet cell. So Viney@rd can refresh data even in the most complex layout without disrupting it.

If you need to analyze data, Viney@rd provides data connections to the models to place a pivot on top of them or load data into the new PowerPivot AddOn. They work far better than I could ever do, and you have already paid for those capabilities, so you must not buy them twice! Should the queries become too slow, by Viney@rd data transformations you can add aggregated models and query from them. The automation of the process is still weak, but is one of the scheduled improvements in the near future.

If you want to learn something more about please visit http://www.straysoft.com. If you want to be part of the Viney@rd 1.2 private beta contact me at vineyard@straysoft.com If you want to try version 1.1 go here http://www.straysoft.com/Try.html

Thank you for your questions, Garyk; Take care.

My Business Intelligence links

Admin — 2010-03-06T14:51:54+01:00

As I promised quite a long time ago, I make a list of the Business Intelligence sites I regularly read.
I'm not always on the topics being discussed, but I learnt a lot for sure from them. I'll never thank enough those people who share their knowledge online. This is by no mean a complete or a popularity based list, and is grounded only in my personal taste.

BeyeNETWORK is the battleship of BI sites. Many of the most famous BI stars write here or their blog is hosted here or is aggregated here. Bill Inmon, Jill Dyche, Claudia Imhof and many others. Articles cover BI at 360 from high level philosophy discussion to low level implementation, from market news to change management in BI projects.
Being a rather cynical guy, the one defect I find that it is a little biased toward large, enterprise-size analysis.

TDWI is just an inch back from the previous site. It is not a totally informational site as it provides education and consulting, and it is better enjoyed with membership.

If I could, I'd marry this girl: Inside The Biz by Jill Dyche is one of the most insightful sites I have ever came across. She deals with a variety of topics, not all BI related but each and every article is worth reading.

For those who can read French, Le Grand BI is an immense enjoyment. Their prominent feature is a cynical and disillusioned approach to all the hype and buzzwords that sometimes blind us. I often refer to them to have a second opinion.

As I work for a large part in Microsoft ecosystem I use and like the Microsoft Resource Center . What's outstanding here is that you are taken by hand and brought to the highest level seamlessly by a host of written and filmed footage. Donald Farmer articles are a must read for all those who work with MS products.

Last but not least Oz-Analytics provides an always interesting point of view. Starting from other articles or real life experience, I've never read a trivial point of view from this guy.

As you can easily notice I leave out all those bloggers who deal mainly with the technical side of the job. Actually there are a lot of them worth reading, some fundamentals. This a good topic for another post, I'd say.

Enjoy.

In defense of the Natural Keys

Admin — 2010-01-21T11:46:42+01:00

Whenever I use the term "Natural key" in a tweet or on Facebook, someone always DM me to remind me how natural keys are worthless. I should use the brave and muscular surrogate keys for each and every task. Maybe is a frame of mind, but whenever there are strong technical debates I feel naturally inclined to the minority.
In this case my point is that natural keys are perfectly adequate for many Business Intelligence tasks, and should be replaced by surrogate keys only when necessary.

If you are still with me, let's go.

A bar counter definition of natural key is: "the code which uniquely identifies your record". Every transactional system assigns codes to its entities, customers, salesmen, products etc. The policy used to assign this code, is up to the transactional system and I could not care less.

Given that natural keys can a) change over time b) have a business meaning that can change over time as well c) not be the ideal field format for a join, often a surrogate key is introduced. A surrogate key is a key, usually numeric, unrelated with the natural, that uniquely identifies the record. That is, it does exactly the job already done by the natural key. (if you want a less mundane description of this subject you can find a good article here).

This consideration alone should drive to the conclusion that the widespread use of surrogate keys in a datawarehouse is often overkill.

I made literally tenths of systems with no surrogate keys which worked fine for years. Often we think to DWs as multi terabytes systems which integrate data from hundredths of systems, but these are only a fraction of the total. There's also a midsized business market which needs the bulk of the abilities provided by a datawarehouse with far less data and far less systems to be integrated. In these cases, a simple approach, based on natural keys, may be perfectly suited.

Building surrogate keys, is often a rather complex task, which slows development, hinders the long and delicate subsequent trimming work and slows loadings. More subtly, they're an entirely technical subject, hard to be understood by non technical project sponsors thus hard to justify on a project schedule.

Surrogate Keys should be introduced when they are necessary and there are, indeed, cases where surrogate keys are highly recommended.

In those multi terabytes DWs, where the smallest fact table has half billion records, performance becomes such an issue that the use of small numeric keys is practically mandatory. If many systems are integrated together in the DW, chances are that codes overlap, so an unrelated key is a good solution to that. Surrogate keys also shield DWs from changes of the naturals, whose propagation in a very large DW is an awful job. Also Surrogate Keys are a good artifact to factor in slowly changing dimensions. Etc. Etc. etc.

So, the next time I tweet the term "Natural Key", please do not flood my account with "Surrogate Keys"!

Quality content blogs: Startup and Software Entrepreneurship

Admin — 2009-12-21T00:25:16+01:00

Like many others, I regularly read a number of blogs. Reading, for me, is a way to relax after a tough mental effort like coding or a stressful consulting day. I even can't sleep if I do not read something. The written word is the only way to take my mind on a safe path before sleeping. No use to say I want to learn something from reading. Blogs are the main information source on the Internet. In my opinion the blog format is perfectly suited to the Internet use; it must not be as coherent as a book, it is shorter and it may have a touch of personal diary which closes the gap between the author and the reader.

I want to start with Startup and Software Entrepreneurship

Too easy to tell, but this is the place where I learnt that founding a successful MicroISV was possible is Joel On Software http://www.joelonsoftware.com/

Joel Spolsky has been the forerunner of software entrepreneurship blogging. He told the story of his company on-line, giving out some top quality content along the road. Some posts on software development are now classics and should be part of every developer's background. On the site some interesting forums are accessible; their vitality has decreased since when they require registration but a lot of high quality feedback can be accessed by posting there.

The other blog where every post is worth reading twice is A Smart Bear, from Jason Cohen http://blog.asmartbear.com/

Jason, a former software entrepreneur, has the incredible ability to always find something not trivial to say. I've never read something coming from him that wasn't absolutely insightful or eye-opener. A must read for each and every small software entrepreneur.

Penelope Trunk is a compulsive blogger who writes about herself on The Brazen Careerist http://blog.penelopetrunk.com/

She has the awesome ability to draw general conclusions and useful lessons from her personal history. Someway, she manages to be in the middle of something that has a meaning for you. She changes job, and you learn what you should do to get a new job. She's interviewed on TV, and you learn how to manage press releases etc. My wife reads her blog, just to learn about her life; I read her blog to learn about business life. Amazing! Sometimes we even talk about her at dinner!

My friend Peldi Guillizzoni runs his company blog, Balsamiq, telling the story of the business as it progresses http://www.balsamiq.com/blog/

Peldi is amazing, he was able to create a small multinational company (with just 2 employees!) out from his application Mockups. He often blogs about releases and bug fixes but, when he talks about entrepreneurship, he really deserves attention. I learnt from him how the Internet works today.

The last outstanding blogger I want to mention in this post is Eric Sink http://www.ericsink.com/

He's a software company founder with a very clear vision of what the business of software should be. Lately he blogged a lot about source control systems, but older posts on software product marketing are true classics. If you are a bit geeky or you come from a technical area, Eric's blog will effortlessly introduce you to those unknown realms.

In the next post, I'll talk about the Business Intelligence blogs that I regularly follow.

Feature Spotlight: assisted input and auto coding

Admin — 2009-12-13T13:41:20+01:00

This is the fourth and last post of a series dedicated to Viney@rd features. Find the first here, the second here and the third here.

One of the Viney@rd groundbreaking features is enabling the user to fully control the model content by simply compiling a worksheet in Excel. Two things, nonetheless, may be particularly annoying while doing this.

Viney@rd uses codes to identify the dimension key. If you compile the table by hand, remembering the right code for a dimension element may be a pain. So the "Assisted Input" feature is implemented. When turned on, a textbox and a list appear on the screen. Simply select the code column, type the few first letter of the dimension element description and it will be selected on the list, along with other matching elements. Simply hit enter or click on the element to add it to the table.

Rather than adding rows manually, it is likely the user will have to copy and paste data received from other sources. Often, human-made tables do not have codes but simply have descriptions. Getting the right codes is a very time consuming process. So, simply paste descriptions in the proper column and then click "Add Codes". The "Add Codes" command infers the code from the description. It works perfectly when the description is exactly the Viney@rd description, but can also "Guess" what the right code is. False positives are rare because, when it is "unsure", it rather leaves the code blank. The assisted input can help the user compile the codes left blank.

Now you can easyly test Viney@rd for free downloading it from here. The trial period lasts 90 days and it is absolutely free of charge and with no obligations whatsoever!

If you want to learn more about Viney@rd visit the web site!

Feature Spotlight: Automatic connections to Viney@rd database

Admin — 2009-12-05T23:22:43+01:00

This is the third post of a series dedicated to Viney@rd features. Find the first here and the second here.

Viney@rd has its own query feature, which can draw tables on Excel worksheets, but it is aimed mainly at creating complex, refreshable, layouts. It is easy to understand that, while this is felt by many as a requirement not fulfilled by classical BI tools, it is not the best approach to data analysis. Controllers and data analysts require both. Nonetheless Excel has a powerful built-in feature to analyze data, the pivot tables.
One of the ideas underlying Viney@rd is not to cater twice what the user has already purchased, so, instead of duplicating the feature, I created something to integrate pivot tables with Viney@rd.

From Viney@rd client you can create a workbook connection to a model. The connection exposes as fields all the dimensions, the attributes and the measures. So, you can analyze all these data in the usual way.

With this feature you can also use Viney@rd data as a source for PowerPivot engine in the coming 2010 version, working with an even better analysis tool.

Try Viney@rd, 3 months, fully functional demo!

Learn more about Viney@rd

Feature Spotlight: Automatic number detection

Admin — 2009-12-01T11:12:29+01:00

This is the second post of a series dedicated to Viney@rd features. Find the first here.

Viney@rd is not a mere reporting tool. While the ability to feed each single cell in a worksheet is very important, all the model building process made through MasterBook.xls has a very high value added. The key point is that no database knowledge is required and data can be saved within models directly by Excel.

To this respect, the user must not care too much about codes, Viney@rd can "ingest and metabolize" almost everything. In particular, you can have a dimension with both numerical and alphanumeric codes.

Albeit you can save everything into the repository, the nature of what you save influences the outcome of the filters that you place on the query. The filters with" <"and" >" signs may not work as expected. If you have mixed alpha and numbers like 001, 002,003, ToBeAssigned, InAssignement etc, there is no choice other than comparing alphabetically. If you compare alphabetically, the system does not know that numbers are numbers, so they will come before letters and 10 will be before 9. The best way to avoid this is padding the numbers with 0s, that is 001 instead of 1, 013 instead of 13 etc., a rather tedious work.

Nonetheless, Viney@rd is smart enough to recognize dimensions, or attributes, which are entirely numeric, and compare them accordingly.

So, the user must not worry about things like defining objects as numeric or alpha, or padding the numbers to sort or filter them correctly .

Feature spotlight: query synchronization

Admin — 2009-11-25T13:51:09+01:00

This is the first post of a series focused on a single Viney@rd feature, to let you know about those features which are not immediately visible but, all together, build up Viney@rd strength.

�

Let�s start with query synchronization.

�

In a workbook you can often have two similar queries, which differ only from few particulars, mainly conditions. A typical case is the current year vs previous year or budget comparison.
A less trivial case occurs when comparing not homogeneous data. For example, you have main query with customer and sales, but your customers are both other companies and individuals. For companies you have a credit model showing the customer�s financial situation, for the individuals you have a model about customer�s demographic. You want to combine the three models in the same spreadsheet area.

�

The synchronization feature let you sort and filter the results of a query according to another query.

�

Please note that this feature is hard to find even in very expensive reporting tool and is never implemented in such a pragmatic manner.

�

For example, you may wish to get your customers YTD value and have the corresponding budget aside. Invoices and budget will likely be in two different models, and the customer�s order is not guaranteed to be the same; more, new customers may be present in the YTD query but not in the budget query. Syncing the budget query with the YTD query means that Viney@rd will scan the first location of the YTD query and will output the budget data in the same order as in the YTD query.

�

YTD Query
Customer	Value
�Customer A	7000
Customer B	6500
Customer C	3000
Customer D	2000

�

Budget Query
Customer	Budget
Customer C	3500
Customer A	5000
Customer B	5500
Customer E	500

�

If the budget query is synced to the YTD query the result as printed on Excel will be

�

Combined Result
Customer	Value	Customer	Budget
Customer A	7000	Customer A	5000
Customer B	6500	Customer B	5500
Customer C	3000	Customer C	3500
Customer D	2000	�	�

�

Notice that budget customers are now printed in the same order as YTD customers. Customer D has budget columns blank as there was no corresponding member in the budget query results. Customer E, which has no YTD value, is not shown, thus causing a filter effect.

�

Please notice that custom sorts may be implemented with this feature. For example: refresh the YTD query, sort the customers in the order you want, refresh the budget query. The order in which the budget results will be printed is the same as in Excel, but Viney@rd always start scanning from the first cell if the position of the YTD query as defined in Viney@rd.

�

Notice also that we have now two customer columns. This layout is usually redundant and unwanted. To hide the second query dimensions, uncheck the �Show Row Hdg.� Checkbox. This checkbox also works with stand alone queries, preventing the row headers to be written on the worksheet.

�

Synchronizing two queries is an easy task, just create the two queries, go to the query to be synced and pick the main query in the drop down. That�s all!

Four steps to positioning your software within the market

Admin — 2009-11-22T00:13:38+01:00

Some software entrepreneurs, when asked, say that their market is whoever buys the box. Some have a clue about who their customers are, but they really do not know well. Some others have a razor sharp knowledge of their market and carefully drive their application development: they know their market positioning. Market positioning is not something that happens, it is a choice that should drive your development efforts. So, it is worth knowing something about. In this post I will even resist the urge to explain where Viney@rd is positioned within the market, so keep reading safely.

First, what is market positioning? The best way to understand it is to think to the market as the shelves of a library. Each shelf covers a topic or an author. The books in the front rows are more accessible than those in the back rows. The books on the higher shelves are more difficult to reach than those at eye level. People looking for a book will locate the appropriate shelf, then they'll likely grab a book on the front row. If the shelf is located 3 meters high, chances are they'll renounce getting it, unless they exactly need that book or a book from the top shelf.

Some people will pass by and casually spot an interesting title and they'll get it. Some others will require a specific book and will browse through the entire library to find it.

The key point, anyway, is that a book (that is, a piece of software) can stay on one shelf. There's nothing like a "matrix oriented shelf".

So, let's start from the last point. Some of you will say that some package is good at doing two or more things. Penthao, for example, contains ETL, reporting, ad hoc query etc. Open Office is good at doing word processing, spreadsheets, database etc. Wrong, Penthao lies among the Business Intelligence suites with Business Objects, Microstrategy, Cognos etc etc; the one thing it does is organizing the process of consuming business information. Open Office is an office automation suite, it organizes the way an information worker relates with knowledge and fellow workers. Even if, technically, a piece of software does more than one task, it will be perceived by the market to fit into a single category. This happens because people define things by comparing them, so anything is something else with some differences (my wife is used to say that a rabbit is cat with long ears and a short tail, but my wife is graduated in social sciences, not biology �).

The library of software, anyway, is organized in two large rooms, the consumer and the business markets. These are very very broad distinctions. Some find difficult to draw a clear line among the two but I use a definition that appear to be sensible, at least to me. A consumer software addresses the problem of an individual or her family, a business software addresses the problem of a business entity, no matter how small it is. The consumer market has looser requirements (if a video game crashes, nobody is hurt and no money is lost �) with low unit costs, usually low unit margins and high volume. The business market is more varied, ranges from few bucks invoicing softwares for professionals to multimillion, high end, enterprise management systems. Often it has higher margins and must comply to much more compelling standards.

First choice: will you build your software for consumer or for business market?

From now on I will cover only the business money because a) it is the one I really know b) it is where the real money is. In my opinion it is the place where even a small or a micro company can prosper because it requires volumes much lower than those of the consumer, Userscape, SmartBear, Balsamiqor FogCreek are living examples of this.

So you enter the business room and you will soon realize that the vast majority of the books is in English. There are few shelves of books in foreign languages and few books which are present in the library in more than one language. It's no use to say that the vast majority of the readers picks books in English. Translation: Microsoft Windows rules. All the other OSes have their role in the market but they occupy a niche. This is not going to change in the near future. I know that I'll be flamed for this, but it's a fact of life. So, the operating system is not really a choice, while being multi platform is a plus, not building for Windows imposes heavy self limitations.

The actual choice though, is related to what is called "ecosystem", that is, the complex of business software and architectural building blocks that revolve around one of the big players. The ecosystems worth considering are:
Microsoft (AX/Nav - SharePoint - Office - SQL Server - .NET)
Oracle (Oracle Apps/One world - The Database - Hyperion - chunks of Linux)
SAP (The ERP - Netweaver - Business Objects)
There are also minor ecosystems which feature a less comprehensive coverage of the business world like:
IBM (websphere - db2/Informix - iSeries and X worlds)
Open Source (a blob of technologies revolving around Java and the LAMP stack) and few others.
To be complete, I must say that there are technologies which span through all of these ecosystems (like Adobe, the MS Office application or the rising Google) but are rather specific and not really relevant at the moment of this writing, despite all the hype which surrounds them.

The ecosystems imply that, in a business environment, an ecosystem tend to dominate the others; that is, the "best of breed" approach is always less and less popular because it requires interfaces among systems, which imply costs and complexity.

The ecosystems are not perfectly equivalent despite the marketing claims, so you have to pick carefully because your choice will focus you toward the referring market. Even the most general applications have a bias toward it. For example, if you build a LAMP stack based application for meeting rooms management, you may feel to be completely independent. In a business environment, anyway, you'll be asked first to interface your data with the local ERP HR module to have evidence on the employees data of the meeting usage, then with MS Outlook to coordinate reservations with meeting invitations, then with the accounting module to automatically post meeting costs etc. At the end, the market will ask you to have your PHP created screens inside the ERP, and you'll find yourself locked within an ecosystem, even if you did not mean to. The more the app you are creating is complex and the less it can be easily ported to other environments, the more you'll be compelled to chose a reference ecosystem.

Second Choice: which ecosystem do you pick?

So far you have chosen a shelves row in the library, now you have to find a position to place your book. Of course, the books on the front rows are spotted much easily and chances are that they will be the most read. Nobody picks that dusty gray book in the back row, unless she needs exactly that one.

That is, your software may address a wide range of requirements, standing together the other players on the market, or it can focus on a specific niche with specific requirements, becoming known only to niche players. From a business perspective, both solutions are viable and can lead to a sustainable cruise speed. What you have to do, anyway, is rather different. In the first case you'll need to tie, more or less, the other players in most of the features and to be outstanding in the feature which differentiates you. In the second case you need to concentrate on your niche and to adhere closely to your (potential) customers requests. The mindset, the competency, even the people you need are different.

Third Choice: do your software addresses to a niche audience or to the broader public?

The books on the higher shelves are, of course out of reach of many, none the less few people still read them. Even if your software is addressed to a niche audience, chances are that there are going to be different price ranges. You have to chose the tier in which your software will lay. Obviously, the low market tier will target lower unitary margins and higher volumes, the hi-end market will feature few sales to few key customers. As explained before, you need to work differently to address the two segments. Be aware that there is a point not obvious about this. At lower ends you usually end up talking about features, at higher level what matters most are the concepts inherently embedded within the software; that is, how the business processes are influenced by the use of the software (no matter if there is auto completion for fields or not).

Fourth Choice: does your software addresses the low, the mid or the high tier of the market?

So, simply writing down the four questions and answering them clearly in one or two sentences may well help you decide where to go with your software.

Did you do this kind of analysis before starting up your company? Do you have any experience on this kind of planning? Let me know.

Viney@rd and PowerPivot: no overlap but synergy

Admin — 2009-11-13T12:48:05+01:00

I've been asked about how Viney@rd relates with the environment that Microsoft is designing with PowerPivot, Excel 2010 and SharePoint 2010 upgrades (Gregory and Rob, thank you for considering!). I didn't have had the occasion to dig deep in all those applications yet, so I want to lay only few points that appear quite acquired so far.

I must confess that there has been a moment when I feared that Viney@rd was doomed to become a poor copy. Luckily, some of the ideas which Viney@rd is based upon are such that the others are too snob to implement them ;o)

1) Power Pivot takes Excel ability to handle and analyze the result of a complex dataset to the next level. Viney@rd, though it can organize query results in tables, can address a single cell or a single row, removing headers from tables. So complex Excel layouts can be preserved upon query refresh with no intermediate "database" sheets or VBA.
This reconciles Excel layout versatility with the ability to refresh data from the DB.
I've seen so many controllers or sales analysts flaunting an Excel printout at me saying: "I do not need drill down, I need this. It takes half a day to make, make it refresh with the click of a button", that I decided to build the app.

2) PowerPivot can coalesce data from multiple data sources in a single, high performance "blob"; Viney@rd gently takes you to incrementally creating a datamart federation. The business user, likely, is not even aware of what's doing. PowerPivot requires a database working knowledge, Viney@rd does not require any.
Anyway, nothing forbids the experienced user to consume Viney@rd data from PowerPivot. She can go on tables directly or use the flat view which is created together with every model.

I'm also looking to PowerPivot high speed engine as a mean to boost Viney@rd performances.

3) The entire Microsoft's castle is devoted to reporting, ad hoc query, data analysis etc. but cannot modify data. With Viny@rd you can move, change and enrich data with no technical knowledge.

All these points deserve more attention but, by now, Is unwise to go deeper without a thorough analysis of what the new applications can do. I'm just waiting to see some nearly final versions to run an extensive test. Meanwhile Office 2010 is not supported,

Enjoy

I Always Find Something

Admin — 2009-11-11T01:08:32+01:00

When I'm working on Viney@rd I spend quite a large amount of time surfing the web, checking blogs on Twitter and Facebook. I try to connect with people who could be interested to Viney@rd, of course. Seen from the outside this activity appear to be a waste of time.

My wife once observed me and drew this conclusion. Actually, once, I agreed with her. It was a way to pause in the intervals between tasks. I theorize that people have a fixed efficiency, and there is a limited amount of time to be spent "in the zone", before giving up to something not requiring the same concentration level.

Working in this way, I slowly realized that I started finding some small nuggets here and there. It might be photos, a news fragment or a blog post, all of them worthy somehow. The Internet is a powerful knowledge aggregator and exploring the topic suggested by the accidental finding is often very very easy.
So I learnt of things I didn't know about, like truffles restaurants in New York or Win 7 vulnerabilities. This is called Serendipity, but this term often refers to science discoveries. My serendipity is small an intimate, and makes me a little better, one bit a time.

If you feel like yelling at me because I do not talk about Spreadsheet Automation and BI, do not do it here; download and setup Viney@rd and use the "Complain" feature :o)!

Take Care

Version 1.1 is here

Admin — 2009-11-06T15:41:12+01:00

Building version 1.1 has been a tough work, that's why I disappeared for a while. New features have been added but, most of all, a lot of testing has been done, making this release a lot more stable than the previous.
The leit-motiv of this release is "Listen to the users".

�

First, I focused on making the software easier to configure.
Working with SQL server is at the root of the issue: non technical users must always find out a SQL instance to connect to or install a free version on their machine. Both these tasks are not trivial for some business user.
Unluckily, there are few things to do about that without radically changing the product proposition.
I've been suggested to support MS Access as well; I do not reject the idea in principle but it requires a fairly large amount of work and automatically downsizes the application.
So, be prepared to see some news on this topic in the near future.

�

In the meanwhile, I introduced a configuration wizard that guides users through the configuration steps in a colloquial way.

�

Windows authentication is now supported, making configuration somewhat easier, especially after installing the SQL server express versions. From a technical perspective, anyway, lacking this support was a big turnoff.

�

There is a totally new set of demo data, more consistent and sensible, based on Microsoft's Adventure Works database. Some users may also be more familiar with it.

�

The new "web bar" feature is aimed at communicating with the users; given the downloads I had, I got too little feedback. So I encourage all of you to make use of the new "Complain" feature that will land directly on me everything you need to tell. Actually I was thinking to name the feature "Yell at me", but it looked rather unprofessional.
Beside the complaints, you can access directly the knowledge base, the user forum, this blog and the user manual. Do not hesitate to use the forums either, too few use it now and mail me directly. I think that sharing your thoughts should be an advantage for everyone. (actually, I've been told that the forum look is too old style, but I'm working on it, just be a little patient!).

�

On the client side, I added an option to hide the query row headers. This is useful for synchronized queries placed side by side, like previous versus current year. I will never stress enough that this feature is very hard to be found in other query packages.

�

Finally, a slightly better look has been designed and a number of bugs have been fixed. See the knowledge base to learn about the fixed known issues.

�

So, I release this version to you. I'd really love to hear your feedback. If you buy Viney@rd now, I'm happy, if you don't and you want to explain me why, I'm even happier because this gives me a chance to make you change your mind.

�

Enjoy

Vineyard Business Intelligence

What�s new in version 1.2.1

Inverted Occam Razor Principle

Sneak Peek at the new web site

Slicing and dicing the income statement (4), costs

A Bucolic Parenthesis

Excel School

The Income Statement (3) the sales events.

Is your company balanced?

Slicing and dicing the income statement (2), Sales

A Video is Worth 10000 Words

Four Reasons Why People Love Excel and IT Departments Hate it.

Slicing and dicing the income statement (1), organization

Why you should get an MBA

A nice P&L statement

Recommended Readings

How Managers Use the Income Statement

Income: What Companies Live and Die for, or the Income Statement.

Putting the Business back in BI

Why things are like they are

My Business Intelligence links

In defense of the Natural Keys

Quality content blogs: Startup and Software Entrepreneurship

Feature Spotlight: assisted input and auto coding

Feature Spotlight: Automatic connections to Viney@rd database

Feature Spotlight: Automatic number detection

Feature spotlight: query synchronization

Four steps to positioning your software within the market

Viney@rd and PowerPivot: no overlap but synergy

I Always Find Something

Version 1.1 is here