The rag trade is notorious for experiencing forecasting difficulties but I am surprised that Zara is collecting weekly data in this manner. I would have thought it could do much better by collecting SKU data via the EPOS system, augmented by local data that it could then crunch through an analytics engine.
Bob Warfield
· 2 years ago
Excellent post, Andrew!
It really got me to thinking about how the concepts you've discussed impact the implementation of a Trust Fabric for the Social Graph in Web 2.0 for Business vs Social Web 2.0.
I agree with the analysis that organizational models may change due to declining information/communication costs (and increasing information/communication capabilities) but that it is hard to say if there will be decentralization per se. Organizational structures are complex and involve people. If one takes a look at computer networks, the decline of information/communication costs has stimulated the development of decentralized (P2P) systems but there is still a lot of debate about these systems. See for example the discussion on the BBC iPlayer.
Mario Ruiz
· 2 years ago
Hi Andrew.
Lets divide data, information, knowledge and intelligence.
A lot of data is passing through the network, some of that becomes information. With reasoning this info can be converted to knowledge. The use of the knowledge is intelligence.
Business Intelligence is the present of decision making. With the proper tools much of the info can be analyzed to even convert in business rules.
I remember the time when the weather forecast was just for the next hours. With computer power the time is now 10 days, we can reasonable predict.
What no many people realize is that the computer tools and the computer muscle is not enough to solve the problem. We need a solid theory behind. For most markets we do not have these theories. So we are "try-and-error."
The problem with this is sometimes we find a pattern that perfectly works for a period of time, but we do not why. So when the market begin to change the "try-and-error" also begins.
Is BI the ultimate decision making process? No. It is the present. For the time-being BI is the best we have to take advantage.
Fantastic post andrew, you really have helped put a different perspective on this complex topic and have provided a valuable resource for a blog post I will be doing soon but I would certainly say that IT is central and core to everything in life now let alone businesses.
David
· 2 years ago
Interesting article.I'll have to relook into these aspects as of now for my organization and then post about it later.
Luis Derechin
· 2 years ago
Great article Andrew!
My company, JackBe (http://www.jackbe.com), provides an enterprise mashup (http://blogs.jackbe.com/2007/07/defining-mashup...) platform and as such is on the cutting edge of providing enterprises with necessary technology for information exchange and collaboration. We have personally experienced the ‘hybrid’ model that you describe and we too believe that it is required for enterprises to exchange information while ensuring an environment of trust.
In essence we are seeing that the exchange of information and migration of rights (that Malone describes very well), as well as the technology needed to facilitate this exchange, can occur for consumers and enterprises alike but enterprises have very different needs in their exchanges (http://blogs.jackbe.com/2007/08/difference-betw...). Our experience is that enterprises have to ensure a level of security, governance and reliability that is both tough enough to meet their risk criteria and still balanced enough can it be implemented and maintained.
In short, no enterprise will formally allow nor motivate information exchange without governance. And hence the migration cannot occur.
yossi lebowitz
· 2 years ago
very impresive, thank you
Gene Weng
· 2 years ago
Rule engine technolgy is helping organizations to redefine decision rights. Actually, my daily job is to develop decision services using software such as Blaze Advisor and JRules etc. A centralized business rule repository typically takes away decision rights from individuals. This centralization helps organization to better manage core decisions and also makes improvment easier.
Great post! Very insightful, it's like free college classes!
Atul Rai
· 2 years ago
Hi Andrew,
Very nice read ... The way I see it, this is set to change the very nature of the organization. I have written about this at http://atulrai1.blogspot.com/2007/09/how-knowle... though I must say that I was not really able to put my finger on decoupling, which is the concept you have elaborated quite well on.
Thanks, Atul.
Jack Vinson
· 2 years ago
I was interested to read about Zara getting their forecasts from store managers. While I'll grant that forecasts for the next couple of weeks are better than forecasts for next year, forecasts are always wrong. That's just the way they are. If Zara can really get clothes to their stores quickly, they should use the EPOS data, as Dennis Howlett suggests. (Note: most apparel manufacturers cannot respond to demand changes quickly due to ingrained months-long lead times through the entire supply chain. If Zara has broken this problem, they are a long way toward replenishing actual consumption.)
What is interesting about relying on store manager input is the other part of the paragraph above. Get input from store managers on fashion trends that they are seeing: what things are people wearing that they get from other stores? what things are people putting together that Zara could capitalize upon. These are difficult-to-discover trends that will be more useful than expected demand.
Kishor
· 2 years ago
Dear Andrew,
Thanks for an insightful analysis on organizational governance. How does human need (for control and power) affect such a decentralized decisioning process? What are the impedements and a strategy to overcome the same?
Regards, Kishor.
Chris Shilling
· 2 years ago
Hi Andrew,
An engaging post full of fun stuff to think about!
I've been working in this area within a large, complex company for some years now. I recently commissioned Tim Lewens at Cambridge University to write a view of knowledge management from a philosopher's perspective because Polanyi's work has been mis-quoted so often in the knowledge management press; I like your split of general and specific knowledge as a way of thinking about it.
Some colleagues and I are looking at how current and emerging organisational and decision making concepts from the military could be applied to help complex companies devolve decision making, following work that two other colleagues had published last year on Mission Command. We've seen how this can be applied to multidisciplinary teams to good effect, enabling the kind of devolved decision-making that you've outlined, but it requires business leaders to understand their role in decision making as well. At some point decision-makers aren't those with the most information, but those with the right thinking style and experience to ask for the information they really need, and enough confidence in the people providing it and doing the work that their decisions will be carried out to allow them to do so without interference.
I think the decoupling that's occured is that access to information is no longer a barrier - the ability to assimilate it in a way that can produce new insights has become far more important. One can think of this as specific knowledge, unique understanding, experience or whatever else one might like to call it, but work that Kathy Hagen did in 1997 with me showed that understanding how people think about information and situations is as important as what they know at any particular time - I think this is also the premise of de Bono's book Tactics.
Thanks,
Chris.
Starting a small business
· 1 year ago
This guy is too smart for his own good! I appreciate all the work you put into your articles.
Jason
· 1 year ago
Hello Andrew, Excellent article!
I agree with you in that some loan officers and mortgage underwriters are better at assessing credit risk. However, after building out a model that other less experienced loan officers can learn from, we are building our bench strength by teaching others how to accurately assess credit risk.
Centralization of mortgage underwriting activites does make sense with low volumes of information, but for an organization to survive and thrive, we need to operate in a decentralized fashion. Too much reliance on a few key players will ultimately become a bottle neck and impede the flow of information.
Stumbled onto this post, but I found it quite interesting. Enough has been said about Malcolm Gladwell's books, but there's actually an interesting section of 'blink' (by gladwell), which speaks to the fact that less information can actually prove more effective than more information in predicting heart attacks - if you can identify the handfull of truly relevent indicators... Unfortunately this defies the common man's thirst to know absolutely everything and make a decision on that pile of info!
fsbo
· 1 year ago
Hey Andrew, Your articles always help me in every aspect. Thanks for sharing your thoughts.
UK Mortgage Broker
· 1 year ago
Adndrew great post very informative, it was a lot to take in but I enjoyed reading your post.
hdtv antenna
· 1 year ago
What a great use of the illustrations in getting across the point. Very smart! Although some of it I disagree with but VERY interesting!
Custom Dissertation
· 1 year ago
By taking the social interaction out of the hands of the mortgage officer who is closer to the actual customer and in a position to assess different kinds of risks beyond the FICO score. And perhaps worse in the long term, it dehumanizes the organization's capability to develop a relationship with the customer.
zeolite
· 1 year ago
Business executives focus hard on revenue and the bottom line and increasingly devote resources to corporate governance and security matters. Yet, almost one in every three of the more than 1,700 senior-level corporate and technology leader respondents in a new international survey do not trust their companiesÂ’ own ability to handle private or sensitive information, and that same number are either unsure or donÂ’t believe that most of their business partners consider them to be trusted enterprises.
Baseball Cleats
· 8 months ago
I appreciate all the work you put into your articles.
magic tricks
· 1 year ago
I think Malone might well be right that the "market share [of centralized management] is likely to decrease," but I also think there will be strong movement in the opposite direction -- toward more centralization of some decision rights—and a lot of very interesting hybrid models, some so interesting that they’ll look like science fiction magic tricks
used autos redding
· 12 months ago
i think Centralization of mortgage underwriting activites does make sense with low volumes of information, but for an organization to survive and thrive, we need to operate in a decentralized fashion. Too much reliance on a few key players will ultimately become a bottle neck and impede the flow of information.. regards, Grahm - used autos redding
livecams treffen
· 7 months ago
Do not Zara has a computer network that allows them to see what sells best?
thomas fallen
· 6 months ago
I don't know, every company I've worked for have limited the amount of information plebs can access via draconian firewalls. I think perhaps only new companies will survive this new age, old ones are too slow to adapt.
Puneesh Lamba
· 4 months ago
Andy, I read the book "The New Division of Labor: How Computers are Creating the Next Job Market" and it swas realy amazing. Thanks for referring.
Club Penguin Cheats
· 2 months ago
Well...By taking the social interaction out of the hands of the mortgage officer who is closer to the actual customer and in a position to assess different kinds of risks beyond the FICO score. And perhaps worse in the long term, it dehumanizes the organization's capability to develop a relationship with the customer.
All Comments
It really got me to thinking about how the concepts you've discussed impact the implementation of a Trust Fabric for the Social Graph in Web 2.0 for Business vs Social Web 2.0.
See my blog post for more:
http://smoothspan.wordpress.com/2007/08/28/busi...
Lets divide data, information, knowledge and intelligence.
A lot of data is passing through the network, some of that becomes information. With reasoning this info can be converted to knowledge. The use of the knowledge is intelligence.
Business Intelligence is the present of decision making. With the proper tools much of the info can be analyzed to even convert in business rules.
I remember the time when the weather forecast was just for the next hours. With computer power the time is now 10 days, we can reasonable predict.
What no many people realize is that the computer tools and the computer muscle is not enough to solve the problem. We need a solid theory behind. For most markets we do not have these theories. So we are "try-and-error."
The problem with this is sometimes we find a pattern that perfectly works for a period of time, but we do not why. So when the market begin to change the "try-and-error" also begins.
Is BI the ultimate decision making process? No. It is the present. For the time-being BI is the best we have to take advantage.
Mario Ruiz
@ http://www.oursheet.com
My company, JackBe (http://www.jackbe.com), provides an enterprise mashup (http://blogs.jackbe.com/2007/07/defining-mashup...) platform and as such is on the cutting edge of providing enterprises with necessary technology for information exchange and collaboration. We have personally experienced the ‘hybrid’ model that you describe and we too believe that it is required for enterprises to exchange information while ensuring an environment of trust.
In essence we are seeing that the exchange of information and migration of rights (that Malone describes very well), as well as the technology needed to facilitate this exchange, can occur for consumers and enterprises alike but enterprises have very different needs in their exchanges (http://blogs.jackbe.com/2007/08/difference-betw...). Our experience is that enterprises have to ensure a level of security, governance and reliability that is both tough enough to meet their risk criteria and still balanced enough can it be implemented and maintained.
In short, no enterprise will formally allow nor motivate information exchange without governance. And hence the migration cannot occur.
See more in Tom Davenport's blog: http://discussionleader.hbsp.com/davenport/2007...
and James Taylor's blog: http://www.edmblog.com/
Great post. Thanks!
JT
The EDM blog
Author of Smart (Enough) Systems
Very nice read ... The way I see it, this is set to change the very nature of the organization. I have written about this at http://atulrai1.blogspot.com/2007/09/how-knowle... though I must say that I was not really able to put my finger on decoupling, which is the concept you have elaborated quite well on.
Thanks, Atul.
What is interesting about relying on store manager input is the other part of the paragraph above. Get input from store managers on fashion trends that they are seeing: what things are people wearing that they get from other stores? what things are people putting together that Zara could capitalize upon. These are difficult-to-discover trends that will be more useful than expected demand.
Thanks for an insightful analysis on organizational governance. How does human need (for control and power) affect such a decentralized decisioning process? What are the impedements and a strategy to overcome the same?
Regards,
Kishor.
An engaging post full of fun stuff to think about!
I've been working in this area within a large, complex company for some years now. I recently commissioned Tim Lewens at Cambridge University to write a view of knowledge management from a philosopher's perspective because Polanyi's work has been mis-quoted so often in the knowledge management press; I like your split of general and specific knowledge as a way of thinking about it.
Some colleagues and I are looking at how current and emerging organisational and decision making concepts from the military could be applied to help complex companies devolve decision making, following work that two other colleagues had published last year on Mission Command. We've seen how this can be applied to multidisciplinary teams to good effect, enabling the kind of devolved decision-making that you've outlined, but it requires business leaders to understand their role in decision making as well. At some point decision-makers aren't those with the most information, but those with the right thinking style and experience to ask for the information they really need, and enough confidence in the people providing it and doing the work that their decisions will be carried out to allow them to do so without interference.
I think the decoupling that's occured is that access to information is no longer a barrier - the ability to assimilate it in a way that can produce new insights has become far more important. One can think of this as specific knowledge, unique understanding, experience or whatever else one might like to call it, but work that Kathy Hagen did in 1997 with me showed that understanding how people think about information and situations is as important as what they know at any particular time - I think this is also the premise of de Bono's book Tactics.
Thanks,
Chris.
I agree with you in that some loan officers and mortgage underwriters are better at assessing credit risk. However, after building out a model that other less experienced loan officers can learn from, we are building our bench strength by teaching others how to accurately assess credit risk.
Centralization of mortgage underwriting activites does make sense with low volumes of information, but for an organization to survive and thrive, we need to operate in a decentralized fashion. Too much reliance on a few key players will ultimately become a bottle neck and impede the flow of information.
Jason
LoneStarFinancing - Home Loans
Justin Reed.
All In One Forum
magic tricks
regards,
Grahm - used autos redding