Comments on: Inside vs. Outside

By: Security theater and the value of information – PEG

Security theater and the value of information – PEG — Fri, 08 Jan 2010 05:08:33 +0000

[...] is a lot like the challenge we’ve been talking about under the banner of The value of information. How do we make sense of weak, conflicting and volumous signals we see in the environment outside [...]

By: Beyond the “Amazon recommends” offer: Adding value to retail offers through external sources (Part 1) « Shermo

Fri, 06 Nov 2009 01:58:40 +0000

[...] though got me thinking though about some work that PEG, a colleague of mine has been doing on the value of information. PEG’s central premise is that time and distance drive the value of information. That is, [...]

By: Peter Evans-Greenwood

Peter Evans-Greenwood — Mon, 14 Sep 2009 10:12:20 +0000

Agreed; information which we cannot execute on has little value. Zara is an interesting case study in optimizing a business to minimize the cost of change, rather than the cost of operations. Putting acceleration over velocity, as it were. Also interesting is how Zara integrate external data (from fashion shows through to walking through stores and talking to customers) into their decisions. As Andy M. pointed out, this is the challenge of balancing strong internal signals (from the till) with weak and conflicting external signals.

It would be an interesting exercise to determine when the law of diminishing returns for data kicks in. You probably right--it's a lot sooner than any of us expect.

By: Peter Evans-Greenwood

Peter Evans-Greenwood — Mon, 14 Sep 2009 06:12:20 +0000

By: Peter Evans-Greenwood

Peter Evans-Greenwood — Mon, 14 Sep 2009 06:11:38 +0000

Agreed; information which we cannot execute on has little value. Zara, as you point out, is an interesting case study in optimizing a business to minimize the cost of change, rather than the cost of operations. Putting acceleration over velocity, as it were. Also interesting is how Zara integrate external data (from fashion shows through to walking through stores and talking to customers) into their decisions. As Andy M. pointed out, this is the challenge of balancing strong internal signals (from the till) with weak and conflicting external signals.

It would be an interesting exercise to determine when the law of diminishing returns for data kicks in. You probably right--it's a lot sooner than any of us expect.

By: Greg Quinn

Greg Quinn — Sun, 13 Sep 2009 14:45:40 +0000

The retail chain Zara's success are not simply about accurate business information. All modern chains have reasonable point of sales systems and extracting sales information from these is hardly rocket science.

Zara has chosen to have very flexible production lines close to their major sales outlets and consequently they are able to respond very rapidly to changes in consumer demand. Many of their competitors have relatively inflexible offshore production lines located a long way from their sales outlets. They are unable to respond rapidly to changes in consumer demand, even when they know what the this change is. The key point is that knowing what is happening in the market place is not enough; you have to have the organizational capacity to respond to it.

Zara management proved that for some product lines, optimizing for flexible response is more profitable than cost minimization. Depending on your product mix there's probably room for both models.

Even the most rabid of BI vendors would accept the diminishing returns to collecting business information but few would be comfortable admitting just how quickly this kicks in.

By: Peter Evans-Greenwood

Peter Evans-Greenwood — Wed, 09 Sep 2009 07:35:28 +0000

It's an interesting question you raise: which information matters? How do we find those few factor which will drive the best decision/analytic from the thousands (if not millions) of factors available to?

I think the inside vs. outside qn is a bit of distraction, because we want is the best information, and it is the integration of this information, the synthesis of insight, that creates value. The Tesco example is a good one: fusing external weather and internal sales history to predict what will drive sales. How do we determine which is the best information?

And I'm glad you liked the post. It's always nice to see ideas take on a life of their own in a debate

PEG

By: Jason Gates

Jason Gates — Tue, 08 Sep 2009 09:27:36 +0000

Peter, I enjoyed your perspective on “Inside vs Outside” and the debate surrounding this discussion. Improving information outside of the organisation to take advantage of trends and look forward should be an important strategy of any organisation.

One of the challenges is identifying where you are at in relation to “inside” and “outside” information management. Are you making the best use of inside information? Are there quick wins that can be made relating to improving internal processes, or should this be abandoned for a focus around external triggers to take advantage of opportunites? Maybe the answer is to consolidate internal initiatives in order to focus externally.

The importance of integrating and sensibly using external information is undeniable, and this effort needs to be juggled with concurrent activities relating to “inside” improvement … or you will fail when the opportunities come. Not every organisation feels they have an “A+” on inside information management.

By: Peter Evans-Greenwood

Peter Evans-Greenwood — Thu, 03 Sep 2009 12:51:51 +0000

The feed don't need to be distributed in time. It's really a question of our ability to make connections between bits of data, and manufacture insight (i.e. knowledge synthesis). Given a collection of disparit data points, which ones matter the most? One challenge when soliciting customer feedback is knowledge which feedback to take on board, and which to ignore.

“Should I wait, or should I go” is another interesting question I see it as a separate on though, and one I hadn't thought of until you mentioned it.

By: Peter Evans-Greenwood

Peter Evans-Greenwood — Thu, 03 Sep 2009 11:52:53 +0000

Opps… this was meant to be a reply to Andy's comment