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February 17th, 2010

Harvard Business School’s Ranjay Gulati has studied customer relations in business and has found that putting customers first hasn’t always been a priority. A big surprise though true. This customer aspect is known as the “outside-in” approach. Customers are put first in all decisions made. The products and services created brings value to customers.

One example is bagged salad. Customers just didn’t want the packaging of their lettuce changed. They wanted the salad made for them. What started out as a novelty is now a mainstay business in most areas of the United States. This might be simple, but I can hear you (and me) say, “Why didn’t I think of that?”

The goal is to bridge gaps rather than create them. One store that brought in this concept was Best Buy. They did some customer research and found that 55 percent of their shoppers were men. The research went another step and asked women why they didn’t shop at Best Buy more. The answer was that Best Buy was a store for men designed by men and manned by men. When the women shoppers were asked what a big turn-off was, they responded that they were given too much technical information about a product rather than how to operate a product and its function.

Best Buy had to shrink the core customer base rather than expand it. Store were redesigned and store floor employees were trained more on the function and operation of store products. This allowed for a new connection with the customer. Align the tasks and information around the customer.

Excerpt from Reorganize for Resilience by Ranjay Gulati

Most important, they must also guarantee precisely the reverse: that the line of sight from the customer into the organization is equally unimpeded, and in a final twist that the companies see themselves from the outside, with their customers, so that they can help wherever their customers are, in their hours of greatest need.

February 7th, 2010

There are three areas of analysis that business intelligence need to be focused on.

  1. Risk modeling to determine value-at-risk.
  2. Quantitative analytics for modeling investment strategies.
  3. High frequency trading strategies.

Business intelligence is moving forward with more on-the-fly decision making tools. The determination of risk exposures in open trades will give operations a boost. This also enables the better allocation of operational revenues.

First customized real-time data must be available so reaction to changing market dynamics is fast. If  financing organizations is at the apex of the strategy, hedging risk is a must. This means the ability to capture data is vital to success.