Forecasting

Understanding the different types of business forecasts enables organizations to tailor their forecasting efforts to specific needs and objectives.

Business forecasting is a critical process that helps organizations predict future trends and make informed decisions. There are several types of business forecasts, each focusing on different aspects of business performance. Here are the key types of business forecasts. 

General Business Forecasting

-Purpose: Provides an overview of the overall business climate and market conditions.

-Application: Useful for understanding the impact of external factors like economic trends, political changes, or technological advancements on the business.

Financial Forecasting

Purpose: It focuses on predicting the financial performance of an organization, including revenues, expenses, and cash flow.

Application: It helps businesses track their financial health and plan for future investments or cost management.

Accounting Forecasting: It estimates future costs related to operations, including raw materials, labor, utilities, and overhead.

Application: It's essential for budgeting and ensuring that the organization can cover its future expenses.

Demand Forecasting

-Purpose: It predicts future customer demand for products or services.

-Application: It helps businesses manage inventory levels, production schedules, and resource allocation based on anticipated market needs.

Sales Forecasting

-Purpose: Estimate future sales revenue based on historical data and market analysis.

-Application: Support sales planning, budgeting, and setting sales targets.

Capital Forecasting

Purpose: Involves predicting future capital requirements for investments in assets or projects.

Application: Assists in financial planning and securing funding for growth initiatives.

Qualitative vs. Quantitative Forecasting: Forecasting methods can be broadly categorized into two types:

-Qualitative Forecasting: It relies on expert opinions, market research, and subjective data. It is useful when historical data is limited or when predicting outcomes in rapidly changing environments.

-Quantitative Forecasting: Utilizes historical data and statistical methods to make predictions. This includes techniques such as time series analysis, regression analysis, and econometric modeling.

Understanding the different types of business forecasts enables organizations to tailor their forecasting efforts to specific needs and objectives. By employing both qualitative and quantitative methods, businesses can enhance their decision-making processes and better prepare for future challenges.

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VRM via Predictive Analysis

 VRM enhanced by predictive analytics is a powerful tool that can transform your vendor relationships from transactional to strategic.

Business vendor relationships in modern business are both art and science, complex, Vendor relationship management (VRM) and predictive analytics are powerful tools that, when used together, can significantly improve supply chain efficiency and strengthen partnerships with vendors.

VRM is the strategic approach to managing relationships with vendors throughout the procurement lifecycle. It ensures you get the best value from your vendors while fostering positive, collaborative partnerships.

Key VRM Activities:

Vendor Selection and Onboarding: Carefully selecting reliable vendors with strong track records and establishing clear communication channels from the outset.

Performance Monitoring: Regularly evaluating vendor performance based on factors like quality, delivery times, and cost. Identify areas for improvement and collaborate with vendors to address issues.

Contract Management: Negotiating fair and clear contracts that outline terms, conditions, and expectations for both parties.

Risk Management: Proactively identifying and mitigating potential risks associated with vendors, such as supply chain disruptions or financial instability.

Predictive Analytics in VRM:

Harnessing Data Power: Predictive analytics uses historical data, trends, and machine learning algorithms to forecast future events and potential issues. In VRM, this data can come from various sources, including purchase orders, inventory levels, and vendor performance metrics.

-Imagine you use VRM software that tracks your historical purchase data and vendor performance metrics. You can integrate predictive analytics into this system to:

-Forecast future demand for a specific product.

-Analyze past performance data from your top vendors for that product.

Predict which vendor is most likely to experience delays based on historical trends.

With this information, you can proactively place orders with the most reliable vendor and potentially negotiate more favorable terms due to your foresight.

Goal-Achievement of Predictive Analytics in VRM:

Demand Forecasting: Predict future demand for your products or services, allowing you to optimize inventory levels and place timely orders with vendors to avoid stockouts or overstocking.

Vendor Performance Prediction: Identify potential issues with vendor performance, such as delays or quality problems, before they occur. This allows you to take proactive measures, such as sourcing alternative suppliers or negotiating adjustments.

Improved Decision-Making: Data-driven decisions based on past trends and future predictions.

Inventory Optimization: Predictive analytics can help you determine optimal inventory levels for different items, reducing storage costs and ensuring you have enough stock to meet customer needs.

Price Fluctuation Predictions: Forecast potential price fluctuations for raw materials or components from vendors. This allows you to adjust your purchasing strategies, negotiate better contracts, or explore alternative sourcing options.

Risk Mitigation: Identify vendors who might be at risk of financial difficulties or disruptions. This allows you to diversify your supplier base and mitigate potential supply chain risks. Proactively identify and mitigate potential issues with vendors.

Stronger Vendor Relationships: Collaboration and transparency fostered by data-driven insights.

Cost optimization: Optimize inventory levels, negotiate better contracts, and avoid disruptions.

Improved Efficiency: Streamline your supply chain and ensure timely deliveries.

VRM enhanced by predictive analytics is a powerful tool that can transform your vendor relationships from transactional to strategic. By leveraging data and fostering collaboration, you can create a more efficient, resilient, and profitable supply chain.

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Innateloyalty

Be sure that your customer is getting the best products or services, and that customer experience is consistent, on-brand, relevant and refreshing to improve their loyalty.

A customer doesn't become loyal, just by buying; they become loyal when they have experienced something extraordinary rather than ordinary. Organizations are now experiencing a learning curve as it relates to customer delight. Some basic tenets that need to be considered: Know your customer; value your customer's time; own the customer's problems or issues; provide alternative solutions and increase customer loyalty.

Both retaining a customer and winning a new customer are very important to every business’s survival and thriving: Business world becomes more customer-centric; customer Experience Management is extremely important to a company's existence and growth. It is important for getting people across the organization together on the same page through the journey of customer experience.

It’s crucial to build involvement and make commitment in improving customer experience, and clarify the shared goals surrounding a common vision. Customer experience is effortless, productive, and painless, frictionless to delight people, gain new customers, retain loyal customers and improve the overall customer satisfaction.

Loyalty comes from the products or services producing its intended benefit consistently over time: It is clear that customers do not make the distinction between service, experience. They want to feel confident that they get what they pay for with a commensurate level of purchase fulfillment and that the interaction with vendors is pleasant. There's an expectation of more than just service now, but for the future as well. And there is consistency over time in the delivery of the experience. Customers are also more demanding in their requests, putting pressure on service delivery!

Customer loyalty increases or decreases at every touch point of customer experience. Not only when they walk into your store, interact with your product and speak to your staff, but also when they get in contact via multiple sales channels, impressed on the customization level of purchasing. That's the right path for businesses to take - stay focused on delivering exceptional customer experience every day and at every touch point.

Inclusion = Engagement, Innovation, Retention, Loyalty, and Productivity: Organizations have grown from looking at diversity & inclusion as a "check-the-box" compliance tool to understanding that having a wide range of opinions and viewpoints contributes directly to the bottom line in terms of productivity and profitability. Even though people have different intentions, cognitive differences, personality traits, working styles, effective inclusion efforts and empathetic communication can bridge innovation gaps and build a complementary team to generate creative results regularly and frequently; increase employees or customer loyalty.

There are different focus areas in customer loyalty and satisfaction, leading the adoption efforts of product and service offerings; driven to increase product and service expansion into other areas as a trusted adviser; having a focus on renewals and churn; capturing a customer's success criteria and producing quality results.

Where revenue matters, retention matters, and loyalty impacts retention. The entire experience journey customers have of corporate brands at each stage needs to be mapped out clearly to be sure that your customer is getting the best products or services, and that customer experience is consistent, on-brand, relevant and refreshing to improve their loyalty.

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Initiatevendornegotiationrelationship

Business vendor relationships in modern business are both art and science, complex, also critical, but it’s worth the effort to craft such a good long term relationship.

Information technology is a linchpin to run a contemporary organization; vendor and contract management is an important management discipline to optimize cost, harness innovation, foster business relationships and integrate IT enabled business competency. 

Sourcing can no longer just consider cost, it's also about evaluating vendor qualification, leverage expertise, and add alternative brainpower for business growth. Business & IT need to understand what is truly needed internally across the business, IT, finance, procurement, supplier and contract management, legal, etc. How to create value propositions in vendor/customer relationships, improve operational excellence, and build up a solid partner relationship for the long term.

Vendor evaluation: Partnership management is both art and science. IT is complex, IT vendor relationships are important to improve products/services reliability and innovativeness. A good IT vendor focuses on processes, and there's always an opportunity for improvement. A trustful IT vendor focuses on process optimization, customized solutions; on-time, on-budget, on value deliveries, and delivering “grade" or "range" IT enabled business solutions.

When it comes to vendor evaluation, depending on their size and industry influence; a successful vendor relationship will be as vibrant in the intermediate to long term as it was during the buying/selling cycle if all parties collaborate and share what they are really trying to implement. The strategic vendors should share the same vision and direction together with their clients. High mature vendor relationship management entails communication, partnership, collaboration, governance, and value analytics, etc, all these need to be effective to have close alliance and strong relationship management.

Negotiation and contract management: Communication, including negotiation, is not for its own sake, but about making certain tradeoffs for getting considerably fair deals. Negotiation is a crucial communication method to build partnership; contract management is an important discipline to ensure both parties agree on certain terms for quality products/services deliveries. It’s up to the management’s understanding and negotiation capability to face and address the challenges. Service level agreement needs to have meaningful penalties so that vendors can fix problems without too many arguments.

Insourcing or outsourcing is part of business partnership for optimizing cost, expediting organizational capabilities development cycle. Moving anything outside the organization requires careful consideration of quality, cost, reliability from a long term perspective; involving internal and external negotiations, and close ongoing management of the services for ensuring the level of services contracted and being delivered.

Vendor relationship management for smooth integration and long-term partnership: As long as there is a desire to integrate process and information across the organization and the applications, there will need to be an IT organization comfortable with talking to all vendors. IT continues to grow in importance to organizations, both operationally and as a competitive advantage. An effective IT organization should more focus on vendor/customer relationship management,

IT services or vendor integration is one of important management concerns because the efficiencies of the on-demand model allow IT to bring in more applications, those applications then need to interface with each other and with legacy applications. Select and manage vendors or solutions, improve vendor relationships via a structural approach by evaluating their quality, accountability, cost effectiveness, or innovation, not just by looking at the surface, but observing deeper, evolving them with strategic dialogues, and understanding the pros and cons of their products/service more objectively.

Business vendor relationships in modern business are both art and science, complex, also critical, but it’s worth the effort to craft such a good long term relationship. The IT management main job will revolve around vendor management, strategic initiatives management, IT operational management, change management, GRC practices, championing the art of the possible, and successfully contributing information technology to business ROI. This is going to be increasingly critical to the success and operations of the future IT, as well as business agility and maturity of the entire company.

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Initiativestoinspireadvancement

There are a variety of human societies, but it is still a long way to go for shaping an advanced and harmonized global world.

We live in a diverse global society with blurred geographical, functional, industrial territories, having a multigenerational workforce, multipolar knowledge centers, multi-cultural wisdom, and multifaceted innovation, etc. It’s important to infuse digital into every aspect of the organization, make a paradigm shift from industrial economy to knowledge economy to creative economy.

Insightful leaders can bring their in-depth understanding of complex business issues, develop the next practices based on the working knowledge of past transformations into newer initiatives for leading changes to advance their organization and global human society smoothly.

Advanced understanding: The digital world is hyper-connected and interdependent. There is purpose behind advancement; there’re goals which need to be achieved through advancing thinking and actions. Global leaders and professionals today have to continue sharing their viewpoint about things or events happening in the surroundings, their perspective of future global society, their roles in making desired changes. The most advanced mind with great vision and profound understanding contributes to the common good and the collective human progress because the visionary mind has the ability to learn from the past, perceive objective reality today, and foresee the future in pursuit of collective advancement.

Advancement can be accelerated when we follow the most advanced mindsets in the world, evolving into advanced activities and movements in a consistent way to build dynamic and informative organizations. The advancement can become more reachable when inclusion becomes a cultural theme; people shape an advanced mindset, appreciate each other’s strength, complement each other’s capabilities; understand each other via empathetic mind connections, practice innovative leadership and advance our shared world.

Alignment and integration to ensure organizational cohesiveness and advancement: The world is spinning apart, integration is what brings it together. There are different complexities at a different time or dimension and there are multilateral integrations to achieve organization coherence cross-disciplinarily. Sometimes, having alignment at the top of global management concerns is indicative of the persistent, pervasive conundrum. The successful integration will depend on the underlying business relationships between different functions, all of the crucial points and how they influence each other in building solid and differentiated business competency. Business management can leverage enterprise architecture tools for gaining contextual understanding of the organization, gluing crucial business elements together, including policy, process, psychological factors around change, enabling the output from all functional areas meshing together to get a holistic solution, ensuring the business as a whole is superior to the sum of pieces.

Integration is usually complex, the impact of today’s technologies, their integration with other new technologies, seems to be more profound, especially given the concurrent ecosystem changes going on. The goal of a variety of integration is to ensure information consistency, security, and interoperability for running a high-performance business. You integrate when a justification can be made for doing so, creating a case where you force an organizational alignment to maximize the value from existing systems and fine-tune business subsystems for better business performance. Pay more attention to quality, standards, regulations, etc, to improve reusability, reduce frictions, eliminate waste, optimize processes and build a cohesive set of capabilities for achieving high-perforce results.

Building a customer-centric organization by generating personalized solutions to meet customers needs: The digital era upon us is the age of options and customization, building a customer-centric organization is at the top of business executives’ agenda in any forward-looking organization. People are complex systems, there’s convergence of hard and soft sciences of humans from a cross-disciplinary perspective. Customized solutions give customers an impression on how it can tailor their needs to solve problems in a better way.

High performing organizations seek a deep understanding of their customers’ demands and expectations. They are getting closer to customers’ needs, also looking beyond today’s solution. They prioritize and manage incremental innovation of new products for current customers and current products for new markets. They also explore opportunities for breakthrough innovation, create new business models, products or services to fit for the new generations of customers, and make significant impact on advancing human society.

There are a variety of human societies, but it is still a long way to go for shaping an advanced and harmonized global world. Real societal progress is made through the work of progressive and foreseeable leaders and business professionals who can figure out how to trend the future, capture the great opportunities to unleash collective human potential and build an intelligent and innovative society.

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Innovativeinvestment

Investment management needs to ensure that they are investing in the right business initiatives and create headroom for innovation and business growth.

There are varying changes and fierce competitions in the business environment nowadays, organizations have limited resources and budgets, but there are plenty of opportunities that they intend to grasp and so many problems that need to be solved. It’s important for the management to set criteria, clarify what investments they should direct more assets to by solving problems with priority, driving business value in terms that business stakeholders understand, generate business cases and look for investments to be justified and governed on the basis of benefit delivery.

Visibility: When people speak about an initiative generating new revenue, visibility into each investment is established to provide ongoing investment health information as well as enable understanding overall portfolio health. It’s also crucial to evaluate the impacts of investment decisions by presenting a "strategic" look to maximize the business's benefit from the investment. In fact, achieving visibility of strategy investment helps the leaders or investors become more future-oriented and discover the path to where they need to go and be persuasive to lead others in the right direction and reach the destination confidently.

Besides presenting benefits, achieving visibility of costs against the visibility of quantifiable benefits as a key strategic initiative today provides a pathway justification of value contribution to the organization's bottom line performance within each revenue stream, to improve transparency and effectiveness. The visibility of asset consumption and the capability to allocate the cost of those assets based on that consumption results in an accurate measurement of contribution to Cost of Sale (COS) that is both traceable and visible.

Profitability: Without customers, an organization cannot survive and without profitability, an organization cannot grow and thrive. Without profitability, the investment cannot reap the benefit. The challenge for investment management is about spending more resources and time on innovation-related activities to reap high profitability. The emerging technology is always the hot investment area, but in the end, it is not about technology, but what technology can do to solve critical problems, deliver strategic differentiation and reach high return on investment.

There are different variables in investment related decision-making. Evaluate each of the variables from the perspective of the original value (the value that was assumed when the investment was prioritized); current value (the value that considers the current scenario with the current costs) projected value (the value considering a conservative scenario according to what we expect in the future). The comparisons help to review investment progress, deviations, and make more effective decisions for improving the overall investment management maturity. The wise investors analyze business models that list all of the sources of value, cost, and risk, and contain formulas to interconnect them; it generates predictions for how much profit the business will make, as well as how to strike the right balance of short term gain and long term perspectives.

People-centricity: We are moving toward the people-centric age with innovation, choice, empathy. People-centric businesses are fluid, flexible, and intelligent in knitting all necessary elements together into great customer experience and drive a seamless paradigm shift. From the outside-in viewpoint, the customer is the focal point to improve business performance by developing personalized products/services to gain customer loyalty. From the inside-out, employees are the key to accelerate business performance, how to motivate them by providing personalized advice or tools to deliver higher than expected business results.

Without customers, an organization cannot survive, without high quality employees, businesses cannot thrive. People are always the most important capital investment in any organization. There are different methods, greater transparency, more engagement and retention initiatives, training, and development at every level. Good investors invest in a good business model; great investors invest in the best of the best people with entrepreneur’s mindset, value adding, and having progressive ideas, etc. When people are filled with inspiration supported by better understanding, they can better adapt to changes and unleash their full potential.

Venture investment is a complex business activity. The investment management needs to ensure that they are investing in the right business initiatives and create headroom for innovation and business growth. It's also important to show the clear business goals of the investment with critical elements such as returns, return timeline, and risk assessment. The logical investment scenario helps to assess whether the business models associated with emerging trends or people-centricity is the right investment to be done in the first place, and ensure the expected return on investment.

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Customer Relationship Improvement

In order to be successful within their industry, vendor customer relationships are important to improve products/services reliability and innovativeness.

Customer-vendor relationships in modern business are both art and science, complex, also critical. It's important to put together a complete solution that works in the best interest of all related constituencies in the business. 

Strong business relationships can create a value proposition that would move your prospects to become your clients; more importantly, to improve customer retention.

Do not show customers too many "surprises": On-time, on-value, on-cost is crucial to ensure that the products/services delivery is on the right track because one of the customers’ main concerns is the lag between the promise and the delivery. Some of other concerns of customers include such as charging further without notice, increasing pricing without reason, or getting the next software release without improvement. For many software related products/services, there are too many wants that are unfulfilled - either oversold at the point where they bought the software or missing or broken code that should have been there in the first place. Thus, to build a great vendor-customer relationship, vendors need to do the amount of up-front work to get an idea in front of enough customers, stakeholders, and others to know how valuable it takes more work than coding it, shipping it, and testing it. Understand customers' true concerns and do not show customers too many unwanted surprises.

You should be focused on the customer's needs and values. There is a strong customer perception that when an issue comes up, it will be corrected! The real outcome to aim for should be to ship a valuable solution. The only time you should set a goal to be shippable is if value is already inherently in the solution. Business needs keep evolving, and what we need today may no longer be valid a short time later. Valuable increments must be shippable and shippable increments must be valuable. The question is how to decide if it is still valuable? In today's business dynamic, implementing new software requires companies to focus on digging deeper into how optimization and negotiation processes/methodologies can provide flexibility and protections to ensure that the software meets changing business requirements over the life of the investment.

Coach customers well: New customer process changes, technology impacts, economic, and political policy trigger changes in the customers’ environment, thus, changing the need. Solutions continue to evolve but the customer does not get coached in dynamic environments. Good vendors are trustful advisors that coach customers well to improve adoption rate, customer experience, and increase productivity and innovation. The real win-win to this is when you couple the above with the ability to not only understand buyers but also synthesize that with information gathered elsewhere to identify gaps, predict their future need and continue to deliver quality products/services to satisfy them consistently.

The purpose of business is to create customers. Coaching customers well and gaining insight from them is the part of improving customer experience, which is how you feel about the whole process. Customer experience is the sum of all thoughts, experiences, feelings, reactions, attitudes, etc, that customers have or will have in regards to using or potential using of your products or services. With these insights, organizations acquire the ability to reshape products, services, and customer engagement. The management needs to clarify: What are the distribution channels, sales channels? How do we add value for each product/service, and how to deal with a “make or break” situation where we build a vendor-customer, partner-relationship for mutual benefit. At least, this is how people-centricity should be pursued to improve the value delivered to the customer, and customers need to be coached accordingly.

Vendor Relationship Management is a structural management effort: On the vendor side, the customer is the center of their products/services deliveries. On the customer side, sourcing can no longer just consider cost, it's also about evaluating vendor's quality deliveries, innovation capabilities, leverage expertise, add alternative brainpower & talent pool, and build up solid partner relationships for the long term. Balancing cost, quality and location in a 24 x 7 world isn't easy, they need all the sourcing strategies and options they can find and take a structural approach to manage vendor relationships effectively,

The environment has become so competitive, in many cases, the cost-saving potentials are being watered down and questioned. To keep the lights on and build competitive necessities, it makes sense to find a sourcing partner for the necessary activities of a business that are not core to how you go to market and make money, no matter where you choose to have the work done. The next generation of vendor relationship is about how to well manage the mixed bag of diversified vendors, multi-faceted partnerships, co-ownership of ventures and companies, contracting, etc, to deliver innovative solutions and accelerate business speed.

It is without a doubt that many organizations have come to the realization that in order to be successful within their industry, vendor customer relationships are important to improve products/services reliability and innovativeness. A trustful vendor focuses on process optimization, customer-tailored, on value deliveries, Business management has to focus their efforts on developing good vendor relationships and customer experience, to build a people -centric organization.

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Negotiate to Win Fairly

Generally speaking, communication is to unify, not divide; negotiation is to win with the purpose, and make a deal fairly, professionally, and gracefully.

Today’s business world has become over-complex, hyper-diversified and interdependent. To solve problems large or small, we need to harness communication and enforce collaboration. We dialogue when we communicate. Communication is much more complicated because there are differences in goals, contexts and styles. Each type of dialogue has its use. 

We “argue” to open a new perspective; understand the other point of view and learn something from it; we “debate” to explore critical thinking from a non-biased perspective. And we should do a significant amount of “negotiation” to make agreements and keep things moving forward with an intention to make “win-win” possible.

Clarify a set of purposes and goals: Communication, including negotiation, is not for its own sake, but about understanding and solving problems, making certain tradeoffs for getting considerably fair deals. So good negotiators are good communicators, great negotiators are great strategists. They are mindful, articulate and informative, demonstrate strong logic to understand their positions, the problems, perhaps chains of problems they need to solve; they also understand the other parties well and treat them with professional manner. They “keep the end in mind”- clarify well-defined purposes & goals of negotiation, well prepare all necessary information for a prioritized agenda, convey the right message in the right formats (presentation, debate, chat, etc,) to tailor the situations at the table for harnessing negotiation effectiveness and enforcing partnership.

Excellent negotiators are visionaries - help others to see the future unfolded; educators - teach others something they perhaps do not know; business “multi-linguists” - switch back & forth from diverse business dialects (finance, information technology, architect, etc) fluently - not just for engaging, but to avoid “lost in translation”; independent thinkers & informative persuader with contextual intelligence- if you want to be persuasive, you shouldn’t just wear the old thinking box or blindly follow others, you intend to understand, interpret, and judge something, you need to form a critical opinion of it based on facts, discerned data, in-depth understanding, and clarified notions; last, but least, an influencer - you need to be unique and impressive, if the RULES are fair, you can stand out, because you are able to influence the atmosphere based on your positive energy, versatility, and you are a intelligent problem-solver, not creating too many issues.

Professional attitude & aptitude: Negotiation is one of the most critical professional communication activities all over the globe. Either formally or informally, attitude matters. Although attitude is basically ''how we react to any situation that comes up?'' It’s not enough for good negotiation. Because we need to take a proactive attitude to foresee, understand, and prepare for it. Open your mind - listen carefully, expect to learn from other parties, read between the lines, listen to what is not being said, and find some new insight. Be direct to hit the point; be indirect or give some hint for harmony. Respect self and other parties with empathy by being non-judgmental, active listening, and balancing between tolerance and understanding in getting your message across.

At the negotiation table, everything is dynamic, some are under control, some perhaps not, there is no “one size fits all” approach to addressing the different psychological responses and thereby reducing anxiety because there are different psychological perspectives, cognitive abilities, communication skills, or emotional maturity, etc. Effective negotiators are working hard to engage other parties, spread clear messages throughout the negotiation sessions, take a diverse set of activities with mixed communication styles, and keep communication flow with verification. They have a positive attitude, high talent, and are passionate about their work to achieve more, and demonstrate strong professionalism and maturity.

Verified information and updated knowledge: Nowadays, information is the silver lining and knowledge is power, either speaking at the negotiable table or smoothing the links via communication, good negotiators are good “informants” - in the knowledge or expertise which they bring to bear on the problem. Information has a variety of meanings such as colloquial, professional and technical, there’s good information and misinformation; fresh knowledge or outdated knowledge; they can discern, verify, and use them properly. In fact, well-prepared negotiators should always have relevant, quality information, and professional knowledge to let their data talk for improving persuasiveness and make their decisions rich in information.

The data support negotiation story is not always tedious; even if it is so, it’s necessary to make their conversations rational. Good data clarify our thoughts; good knowledge keeps content enriched. Insightful negotiators understand the process of connecting several verified data items (argument premises) to effect a change in knowledge as “reasoning,” whether the change is occurring in your own mind or intended to change somebody else's mind - 'persuasion.' If done in a careful manner, paying attention to the truth and plausibility of the premises, their support by additional 'evidence' data, and the 'validity' of the argument patterns, with the aim of making agreements. Negotiation needs to be persuasive; persuasion is related to the form of reasoning - the form of selectivity in the presentation of data. Ideally, an information-based negotiation story could be compelling to improve transparency and build trustworthy relationships.

Focus on problem-solving please: As many things in the world, the value from negotiation is multi-folded. Besides crunching the number, we need to make wise investments in the future and encourage constructive behaviors. Even if negotiation is an activity for professional competition, good negotiators show the care and have a frank discussion with other parties about what is possible, and what they plan to do to remove obstacles. Always focus on improving the situation and solving real problems, do not crunch numbers only, fix symptoms, play politics, take lip service, but make every negotiation session value driven to turn around the tough situation. It will take far more effort & diligence on your part to make negotiation a fair game to win heart and mind.

Great negotiators are not only result driven, but they also enjoy such learning experiences and discover the hidden values besides the benefit from the hard numbers. They not only rush to solve handy problems, but also be open minded to make proposed connections of single arguments into a larger picture where they can perceive more professional value to orchestrate another negotiation, solve even bigger problems and make higher achievement. So they develop fresh energy and excitement to make a seamless transcendence from a great negotiator to a great leader who is not just a communication master, but a visionary transformer and business master.

Improve the maturity level of negotiation -to make partner relationships a win-win situation: Negotiations could be exciting and stressful. Winning could be satisfying or frustrating. Technically, "Win-Win" could be translated to mean "mutually beneficial" and should be seen as a negotiation guiding principle which emphasizes fairness in the modern business world and our civilized society. Win-Win Results: can emerge when the two or more parties stop fighting and begin to share their objectives and interests and discover common benefits. In reality though, most win-win situations may leave one party feeling frustrated and confused. You’re trying to figure out how you come out a winner. You see how the others win. But your winning seems more like “less losing” or even winning is like losing psychologically. So how to deal with such negotiation dilemmas effectively?

Great negotiators are high professionals who reach their professional maturity intellectually, psychologically and philosophically. They intend to follow the big principle of “win-win” even if there is a paradox behind the conversation, there is emotional imbalance to deal with, and there are quite a lot of historical lessons & business cases to learn from. They can dig into both the “cause & effect” of winning scenarios thoroughly and improve their communication maturity intellectually by pondering: Have we won based on our competencies, talent, professionalism? If we lose, can we calm down and learn something from it?

Psychologically: How does Win-Win raise our confidence, stimulate our positive mentality, and improve our professional quality?

Strategically: Do most win-win deals have an exit strategy?

Philosophically: Is winning making us a step further in pursuit of truth, not just our personal truth, but a more objective truth, and make us wiser at all?

…
It’s debatable whether that “Highest Point of Satisfaction” for all parties can actually be known and reached, because satisfaction is again each parties' perception, which is not easily defined.

Generally speaking, communication is to unify, not divide; negotiation is to win with the purpose, and make a deal fairly and gracefully. More often than not, it’s not a one time shot, therefore, remediation, revision, and renegotiation should always be options. Make it fair and professional as there’s no party that can dominate at the negotiation table from every perspective. Encouraging the mindset of equity and fairness should in theory build better long term business relationships.. Still, keep the “rule of the rule” in mind: negotiation is a type of professional communication, not for its own sake, but to solve problems and improve humanity.

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People -centric Involvement

The journey of improving business maturity is more evolutionary than revolutionary; the highly complex and dynamic digital business system needs to be elaborated in a well-organized effort with a variety of shareholder involvement.

As the digital world becomes hyperconnected, interdependent, and dynamic, the industrial silo and old boundary has been broken down, the digital business ecosystem is ever-evolving and interdependent. Highly innovative organizations naturally have closer connections between functions and all functions and hierarchical layers are more intimately involved with the market and each other on a regular basis. 

Different shareholders get involved in various business activities and playing significant roles in catalyzing change and exploring multiple pathways for unlocking business potential.

Involve talented people by giving them active roles in the business initiatives or real world problems: Statistically many employees do not feel engaged in their work in many companies. The goal of workforce engagement is to inspire creativity and improve productivity, make people feel important, appreciate and reward them. Cognitively, learning and creative problem solving is a deliberate mental effort involving disabling some of the old “wirings,” and making new connections, exploring the mental process of acquiring new knowledge through thoughts, experiences, and senses, removing old and establishing new relations. Practically, to solve complex business problems, multidisciplinarity must be applied within the context of the values of the organization with a healthy cycle of learning-doing-improving.

It’s a hybrid, networked, extended modern working environment, one of the digital management principles is to encourage talent growth, create synergy by putting the right talent in the right position to solve the right problems. A technological point of view that the amount, sensitivity, and capability of the available tools for engaging people is improving steadily so people are empowered to self-manage, invited to brainstorm and contribute to either strategy or innovation, and encouraged to take initiatives for solving problems large or small proactively. The management can evaluate employee engagement through the outcomes of productivity or creativity, or through the performance drivers-the elements that enhance an organization's execution capacity.

Involve vendors and business partners to build core business competencies: The partnership management is both art and science. Having close alliance and strong relationship management harnesses business competency and improves products/services reliability and adoption. To expedite business development cycle, those organizations that have innovative vendors or more mature alliances can be more responsive to changes, have better chance to the success of business model reinvention, and outperform their competitors. It entails effective communication, partnership, collaboration, governance, and value analytics, etc.

Methodologically, there is a need for formal communication paths of gaining approval and creating an atmosphere of transparency in partnership management. A trustful vendor focuses on process optimization, customer-tailored on value deliveries, and there's always an opportunity for improvement. It’s better to have a level of rapport to ensure formal communications are not misinterpreted and partnership is enforced, critical domain knowledge centric activities are encouraged and business innovation driven initiatives are managed effectively. Strategic alliance goes beyond conformity and order taking so that strategy management, change management, and people management work in harmony. Well rounded vendors and partners work with their clients across industries, across cultures, accumulate many success stories and initiate knowledge transfer innovations.

Involve customers in the solution every step of their way, implement the solution, obtain feedback and determine further actions if required: When managing the innovation life cycle, customer involvement at all stages often elicits highly valuable information. The digital era upon us is about customer-centricity. The customer should always be involved in development of intuitive products or services or delightful customer experience. When you invite customers in the conversations, really understand or attempt to understand what the customer would say they want and what you found they actually want, that is when you can really develop an experience that fits them and their needs or desires.

Customers cannot solve your problems, but they can provide insight into their goals, their process, their problems, their context is invaluable. Customers may not always know the "products" they want, but they clearly understand their needs and pains, so involve them as early as possible in the process. Customers appreciate it when you listen and treat them with respect and concern, also give them the optimal platform choice to communicate with your brand. It's important to build tremendous trust and user-focused engagement and show Respect, Relevance, Intelligence. In early stages of customer relationship, you need segment based modeling, but after more data comes available in a relationship and more importantly, customers are more willing to share insights and participate in digital dialogues continuously.

The journey of improving business maturity is more evolutionary than revolutionary; the highly complex and dynamic digital business system needs to be elaborated in a well-organized effort with a variety of shareholder involvement. In fact, there is an ever-greater ability for businesses to create engagement around very specific goals, such as employee retention, customer satisfaction, strategic alliance, talent acquisition, or multi-generational workforce facilitation with the very goal to run high performance and people centric organizations.

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Assess IT Applications by Setting Good Criteria

Make an assessment of IT applications by setting good criteria and reporting/analytics about what you have, who uses it and how much, who pays for it, how much it costs, etc.

Due to the increasing speed of change and the overwhelming growth of information, business executives really do see value in emerging digital technologies. And they're strong believers that the future will rely heavily upon information technology. At the same time, they're frustrated with "outdated" IT-led business solutions that don't live up to their expectations.

To reinvent IT as a strategic business partner, IT organizations must speed up to deliver qualified business solutions timely. Make a “lean and mean” approach in which you assess all applications on the following criteria:

Business value: IT application development can add value to any organization if it understands the various business lines needs and wants; it can provide cross line synergies by understanding the various functions, providing efficient interfaces between lines; and bringing up the most business value. IT management needs to clarify the expected organizational internal directions and goals, understand the direction of the IT industry, and ensure that application development does not proceed without a "clear business rationale."

In many IT organizations that get stuck at a low level of maturity, sometimes, IT focuses on overcoming technology challenges, without solving business problems and creating business value. Or the significant portion of their applications are out of date, but still running to support business activities. They are unable to demonstrate the value of application portfolio management. Thus, IT leaders should play a key role in driving business improvement and make sure their application development as evolutionary innovation efforts to deliver business value.

User satisfaction: The digital era upon us is about people. Customer-facing applications are critical as at the end of the day, they generate revenue for the business. Point out that customer inquiries are not just support related, but can foster the better ways the application can perform and optimize every touchpoint of customer experience. An intuitive user interface makes high-quality software even more qualified. Customers are the center of innovation.

Many times, a lack of user adoption is one of the issues to fail new software applications. It’s important to empower users, get users or customers to choose the ideal solution for their work; from this, IT can build up a profile of a user or group of users and understand their work-style. If there is an outage, it normally has a direct impact on revenue and draws consequently attention of the top management. Analyzing defects gives you information on where to improve your products/services, and prevent similar defects in the future. The goal is to improve customer satisfaction and make continuous deliveries.

Support/training cost (business and IT): The majority of IT organizations spend a significant amount of resources and budgets to “keep the lights on.” IT management should scrutinize things like IT budget, maintenance costs, new software development costs, training, etc. They need to ensure that IT supports the achievement of strategic goals and tactical business objectives. IT delivers perceived added value products or services at a reasonable cost, and IT delivers to operational and service level agreements and commitments. The budget should never be an excuse to not provide the organization with the skill sets it needs to move forward. Training doesn't have to be expensive to be impactful.

With the “Software As A Service” on-demand model, the business can order commoditized IT services from third-party vendors easily. IT managers need to make an objective assessment - which apps should be built in house and which ones can be bought from vendors; the goal is to manage cost scientifically and shorten the development cycle significantly. IT executives should also enforce IT governance/oversight to guarantee that development maintains conformance to that business need, and the combination of quality and price for any given service feature is competitive for delighting customers and comparable to the marketplace from a cost/performance perspective.

Skills available and alignment: IT skill gap is a reality. The highly technical programmers and engineers with deep knowledge and enriched experience who can handle the heads down technical tasks are always hard to find. Specialized IT generalists who have the right mix of technical, business and leadership skills are also crucial for management and senior leadership positions in today’s IT organizations to accelerate IT transformation, as the pool of talent with business savvy and tech knowledge will be drawn dry quickly.

Both attitude and aptitude count, make sure talent alignment with the strategic direction of IT. Every true IT pro is behind the curve on specific skill sets and wants to learn new stuff. Well define the updated competency model, assess the talent’s overall professional competency to solve problems, strike the right balance of learning capability, character, skills, knowledge, communication, and energy within the team. Being able to succinctly identify what training is needed and develop those necessary skill sets to the business are critical deliverables for organizational goal achievement

Vendor viability: IT vendor relationships are important to improve products/services reliability and innovativeness. A trustful IT vendor focuses on process optimization, customer-tailored, on value deliveries, and there's always an opportunity for improvement and delivering “grade" or "range" solutions. Great IT vendors do not necessarily deliver "complete solutions," but, the best possible solutions, help customers overcome real business obstacles or add value via well-defined KPIs, that's the key to building up a win-win situation.

The innovation capabilities IT vendors can provide to their clients are to connect the dots and deliver premium applications. By offering a range of solutions, each with different results and budgets and risk profile, the vendor can actually help clients surface and resolve their internal conflicts and improve IT manageability and innovation competency. Those IT vendors work with their clients across industries, across cultures, accumulate many success stories, can help their customers avoid pitfalls, or modernize legacy applications via borrowing the fresh idea from a totally different industry or culture.

Make an assessment of IT applications by setting good criteria and reporting/analytics about what you have, who uses it and how much, who pays for it, how much it costs, etc. Take the “lean and mean” approach, share some best practices about how to rate/rank/optimize the application portfolio. At the end of the day, everything that an IT organization does is for the end customers, make some quick wins and use this to support other initiatives, and focus more on governance and long-term benefits.

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A Cloudified IT

A Cloudified IT is not Cloudy.

The majority of organizations today has already adopted cloud-based IT services in a certain way. One thing for sure - Cloud is here to stay and it will be changing the paradigm for running IT and business as well. The simple fact is that CIOs have to consider the cloud within their long term strategy. However, cloud adoption depends on many factors including partner availability, costs, reliability, and connectivity. Is a cloudified IT less-cloudy? And how to push the cloud envelope with thoughtful planning & solid action?

Value Proposition:  It depends on what each individual internal IT department does to respond to the competitive challenge. Those who think strategically will map out a  cloud strategy which uniquely identifies the value proposition to the company and how public cloud services compare and fit in. 1) Talking about committing to the cloud or not is not the right way to approach IT meeting the needs of the business. You  need to start with understanding the business opportunities that IT can deliver solutions to that will increase top and bottom line performance as well as increase opportunities to deliver to current and new markets.    2) Cloud allows IT departments (and all other departments for that matter) to focus on being more pro-active and strategic vs. reactionary and redundant. Cloud computing has the ability to actually bring IT much closer to the business. It will free up considerable amounts of time for IT staff to innovate and take a leading role in contributing to the overall business strategy. 3) Perhaps the first step, which IT has yet to do, is to understand in total what services they do offer, benchmark those services (deliverables, quality, and price) against cloud services - and create an investment-based budget

Strategic Planning: Businesses need to have an overarching cloud strategy as an integral element of corporate strategy. Those IT departments that do think strategically are building a value proposition around core services while portraying the public Cloud as a platform for non-core, consumer like services with cost efficiency. Organizations, which do not create strategic capabilities of integrating on-premise, private cloud, and public cloud through appropriate over-arching infrastructure with relevant GRC model, will create a 'bigger' gap, increase business vs. IT friction and increase IT costs, by their cloud initiatives. Going cloud may not always be more cost effective, faster, or more reliable in every situation. Overall strategy and business requirements are still at the heart of providing effective solutions

Architectural Conversation: An Enterprise should understand its EA before shipping parts of IT out to be managed by third-parties; organizations also need EA afterward to manage the complexity in the cloud. EA is about ensuring the maximum payback for an organization's IT investment. Much of this has to do with complexity management. If the IT solutions are available in the cloud then IT can consider those options along the side of in-house or hybrid delivery models. The conversation above still requires capable BA's and PM's to work with the internal business no matter what delivery model you use. These skills are going to continue being a value add proposition that IT can deliver to organizations

IT Leadership: IT is not going away, rather It’s the opportunities for IT to deliver solutions faster via enablement by viable cloud solutions and hence faster means more business solutions can be solved in the long run. The use of a cloud solution is one of many choices that an organization should consider in using information and technology to manage digital transformation for the long term. As a key member of the corporate executive team, the role of the CIO remains one of helping the business maintain its competitive advantage through greater efficiency and customer service, even stretching out its goals, to help the business achieve agility. Today you must consider the cloud, advance in communications, social media, and array of mobile technologies. The CIO must also understand how the business operates, the opportunities technology and information science offers, and the value of adding business analysts who can help business units reap the benefits from these technologies.

Vendor relationship management for smooth integration and long-term partnership: When cloud solutions are a good choice in a given situation, the vendor relationship and quality of service will, as it always has  a key variable. As long as there is a desire to integrate process and information across the organization and the applications, there will need to be an IT organization comfortable with talking to all those cloud providers. As IT moves more applications to the cloud, there'll need to be more IT involvement, not less, because the efficiencies of the cloud allow  to bring in more applications, but those applications then need to interface with each other and with legacy applications. And while you can buy technical expertise for the cloud applications, you cannot buy internal process knowledge.

Cloud Governance Model: In order for a cloud initiative to succeed, a clear governance model must be in place and tied to the greater IT risk management and controls regimen. If the goal is to expand the extent to which the cloud is utilized within an organization, the manner in which these controls are implemented take on an even greater importance. In fact, forward-looking CIOs will be more focused on SLA management and creating better IT-enabled business models. With strong governance discipline, IT can become a true business partner to say yes while not compromising GRC principles and well-educating business upon the potential risks Cloud solution may put on their organizations.   

A Cloudified IT is not cloudy, it is a paradigm shift for IT, and will take some work to refine the culture and restructure - but, it is being done by many organizations that embrace the future, and it should shine through laser focusing on business visions and goals.

Read More about The Themes of Modern IT:
A Digital IT

A Cloudified IT

A Change Agent IT

A Multi-Dimensional IT

A Strategic IT

An Analytic IT

An Agile IT

A Hybrid IT

An Innovative IT

A Value Creator IT

A Forerunner IT

A Transformational IT

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