by Andrew White | August 26, 2014 | 2 Comments
I was on an inquiry today with an end-user. It went like this:
- “We have an ERP system –its pretty much stable and OK – but the data within it is not really at the level of quality and consistency we need. We thought we needed to adopt MDM.
- “We have new and emerging requests to clean and govern that data, or some of it – along with other data – used and likely to be used by other applications and even our customers
- “We have a Systems integrator advising is “not to worry about MDM” per se, and instead to “do a complete new ERP replacement since newer ERP systems are better at doing MDM”
Really? Um no, that’s not true. That is mixing metaphors. Why use a hammer on a screw?
ERP systems were NEVER, and are NOT NOW, designed to “do MDM”. They might today do a better job of managing their own (application specific) data – but that is NOT the same as MDM. MDM came about due to the need to govern information (for re-use) across multiple applications or processes, whatever they are called. There is a certain overlap or similarity, but the two efforts are quite different. The ERP focus is ERP – so managing data in the ERP system. And MDM focus is not ERP focused – it spans ERP and any other application that published to or consumes from, ERP and any other application. Note that MDM is not “wall to wall” either – whereas ERP was once part of that sales pitch!
I get the feeling the System Integrator was selling this end-user “the old ERP road map of the 1980’s”. This old model would go like this:
- Sells ERP for a large amount of money
- Get to “user acceptance” as fast as possible *
- Get payment and get out of there ASAP
- Go past “go” and get paid again: Get called back, typically 9 months later, for another gig to “help clean up the data and ‘do’ that information governance thing”.
* Software and consulting vendors have little interest in selling you the ideal, up to date, road map for ERP that INCLUDES the needed information governance to include “before ERP, across ERP, and after ERP” since they are trying to sell THAT at a higher price than the original ERP footprint (w/o information governance). They would much rather you come back for more – and keep feeding their bank account. In a fair world, ERP would be CHEAPER, and part of the difference in cost would cover the MDM and information governance part. But that, my friends, is all in the art of the negotiation.
Here’s the kicker: though I refer to ERP, any 3 letter-named application suite counts just as well here – CRM, SRM/Procurement, SCM and so on. Even “application developed” and industry-specific application often works as well.
Category: Application Development Business Applications CRM Customer Data Integration (CDI) ERP SCM SRM/Procurement Tags:
by Andrew White | August 26, 2014 | 2 Comments
In the US print edition of the Financial Times this weekend I read an article looking at the
ECB president, Mario Draghi, calling for increased European government spending and relaxation of austerity and budget rules (see Draghi soften tones on austerity). This aligns with the high spending Italian position, and is diametrically opposed by the fiscally prudent German finance minister Wolfgang Schauble and Bundesbank president Jens Weidmann.
Due to persistent high unemployment and growing danger of deflation, the ECB is signaling that the Euro zone should spend its way out of trouble. Yes, you read that right. As if increased debt on what was a debt driven recession, helps. Yes, there is need for structural changes in Europe (changes in restrictive hiring practices, reduced government subsidies to inefficient industries etc) but that is not the kind of spending the high spending countries engage in (think Greece, Italy, Portugal, and Spain). They would increase funding for pet projects and wasted re building of perfectly good sidewalks.
Worse, this difference of opinion between the ECB and the Bundesbank reflects the real two tiered nature of the Euro zone. Fiscally prudent Germany and the northern bloc do not need or want to inflate spending outside of private sector growth, and want higher interest rates to slow growth factors. Such increased investment would stoke an unbalanced economy and sows seeds of economic pain much later. The southern, Mediterranean and profligate regions don’t care for the private sector as much and assume big government spending can replace it. They seek lower interest rates to help keep money moving towards loans. It is a fundamental difference of opinion in how economies work. It is imbalance that is painted over with a single currency.
The stresses between the two tiered Euro regions continues apace.
Category: Economy Euro Politics Tags:
by Andrew White | August 26, 2014 | 2 Comments
The CEO (Melissa Kieling) of Packit.com was on Squawk Box this morning and it was such an awesome story. This lady was a single mom, with less than $100 cash to hear name. She had struggled, like many of us do, with how to give our kids fresh, healthy good at lunchtime at school. Through experimentation, re using her shower curtain and plastic bags, she came up with a super idea that is simple, easy to use and clean, and is a hit with consumers. It’s a lunch bag that can sit in the freezer overnight – and keep food fresh for up to 10 hours as a result. Revenue last year was over $11M and this year it will be even bigger.
We have not yet tried the product but I get the feeling we shall have to acquire a couple of units to try them out. Demand suggests they are working a treat.
There is hope for us all!
Category: Economic Growth Entrepreneur Tags:
by Andrew White | August 19, 2014 | 3 Comments
More of the story of the failed submitted bank ‘living wills’ leaked out yesterday, on the front page of the US print edition of the Financial Times (see Fed blow to global banks over ‘living wills’). All of the required eleven banks have ‘failed’, according to the Treasury, with the submissions of a living will. Regulators required them to submit a proposal that would help alleviate a repeat of the financial crisis we just experienced. Well it seems the process so far has been almost a fiasco.
It turns out that banks had to make assumptions as a basis for their living will. One assumption followed the behavior of the Fed in opening up a ‘discount window to allow banks to borrow from the Fed at short notice. This active helped stem the tide of the panic that we driven from fear of lack of liquidity (due to an inability to value toxic assets). Without the discount window, no emergency cash flow, no bank operations, kaput.
The regulators are now sayings the banks cannot make that assumption as they are. Not supposed to use public money. Well that’s all well and good but why didn’t the regulator lay out the rules before the pupils sat down and did the test? Seems like the teacher changed the rules after the exam! What a waste of time. Then again, let’s think about this a second….
The goal is to come up with a plan to accommodate a safe break up of a bank that has failed. The circumstances for this failure are likely to be catastrophic. As such, it is hard to predict timing and actual behavior of agents involved in the event. By definition if the failure is catastrophic, how can we predict how the Fed will behave?
The bank’s seems to suggest that some limited Fed support might actually help the wind down of operations more smoothly. This may or may not play out in reality. The actual requirement from the regulator is to wind down a bank “safely” without any safety net from public funds. That seems to be almost impossible and somewhat Herculean.
In the last financial crisis bank’s had assets that no one wanted. As such, they had nothing to borrow against so shore up a run on the bank. Either they failed quickly due to loss of confidence in them, or get money for somewhere so slow the process down. If there is no safety net, and no assets, it’s all over. The Treasury and the banks ought to be collaborating and offering alternatives, in full view of the regulators.
The teacher knows as much, perhaps even less, about how the next crisis will play out. And they don’t even want to be part of the solution…
I first wrote about these bank “living will” failures August 7th: News of the Day: US trade defect mystery; Putin Fix; Dodd-Frank lunacy; Italian recession; F1; and Kabaddi – what more do you want?
Category: Banking Financial Crisis Financial Times Regulation/Compliance Tags:
by Andrew White | August 16, 2014 | 2 Comments
I thought Paul Ryan’s Opinion piece in Saturdays US print edition of the Wall Street Journal (see A better way up from poverty) was quite good. He rightly addresses the negative message implied when certain language is used related to the poor and poverty. The context is those in poverty or less well off and receiving federal transfer payments. The ‘offensive’ term is ‘takers’. The reality is that many of these folks, maybe most, are not ‘takers’ at all. They are normal folks, like you and me, that need a little help from time to time. The real issue is with those among us that get sucked into a dependency culture. Receiving benefits then becomes a norm, a right. These “benefits” even continue even when some begin to earn again. And there even some that are middle class and above that still claim some benefits. That’s probably wrong, in most cases.
Anyway the piece was as much an advertisement for his new book, due out thus next week. So he lays out his general ideas on how Ryan’s Conservatives would bring America forward from where she is today. All very nicely written. But I have two issue with the piece. First, some of his language is too high brow, complex and not meaningful. And second, he didn’t relate the change he offers to me.
First the language. It might seem a nit but I dint understand this point: “The vision also means promoting a foreign policy that rejects relativism and embraces exceptionalism, ensuring our prosperity and security.” I’m not all that dumb and I know what a large number of words mean, but I guess I missed a memo or news clips that would have given me the context for what relativism and exceptionalism means. Why can’t he be more plain and simple? Just say what the layman would understand. There are a few other examples like this sprinkled in the piece.
Second, on making this message relevant. When Margaret Thatcher came to power in Britain she was ousting an over spending, bloated, over bearing left wing government. Her message throughout the campaign used a strong metaphor that allowed the average punter to perceive her relevancy, far more than the suits in Whitehall on the left and right. She talked about being a housewife, and how she had to balance the books, and provide basic things to her children, and when and if they could all enjoy a little self-indulgence. She would talk about responsibility to each other and how she would ‘put back’ into society rather than assume society would give to her. She made her policies real; she made them relevant. Ryan is lacking this. His article, his ideas in it, and possibly his book, are all very good I am sure. But until he and the Republicans can bring the policies down to earth” I fear the worst for 2016.
Category: Paul Ryan Political Poverty Republican Tags:
by Andrew White | August 15, 2014 | 1 Comment
I said some months ago now that income inequality would be a hot topic for the next US general election. I am convinced of this even more. I was amazed to see that Standard & Poor, a rating agency, published a report on the topic. It was titled, “How Increasing Income Inequality is Dampening US Economic Growth, and Possible Ways to Change the Tide.
This is a complex topic that needs some context. First, is income inequality increasing? How is this measure defined? Are the assumptions underpinning that definition valid? Also, what is the cause for any such divergence in income, and is a resolution or reversal of said divergence good? Good for whom? And how would such reversal be achieved?
In a nutshell, here is my analysis:
- Yes income inequality has increased but only recently. There is ample data out there that suggests, in general, it has not increased over the last 30 years. Only in the last 5 has it diverged, slightly. This hog wash about “last 30 years” was recently exposed in Thomas Piketty’s new book – I blogged on the exposure of such fallacy – see The Promise of Piketty (new book: Capital) Doesn’t Hold Up.
- The single largest cause of this recent divergence is Quantitative Easing (QE). The US government, in trying to cope with its own self-inflicted slow-growth policies, has encouraged the Fed to pump so much money into the economy so that rich hedge funds and investors have taken advantage of cheap loans and near free money. I have not taken advantage of this money – and I would guess neither did you. So my income didn’t change. In fact in the last 10 years my position with respect to the population has been unchanged, or slightly fallen! But those that had millions of dollars before QE now have even more. The rest of us have less in comparison.
- Is this widening gap bad? We don’t’ know. There is a related argument that poverty is also increasing, due to the widening gap in income. I don’t accept that on face value. There is ample evidence that what we mean by poverty is not even valid; and that what qualifies in 2014 is very different to what we meant in 1914, even 1954. See my blog on The Tyranny of Numbers: Measurement and Misrule, by Nicholas Eberstadt.
- How do we reduce income inequality? Not sure yet but QE has to stop. However, as interest rates recover, and investors move their money from stocks and bonds into cash, they will reap the rewards more than the less well off, who have less to save. What is needed is strong GDP growth that would create a surplus of the state to increase funding in education and welfare. It seems we are going to do this, but from a Federal perspective (being far removed from those parents, children and teachers involved), without any surplus (i.e. more borrowing). Oh well. Nice try.
Here is one of my recent blogs on the topic of inequality and productivity: The Productivity Puzzle – The One Solution that can Negate the Inequality Issue.
And today, in the US print edition of the Wall Street Journal, there was an Opinion piece reviewing the S&P report, titled, “The supply-side case for government redistribution“, by Alan Binder, a professor of economics and public affairs at Princeton. His article starts off nicely showing how the S&P conclusions are in fact spurious or flat wrong. He then ends the article with some good advice, though based on a false premise that inequality is rising “for the last 30 years” and so is a drag on the economy.
He starts off by demonstrating data that shows how spending patterns for the vast majority of Americans do not in fact differ. The ‘vast majority’ here represent those with family income levels of between $20,000 (near the poverty line) and $200,000 (top 5% of earners). The impact on spend does differ for those at the extremes- below $20,000 and over $200,000. But the majority is not that different in terms of habits. So where is the drag?
Mr. Binder has some great suggestions, oriented on ‘equality opportunity’ as opposed to the fallacious ‘equal outcome’ school. Government should invest in education and welfare, most especially for those that are less well off. Yes, I agree 100%. There is a related issue here- who, federal or local government, is best situated to determine what is needed in each region. But let’s ignore that hot potato.
Lastly, Mr. Binder states, “Inequality has risen so much in the last 35 years that it may now be retarding economic growth on the supply side while leaving us with the finest government money can buy.” No, I don’t believe inequality has risen that much in the last 35 years. Second, poverty in 2014 is a whole better than poverty in 1914, or even 1954 for that matter. Transfer payments to the poor have ballooned and now represent over two thirds of federal spending – see A Nation of Takers. So I do accept his premise, supply side conditions might have an economic drag though this is in spite of all the educational and welfare peddling the federal government has done. Since that spending has not helped, shall we try something different?
Category: Economic Growth Economic Productivity Economy Income Inequality Inequality Quantitative Easing (QE) Transfer Payments Tags:
by Andrew White | August 15, 2014 | 2 Comments
The US print edition of the Wall Street Journal carried an article titled’ “Postal Service Faces Fight Over Cutbacks“. Incredibly 42 Democrats and 7 Republican and 1 independent clubbed together and asked the Senate Appropriations Committee for a year ban to a proposal by the Post Office to save $750M. The proposal from the Post Office is to close some facilities and cut 15,000 jobs. The result is that some first class mail that gets delivered in a day would arrive in two days. Oh dear, what a shame.
For some reason a defunct business model is being perpetuated. The Post Office now delivers more packages than letters but it is structured to deliver letters; more mail is sent electronically but it doesn’t even compete in that market; and the regulation preventing innovation in the Post Office has resulted in a dinosaur with no ability to adapt. The agency, with 600,000 employees, reached its credit limit of $15 billion with the Treasury Department in 2012. Yes, credit limit! The Post Office is so broke it owns you and me $15 billion! It’s just incredible. It is so mind bogglingly incredible it beggars belief. How on earth those senators can do what they do is beyond me. No argument can justify such madness. Perhaps the dinosaurs are not running the Post Office. Maybe they are on the Hill.
My last blog on this fiasco: How not to run a business? US Post Office sees gain in lost weekend.
Category: Economy US Post Office Tags:
by Andrew White | August 14, 2014 | 1 Comment
If you think about this, its quite ovious really. If you, as a patient, are identifed in a medical record at your local general practitioner, you assume that the Doctor at the local hospitcal has access to your latest medical information when diagnosing your immedate concerns. Same for the local store where you get your medicines from. Same for the insurance company you employ. So EHR’s have evolved to such a degree that organizations that work closely with other can integrate the necessary data to ensure that important, pertinent information is shared. So far, so good.
But what happens if you now change insurance provider? What happens if you visit an out-of-town medical facility, and happen to be unconcious at the time? Would you want the local resources to have the same information about your history, conditions, alergies? Well yes, there is some merit in this.
So the Electronic Health Record Association has come forward, as reported in Information Management, to ask the obvious. How on earth to we ensure consistent master data – in this case patient (that means you) across EHR’s, exchanges, even the nation?
You can read more here: Health Information Exchange Requires Nationwide Patient Data Matching Strategy. I wonder what the answer will be. More government regulation?
Category: Electronic Health Records MDM of Patient Data Tags:
by Andrew White | August 14, 2014 | 3 Comments
This is in relation to the front page article in the US print edition of the Financial Times, August 14, 2014, titled, “Smaller Chinese cities opt for quality of life over GDP as measure of success”.
OK so this headline has impact. It seems to imply a very human-relevant, man-over-economy, warm and fuzzy feel to it. It even sounds “fair” and logical. But as you read through the article, alarm bells start to go off in my head. This is about at least two threads.
First, Chinese officials get rewarded on how they perform against metrics. Isn’t that a good idea? Well it seems that when GDP is the main, or only, measures of success, these mandarins do everything they can to grow GDP. Isn’t that a surprise? Well this results in increased inequality and also harm to the environment. It’s as if we didn’t know that for heaven’s sake! So smaller cities are dropping GDP and selecting other measures that might focus efforts on growing living standards for poor residents and reducing the numbers of people in poverty. Guess how this will work out?
The second thread is broader: how can you actually ignore GDP as a measure of success, and still deliver on the goal of reducing inequality, reducing poverty, and sustaining the motivation to do anything worthwhile? The fact is that GDP, for all its warts, describes a situation where there are funds generated that we can collectively put to good use. Turns out there are different ways to generate GDP; and there are different ways to enjoy its spoils. Our “leaders” can do neither well since they a) argue and end doing nothing, or b) focus on their own benefits more than others– so let’s just drop the whole idea then…
GDP does not have to be the only metric. It could be part of a balanced scorecard. Oh, there’s an idea! GDP does not have to grow every time at the expense of the environment or by giving only to the rich, as if the poor had something taken from them.
The Chinese cities should be using a balanced scorecard approach. GDP should be focused on providing the luxury to read free newspapers in which articles explore how to help those in poverty, and to help those in poverty by using taxes to pay for better education and healthcare. How can you pay for these things if the economy has no surplus? Do you just print money? No GDP, no money.
Category: Analytics Business Intelligence Economic Growth Economy GDP Tags:
by Andrew White | August 14, 2014 | Submit a Comment
This concerns an article in the US print edition of the Financial Times, August 14, 2014: Comment: America’s view of China is fogged by liberal ideas
After reading Christopher Layne’s piece I assume I must be a liberal. He argues that Amercia’s view of a resurgent China is not unlike how Britain viewed Germany before the Great War. Apparently Britan viewed Germany as “militarist, autocratic, mercantilist, and statist”. Yes, I agree with that, for 1914. It seems Layne thinks the US sees China in the same way. He closes with a chord from the Book of Appeasement, “If the US wants to avoid a future conflict with China, it cannot allow liberal ideology to obstruct a reconciliation with an ever more powerful China.” Read ‘appeasement’ for reconciliation.
He even writes, “The spiral of animosity that threatens to culminate In a confrontation between the two countries is in large part a creation of American Policy.” Say again? So China has no plans to dominate those around it? Did I just wake up or something?
I have never read anything so out of date and so dangerous. No one seeks conflict, but it is the fact that such a thing is always possible that helps in the art of negotiation. Call it what you will, but let’s keep the political speak out of it.
See my recent blog on that other must-be-named liberal, Niall Ferguson, in Where are all the Real Men (among our political elite)?
Category: China Financial Times Tags: