Why do good companies make bad decisions?

 

There’s no single reason. Decision makers may act on poor or inadequate information, they may be unaware of changes in their industry, or they may underestimate these changes. That’s where business intelligence (BI) – the strategic analysis of competitive issues facing companies in their markets – can make all the difference, said Paul Kenny, Chief Financial Officer for McManis & Monsalve Associates.  Kenny will speak to the merits of business intelligence at this year’s Global Intelligence Forum, organized by the Mercyhurst College for Intelligence Studies, July 11-13 in Dungarvan, IRE.

 

“In business, a key function of intelligence analysis is risk management,” Kenny said. “When you can tell decision makers how to mitigate their risk – which is the worry that keeps them up at night – that is huge.”

 

In an increasingly globalized world, large and small organizations require intelligence analysis on a regular basis because they simply can’t plan or react fast enough without it, he added.

 

Kenny, who has domestic and international experience with companies such as Seagram Distillers and Coca-Cola, said business intelligence addresses a range of challenges. This includes marketing considerations such as what is your market penetration, what is your demographic; sales – what are your buying patterns, should you go into the mass merchandising environment; distribution – what are your fleet utilization plans and how do you intend to get your product to market in the most cost-effective manner; warehousing; packaging; human capital requirements, and so much more.

 

“Many companies have had the data for a long time, but haven’t known how to leverage its strategic value,” Kenny said. “In the past corporate analysts have provided plenty of information, but it’s the new use of intelligence frameworks that are enabling organizations to make more insightful and strategic decisions.”

 

An example is Coca-Cola, given its mature market it should have no issue staving off existing competitors. Instead, the organization must constantly be aware of new entrants varying from water bottlers, non-carbonated fruit juice producers and global companies wishing to expand into its market. Intelligence analysis is also useful for companies looking to expand into emerging markets such as Africa. Effective decisions in these markets require a great deal of nuanced considerations. These markets offer great potential but are often characterized by political instability, technological gaps,  and infrastructure issues and cultural barriers.

 

“There are huge risks and you need to have targeted intelligence to profitably enter and compete in these kinds of markets,” Kenny said.