This article originally appeared in Profit-Driven, a blog for startups and small businesses by Profitably.

For most of us in the accounting profession, Excel spreadsheets are tried and true tools of the trade. And that’s absolutely fine. They’re what we know. They’re comfortable. And for the most part, they get the job done.

But if we look at other corners of the company, we’ll see something changing. We’ll see that Web-based tools are not only transforming the way business gets done, but also taking it to the next level. Look at what Salesforce has done for the sales team. Web-based tools like HubSpot, Postling and HootSuite are changing the way the marketing team manages social media campaigns and drive inbound traffic. IT has helpful tools like Zendesk for support and droves of project management tools. HR pros have recruiting management tools like TheApplicants and Resumator. The list goes on.

Until recently, finance/accounting was missing out, destined to keep trudging along with Excel and desktop accounting software. But now there’s a wave of exciting innovation happening in our neck of the woods (clearly we’re not biased!). And it’s happening for a big reason: we are the keepers of the numbers—and numbers matter most.

Below we’ve compiled a short crash course covering all you need to know about Web-based software for the accounting team, what some of the most interesting ones are, how they can help, and much more.

To start, people throw around buzzwords like “cloud-based” as if everyone knows what they mean. We’ve learned that that’s not always the case. So when we say things like Web-based or cloud-based when referring to software, we’re talking applications that aren’t sitting on your desktop (i.e. Excel). We’re talking about apps you access online, sometimes for free and sometimes for a monthly subscription fee.

The benefits of apps like these? Well, it depends on your specific use (which we’ll get into below), but here are a few general thoughts:

•    Anywhere Access: Who loves the experience of sending an Excel attachment back and forth, over and over? Changes getting lost. Versions conflicting. Formulas getting funky. We didn’t think so. Web-based apps let anyone with permission access a project from anywhere. No more attachments. No more delays. Always up to date.
•    Ease of Use: Traditional accounting software has a reputation for being difficult to use and supremely unintuitive. Among those of us developing Web-based accounting apps, design and user experience are our guiding light. Why shouldn’t accounting apps elicit satisfaction and delight? Why shouldn’t data analysis churn out insights and reports that are not only readable but communicable in the monthly board meeting during which everyone dreads having to slog through financials?
•    Targeted use cases: You might not want to leave QuickBooks behind after all these years (you’re not alone), but you don’t need to jump into Web-based software both-feet-in. Most solutions these days offer very specific functionality like planning, inventory management, expense reporting and shipping. So you can keep QuickBooks where it is and try out a solution that will tackle one problem for you or your clients.
•    Interactivity: When you make a change in Excel it sits in Excel and that’s it. But the Web-based tools we’re talking about interact with QuickBooks or other accounting suites. So when you change something in one place, the data is reflected everywhere else. “One source of truth,” and “don’t repeat yourself” are the names of the game.

So what’s out there?

Here are a couple of the key categories we’re seeing emerge, as well as some of the top players in the marketplace today for each.

Accounting Software

There are lots of accountants who are comfortable with QuickBooks on the desktop and don’t want to see that go away. Conversely, there are others who find it pretty clunky and difficult, and they are looking for something Web-based and easier to work with. It’s that second group that is using tools like…

•    Xero: One of the strongest Web-based accounting tools for small businesses comes from—of all places—New Zealand. They have a tremendous footprint in the U.K., South Africa, Australia and N.Z., and have recently entered the U.S. market. Their solution is stable and feature-rich. You will be hearing more from these guys to be sure. ($19-39 per month)
•    NetSuite: They are the absolute No. 1 in terms of market share for Web-based ERP solutions, but they are a bit “upmarket” (read: expensive) of most small businesses. (pricing proprietary)
•    Outright: A classic venture-backed startup, sort of the mint.com for small businesses ($9.95 per month)
•    Indinero: Another venture-backed startup in the space, definitely worth checking out ($0-49 per month)

Planning and Analytics

Here’s your real opportunity to put Excel to bed (at least for some tasks…). These apps help put a plan in place and measure plan versus actual performance. Some provide easy to use reporting on existing accounting data that you and your clients can access easily from any computer.

•    Profitably*: Cutting-edge planning software that connects to QuickBooks for plan vs. actual. Our advanced analytics provide insights into cash-flow planning, customer profitability, and employee analytics. (“Planning” is free, and the advanced analytics are $49.99 per month).
•    60mo: Planning software with direct connectivity to source bank data. Rich feature set and beautiful visual design. ($29-49 per month)
•    Coreltyics: Dashboard software that plugs straight into QuickBooks and compares to industry benchmarks. ($29-59 per month)
•    Qlikview: Perhaps in a slightly different category, Qlikview is a fantastic Web-based Business Intelligence tool that many small businesses are quickly embracing. (pricing proprietary)

Billing and Invoicing

Gone are the days of manually e-mailing clients for money or writing out checks by hand. That would be like manually entering transactions from bank statements. Now it’s possible to automate these processes, not only to save a TON of time, but also to reduce the incidence of errors.

•    FreshBooks: The undisputed king of invoicing. If you or your clients submit invoices to get paid, FreshBooks is a lifesaver and a well-established company in the space (starting at $19.95 per month)
•    Bill.com: Bill.com does both bill payment (AP) and invoicing (AR) and features a well-known accountant program. ($24-29 per month)

Other apps

There are so many solutions in the marketplace, it’s impossible to put together a short list. There are industry-specific solutions and solutions that solve very specific challenges. Here are a couple examples:

•    Expensify: They claim to make expense reports that “don’t suck.” If you or your clients are tired of manually collecting expense receipts and wading through approvals, check them out. ($5 per month per submitter)
•    BeneShip: They work with Pitney Bowes and other logistics providers to leverage spend and bring killer deals to companies that ship. Oh, and they connect to QuickBooks, making the process dead simple. (now in beta—get in there for free while you can!)
•    AuditMyBooks: They pull your QuickBooks or QuickBooks online data automatically and scan for a broad range of audit flags. Every month, automatically. Need I say more? ($99 per year)

Clearly, there’s a lot going on out there. It can seem downright overwhelming in terms of how fast everything is moving forward. So as you dip your toe into Web-based finance/accounting apps, keep in mind the problems you want to solve, the objectives you are seeking to accomplish, and start by solving those. You don’t have to dump your existing processes to get started, either.

And one more thing. The CEOs of these companies are dying to help you get where you want to go. They’re in this for a reason, and you’re it. So if you’re not sure if it makes sense for you to use their tools or someone else’s, give them a ring. You might be surprised by how candid they will be. I should know—I am one of them!

Adam Neary is the CEO of Profitably (see *), a web app that helps small business owners plan, measure, and execute on what matters: their business. For more information, visit Profitably.com. And to ask Adam anything, email him at adam.neary@profitably.com.

I am really pleased to have lost 20 pounds over the past few months, and I look and feel a lot better than when I was trudging along at 240, but at 220 I am still a far cry from my svelte 190 from my rowing days at Oxford. Check out this skinny Adam Neary from many years ago, traversing the old rock wall:

Fact is, I may never see 190 again, but I think 215 or 210, maybe even 200 if I really push, would be fantastic. In fact, somewhere around 240 I told myself that it would be AMAZING to see a “1″ as the left-most number on the scale again if I hit 199.

Before you object, let me say that I realize weight is just a number, and there are a TON of other factors in health. I know this, and so I thought I would lay out how I am approaching fitness given my busy schedule (newborn baby at home and CEO of a technology startup).

Preview:
It all comes down to:

• Nutrition
• Endurance
• Speed
• Strength
• Flexibility/Balance…and inward calm

Nutrition

Let’s not kid one another. If I am going to lose weight, it’s mostly going to be about calories in more than calories out. The problem is that 90% of the time, I am eating about as healthily as a human can. It’s the 10% of the time that we need to worry about, but in any case here’s what ‘good’ looks like:

Lean body mass:
– 220 pounds * (1-24% body fat) = ~167 pounds lean body mass

Protein
– 4 calories per gram
– Eat 1 gram per lb of lean body mass
– 167g protein daily

Carbs
– 4 calories per gram
– Eat 1 gram per lb of lean body mass
– 167g carbs daily

Fat
– 9 calories per gram
– Eat 1/4g – 1/3g per lb of lean body mass
– 42-56g fat daily

Scaling
The above leads to 1,786s calorie per day. For now, I am at 2,400 calories per day (realistically) of input, so on a given day, either we take in some alcohol (at 9 calories per gram) or a bit more food, but if food, we should try to keep protein/carbs/fat proportions.

At scale, this works out to:

• 72g fat daily
• 224g carbs and protein daily
• As little refined sugar as possible
• As little alcohol as possible
• At least 25g fiber daily
• Less than 2,000mg sodium daily
• Less than 250mg cholesterol daily

The truth (finally)
The truth is that none of the above really matters, though it has provided a great guide as I have gone through periodic bouts with logging the food to gauge macronutrient balance. But no, what matters is that 90% of the time I stick to this sort of diet, and then 10% of the time I binge eat/drink. I just love to eat a ton of food. After a long, frustrating day, it’s possible for me to eat an entire large pepperoni pizza, an order of buffalo wings, a couple manhattans, and a 6 pack of beer. I love food and I love feeling full.

So while I would love to watch each and every calorie go down meal by meal, that’s really not going to matter. For me, it’s all about the frequency and severity of binge eating, as well as whether I am eating late at night. So that’s what I am actually tracking, and the rest of this is nutrition section is sort of kabuki to some degree. I know how important it is, I know how I am doing, and the rest–like everything in life–is execution.

Endurance: Cycling for low heart rate, long duration

Cycling is a recent obsession of mine. It’s world’s better than running, which I find miserable to do for more than 2 hours at a heart rate of 150 or more. When I cycle to work on the ferry and take the GW bridge home to Hoboken, I have a round trip of just over 26 miles (a marathon if on foot…), and it’s a lot more fun.

But more importantly, the sustained cycling tours on the weekends mean low heart rates (145-155) for 4+ hours, and that’s great for weight loss that day and weight loss the rest of the week, since it aids metabolism as well.

The goal: The marathon of cycling is the Century, a 100-mile cycle. I figure a good time goal for my first Century is 8 hours, which works out to an average cruising speed of just 12.5 mph. My usual weekend ride is 38 miles, so I’ve got some work to do, but that’s what goals are about. Oh, and there’s a beautiful 100 mile loop coursing along both sides of the Hudson if you cross the river up by Bear Mountain State Park. Can’t wait to chew through it.

Speed: Running for high heart rate, short duration

On the other end of the spectrum, I would love to always be able to run off 4 miles in 30 minutes. At various points in my life, this was achievable, and I don’t have any aspirations of pushing that farther. Keeping an 8mph clip for 4 miles is just good health, and though I despise running, there’s no other activity that keeps the heart rate up in the 180+ range for 30 minutes.

I mean, the reality is, Adam Neary is built for comfort, not built for speed. I am built to knock things over, and so speeds at which actual runners would scoff still pose a decent challenge for me. When I was younger, it was no thing, but here we are!

The goal: 4 miles in 30 minutes
I haven’t been running, and today I ran 4 miles in 34:50. I don’t have a ton of ground to regain, but I definitely need to tighten up the running and how speeds over 7mph drive up my heart rate.

Strength: Weight training for high exertion circuit training intervals

I have loved a hard workout in the gym since my football days many (many, many…) years ago. I have gone through a broad range of weight-lifting styles and approaches, but I fell in love with the 300 workout, inspired by (and rumored to be an integral part of) the movie 300 with those strapping Spartans. The workout is a circuit training series involving–what else–300 reps:

• 25 pull-ups
• 50 dead lifts at 135 lb
• 50 push-ups
• 50 box jumps at 24″
• 50 floor wipers at 135 lb (total nightmare)
• 50 dumbbell clean and press at 36 lb
• 25 more pull-ups

Oh yeah, and I time it. To get the maximum workout output, I do these in heart rate internals. Basically, I push as hard as possible until my heart rate reaches 185, then I rest and stretch until it drop to 135, then I push until I get it back up to 185. I go through perhaps 12 of these cycles in the ~45 minutes it takes to get through the routine.

Right now, given my weight, the only thing I just can’t do on its own is the pull-up set. I do weight-assisted pull-ups on a machine until I can eventually get there, but I have a LONG way to go. Here is a video of the “floor wipers” I am talking about above. As I said, total nightmare.

The goal: Complete the 300 workout at full weight and no assistance…in 40 minutes.

Flexibility/Balance…and inward calm: Bikram Yoga for extreme heat, breathing control, heart rate control in 26 poses over 90 minutes

I love yoga, and if I had to limit my workout to one of the 4 above, I would probably choose yoga. I have a very intense, numbers-oriented approach to damned near everything. I have a constantly cycling inner dialog whether I am working out, working at the office, or sitting at dinner. I am…not a calm person.

But yoga is a 90-minute meditation, and it does not allow for numbers. There are no clocks, no heart rate monitors, no anything. And Adam Neary is built for knocking things over (see above), not for standing on one foot holding my other foot over my head as I lean forward…for 90 minutes…in 110 degree heat! I actually find the meditation profoundly calming, and even though I force out all active thoughts about work and home, I find a ton of clarity after these sessions.

On the physical health side, it’s just ungodly hot and difficult, and it literally took 3-4 years of yoga before I could make it through the entire session without sitting down and resting. I had to get acclimated to the heat and used to the rhythm of the process. There’s breathing to practice, and there’s the poses themselves. When you can’t breathe and you get light-headed, you sit down…sometimes you lie down. Even if you’re standing up, sometimes you have to wait out a poses or two to catch your breath.

The goal: The goal has always been to make it through an entire class without missing a pose. Good luck.

Outcomes

The biggest areas I am going to need to work on to achieve these goals is to cut down on the binge eating, work on the pull-ups, and build endurance on the cycle. If I can get those happening, I think the rest will fall into place, and clearly these all relate to both weight goals and execution against goals on the fitness side.

If I do succeed, here’s what it looks like:

Body weight
I have gotten down from 240 to 220. Now the immediate term goal is 215 (before the holidays!). Then it’s 210, 205, and finally 200 (ok, actually 199!). I don’t know if I will ever see a “1″ in the left-most digit on the scale again, particularly given my love of food and beverage, but we shall see! Maybe I will put timelines in place once we get to 215 and get through the holidays.

Body fat percentage
I am currently at 24-25% body fat, down from north of 30% (!). For me, 17% would be a killer goal. I have regressed the relationship between weight and body fat for me given my lean body mass, and it looks like this:

• 215 lb => 22.72% body fat
• 210 lb => 20.89% body fat
• 205 lb => 19.06% body fat
• 200 lb => 17.22% body fat
• 199 lb => 16.86% body fat

So ultimately, it would be great to see 17% body and see 199 pounds. From what I can see, these two things seem to go together. And both of them are damned near unreachable!

In the meantime, I am going to keep at the fitness, which always feels a lot more achievable than weight loss for me, though clearly they go hand in hand. In the meantime, any thoughts from you guys? Things I should be thinking about?

This article originally appeared in Profit-Driven, a blog for startups and small businesses by Profitably.

How many of you plan your business with an Excel spreadsheet? It’s OK. This is a safe place. No one’s going to judge. Truth be told, I’m actually a huge fan of Excel. I used it to plan my wedding, to track weight loss, and of course I lived and breathed Excel during my consulting years. But as a business management platform, Excel can be a real nightmare.

Yet so many folks are using it to do just that.
So I suppose if saving time, saving money, and being able to act with confidence matters to you, then you owe it to yourself and your business to have an Excel intervention and see how you can spend your time focusing on the things that really matter like, say, running your business.

But first, let’s look at a few reasons why it’s bedtime for Excel.

Your business is dynamic, and Excel is static

Among larger companies, gone are the days of the formal annual budgeting process. More and more, businesses are adopting a rolling forecast that flexes to the constantly shifting marketplace. These same large companies are swiftly shedding the giant, clunky planning tools of the ‘90s in favor of agile, web-based tools such as Adaptive Planning or Anaplan.

But for small businesses, these names typically mean very little. That’s because the planning is happening in Excel. Based on our research, a whopping 93 percent of small businesses—including those using QuickBooks as their accounting software—are planning and managing their business with a spreadsheet.

The problem, in case we haven’t noticed, is that nothing is static anymore.
Manually keying historical data into Excel is a drag, and manually plying through QuickBooks to understand where you were off target and why the numbers don’t add up is time lost that could be spent thinking about your products and services or your customers. Your business is constantly generating new information, and Excel just sits idly by, waiting for you to fill it up. Then, it provides no “so what” or sense of what’s next.

Even your business model is dynamic

Not only is your data dynamic, but your business model is too. Let’s say you read an interesting article about the emergence of Content Marketing as a fantastic channel for driving new customers your way. You are thinking about dipping your toe in with exciting new tools like Contently or Kapost to help facilitate amazing new content, to facilitate amazing new traffic, to facilitate amazing new business… you get the idea. To fit that strategy into Excel, you’re adding a row here, inserting 10 there, filling down formulas, checking the results. Pretty soon, you realize that you’re spending more time building your business model when you should be building your business.

Because the very nature of your business is unique, and because it evolves, you need tools that are flexible enough to allow you to model out a new channel, or perhaps a new customer segment you’re thinking about going after. You should be able to test out a change in pricing and see the impact to your bottom line instantly. Excel can do that, sure. But it takes so much time to grind it out that most business owners end up following gut instinct rather than owning the numbers. And that’s a missed opportunity.

Everyone else has a web app…

Seems like a silly thing to say, right? But it’s true. The VP of Sales has Salesforce.com. The CMO has Hubspot. Your customer service team has Zendesk. It seems like every area of the business has the aid of smart, fast, cloud-based tools that turn a “one person team” into a one person army.

But what does the CEO/CFO have? What does the capable business manager have for planning, measuring, and executing on the business? They go to war with accounting software from the ‘90s and a spreadsheet from earlier than that.  It just doesn’t make sense.

But those times are changing as a wave of young startups build sets of tools for the business manager that finally de-throne Excel as the go-to place to plan your business. And it’s a wave worth paying attention to.

I’m not saying you have to un-install Excel. (To many, it’s a comfort thing.) But just know that if you want to get back to building an amazing business instead of amazing spreadsheets, Excel’s days are numbered.

Hi everyone. I realized a week or so ago as we tightened the screws on some revisions to profitably.com that adamrneary.com had grown quite stale. In fact, we were still leading off with “Confessions of a Startup CEO” even though we had stopped making those videos many months ago.

The reason for the shift, as you can quite imagine, was that we have been producing a ton of content over at profitably.com, and I didn’t want to be building my personal brand when we could all be building Profitably’s. Now we have covered a ton of ground on that front, and it’s my site is holding back the magic.

In jazz and web design I endorse stealing liberally from people smarter and more artistic than we, particularly if you site them. So I thought I would call out a couple places from which some good ideas.

David Cancel has a great blog over at http://davidcancel.com and I think he does a killer job of striking the balance between his personal voice and the voice of Performable, which is probably a good reason why Performable is now a great part of HubSpot. Good for him, and thanks, David, for all the good advice.

Anil Dash has been blogging for more than 10 years at http://dashes.com/anil. What struck me the instant I saw his site was its brilliant simplicity. If you google “simple elegant wordpress theme” you’ll get (circa August 2011) droves on flashy themes with high-res images and “elegant” image sliders. They look like splash sites for a new BMW coming out, and while that’s great for cars and recording artists’ new albums, what I wanted out of simple, elegant, and clean I found with Anil’s site.

I borrowed liberally from Anil’s layout, style, and typography, including the 1-column framework, the simple navigation, the concept behind his About page, and many other moments of clean and elegant design. If Anil Dash is any indication, it’s that 10 years of blogging teaches you what’s important, and to leave the rest behind.

Kristarella is major contributor to the community behind the Thesis theme, which I found to be just about the best simple theme for implementing the ideas I had. While I didn’t borrow a tremendous amount of stylistic influence from her site at http://www.kristarella.com/ I did learn a ton about getting my own ideas done quickly, and her contributions to the knowledge base at http://diythemes.com/thesis were fantastic. This is pretty basic stuff for many of my readers, but it gave me a crash course in CSS and Thesis that made the redesign a short weekend project and not a monster.

Matt Dunn over at http://matthewlyle.com/ reminded me how much I love a good red. It’s that simple. Blue is my favorite color, but as Jack White will tell you, when it’s time to use red, nothing else will do. Red, White, and Black are a powerful set. Thanks, Matt!

I know it’s a throwaway for most of you, but I fell in love with rampant use of short codes while reading the Rails Guides (http://guides.rubyonrails.org/getting_started.html). Long stretches of text become instantly more digestible when you’re able to block them off in helpful ways, and these guides are great at that. My posts are conspicuously short of these, but not for long…

Another great find that came out of perusing Anil Dash’s site was my discovery of Readability. I think they have the recipe down, though I am not in love with the emphasis on the Kindle, since I am a shameless and unapologetic iPad fan. Nonetheless, it’s clear that the crew at Readability is keen on getting the metadata behind posts correct so that a broad range of devices and reading mediums can consume your content. The guidelines at http://www.readability.com/publishers/guidelines/#view-exampleGuidelines are currently being integrated into posts at adamrneary.com and profitably.com alike.

Mark Suster over at http://www.bothsidesofthetable.com/ is another Thesis user, and while pulling together my site, I spent a decent amount of time taking some crib notes from him on how to fill the site out with a smart selection of widgets and useful information. Naturally, his two-column format allows for much readier access to his intro paragraph, social media signups, and other subscription information. It’s not too dissimilar from David Cancel’s. I am torn, because I like my new 1-column view, but you may see me biting the bullet on that shortly.

Zach Klein, who is himself a well-known designer, has an understandably more avant garde splash page at http://zachklein.com/. In a quick way, he points very casually to his other web properties in a way that’s more personal than a string of social media icons. I ended up using both on my About page, but Zach’s approach is a great reminder to be yourself.

Finally, Chris Dixon does a killer job of putting together a more curated catalog of best posts. He has them arranged by category in a digestible way, and I think this is useful to new readers who want to jump into his world view but wouldn’t otherwise know where to start. If you’re perusing TechCrunch, you just want to see the latest. But if you’re just discovering http://cdixon.org/ you probably want to get up to speed on the areas most relevant for you straight away, and Chris gives you a great way to do that.

Thanks, everyone, for the great inspiration!

One of the most destructive attitudes in the modern workplace is the “yeah, yeah yeah.”  Have you heard it?  The research guys put some numbers together, and marketing puts some numbers together, and manufacturing put some numbers together.  Everyone comes together, preaches their numbers, and says, “yeah, yeah, yeah” to the other guys in the room.  I find this behavior as commonplace as I find it disrespectful and passive aggressive.

Net result, each participant leaves the meeting with the intention of using his/her own numbers, and management lets it happen in an effort to pick other battles.  Particularly in the case of forecasts: we know the forecasts are a shot in the dark anyway, right?

The first crack in the dam

This attitude–in my opinion–is the first crack in the dam.  When marketing doesn’t make their numbers, the first objection is that the numbers weren’t agreed in the first place, or that manufacturing couldn’t ramp up fast enough or that HR lagged on hiring.  Or worse (and I have seen this), marketing DOES make their numbers, but manufacturing didn’t buy them in the first place, didn’t ramp up their operations, and they are stuck defending—sometimes effectively—that they didn’t buy someone else’s numbers.  Ask them if they challenged those numbers and insisted on alignment.

You see, lack of unity in numbers and definitions render the debate dead on arrival.  What you need is be able to look at your planned versus actual in a sober, dispassionate way and not provide excuses for responsible parties to wiggle out.

A unified forecast

The good news is that BI has gotten dead easy, provided you take what programmers call an “object-oriented” approach.  It is the simple-sounding but terribly-difficult task of defining EXACTLY what you mean by terms thrown around so casually, such as “utilization” or “yield.”  First you define these objects with no equivocations in your BI landscape, then you insist that most of your metrics are calculated.  If yield is “food weight ready to cook / food weight purchased” then you should only need those two measures and not a third in your system.  You would be surprised how often a metric that should be calculated is loaded as a separate bit of information, and how rarely the resulting numbers tie out.

Collaborate, then lock it down

There should be no tolerance for dissent once a forecast is agreed.  That is because if your forecast is constantly shifting, you have nothing to measure against.  If you’re saying that you’re more agile then that, I would argue that the forecast period for your decision-making should be coordinated with the lead times for those decisions (another post to follow).  To wit, if you need a 6-month window to significantly change the size of departments, don’t adjust forecasts every two weeks, right?

By locking the forecast down, you encourage your team to debate the forecast and really come to an agreement during that process.  It isn’t always civil, but once you take the time to unify that forecast, you can manage with everyone on the same page, and next period you get smarter.  Isn’t that the point?

I am quoting Chris from http://www.thefoldblog.com/ because he reminded me of something today that I think is really important.  When it comes to analytics, “you don’t get too many tries to get it right.”  His blog post about Obama’s recovery.org drew a bit of a knee-jerk defense from me (can’t help it), but ultimately I think Chris has it right.

To bring you up to speed on the debate, ABC ran a story yesterday about the number of errors on recovery.org, a website put in place by the Obama administration to provide transparency into stimulus spending.  The article cites examples of congressional districts that don’t exist, due in large part to self-reported data points and recipients who don’t know their district.

The article drew out all sorts of hellfire from conservatives, as you would expect, claiming that the site was bogus if not maliciously bent on deceit.

While my first instincts were to defend and explain, Chris has reminded me of every other analytics-oriented project.  People get fired up about this stuff because it is important.  Analytics can lead to government spending, but in the private sector it can also lead to bonuses, lay-offs, promotions, and plant closures, to name a few.  People are understandably vested in the outcomes.

So when you put a BI solution in place, or when you’re about to release a “study,” you should bear this in mind, because in analytics you don’t get too many tries to get it right.

The details

In the case of recovery.org, in the administration’s haste, they seem to have never put any stops in place should any respondent enter an invalid district (how easy a lookup is that, and wouldn’t that have saved a headache?!).  More, they could possibly have looked the district up by zip code and saved false positives.

Now there is a natural question around what other sorts of checks should have been in place but were not.  Is there a data analyst in the trenches looking at the $/job figures to identify outliers and push back on the survey respondents for more accurate numbers?  Has someone looked at top-down and bottom-up to make sure these numbers are sound?  That’s something about which the end user doesn’t have any visibility, but now it would seem not.

The point is, once you’ve lost legitimacy, you still might be able to win back your supporters, but you’ve given your detractors a lot of ammunition, and the undecided middle has reason to distance.  It has happened in industry untold times, and it seems to have hit hard in this case.  Great lesson, and thanks, Chris, for helping me get on the right side of this after all.

That’s it.  November 17, 2009, marks the day when I officially decided that I am bored with companies licking their wounds as pertains to this recession.  The Dow is back up in happytown, and while things aren’t rosy yet in the employment numbers, I really think that there are many consumers who will spend some money this holiday season if retail outlets let them.

Let them, you ask?  Sure!  During a recession, it is possible to find some fantastic deals, but it can also be an absolute nightmare to find the things you need when you need them.  There’s nothing more American than convenience, and my hope is that retailers get it together before holiday shoppers get their bruised credit cards out in a couple weeks.

To the image above, I have been trying to buy a popular book for 4 weeks now, and Amazon had a 4-week backlog.  Barnes and Noble?  Out of stock everywhere, and this is a popular book!

Now, behind the curtain, we know that retailers have inventory models they use to manage reorders.  Some of these models are sophisticated, and some of them (I know as a matter of fact because I have seen them) are not.  Your garden variety retailers are managing inventory based on a hunch and manual stock checks, some with an Excel file, some with Access databases, and some with cobbled-together web applications.  But one thing each of these models has in common is a stock-outs risk tolerance.  In brief, there is a trade-off between how much inventory you carry (which has a cost, of course!!) and how often your customer wants something you don’t have.

Naturally, this year has been marked with lower inventories and greater risk of stock-outs, but my beseech retailers to get off the bench.  Stock up, get ready. You don’t have to go overboard, but let’s turn those dials, baby.  The holidays are coming and those books aren’t selling themselves.

One of the central tenets of Shared Service programs is trying to consolidate operations for support functions into one central view.  It isn’t easy, it isn’t always fun, but if you’re going to manage across multiple business units or held companies effectively, you need to see everyone first.

The problem, everyone will tell you, is that the way they think about Legal is different than the way business unit (BU) A thinks about it.  And the way they allocate real estate costs is different than the way BU B does.  These sound at first like problems down in the weeds, but pretty soon you’re stuck in the weeds, and without a strategic approach to this problem, the “program” is lost because these problems are insurmountable where the rubber hits the road.

Organizational Visibility

Think of OrgVis as an extension of “If you can’t measure it, you can’t manage it.”  In this case, “If you can’t see it, you can’t manage it.”  How many people do you have in your organization, globally, and what are their fully-loaded costs?  Where, in a simple, consistent organizational hierarchy, do they fit?  This is a hell of a challenge, so let’s square our shoulders and get to it.

Week 1: Define the working hierarchy

Two seemingly contradictory truths MUST happen in week 1.

1. You absolutely must finalize a working hierarchy with all the key stakeholders aligned–and it does not change for the rest of the project.
2. You must communicate to those stakeholders and others that the tree you put together is temporary, just a working tree for the sake of the project, and that once the project is over, we can evaluate moving things around and expanding/collapsing branches.

Bottom line, you cannot spend the next 4 weeks debating what falls where or what level of detail is possible/desired.  You can spend the first week coming up with an organizational hierarchy for information’s sake.  Remember, organization visibility comes before organizational alignment, and it is critical that everyone knows you cannot do them both at the same time.

Week 1 also includes a dept/acct level data request.  Get everything in every system that helps you understand how many people fall into every department (or BU or cost center or whatever you call it), and what costs exist in each dept and financial account for the test period.

Week 2: Data validation

If you have 15 business units being consolidated, you need to spend an entire week validating that the data you got ties out.  Don’t map anything in week 2.  Just tie data extracts to control totals, and validate your numbers against top-line financial and human resources reports.  You could follow up and re-extract as required so that by the end of the week, you have a clear picture of who is where and what money was spent in which depts/accts.

I will say again, week 2 is not for mapping.  You want each individual unit’s consolidated, bottom-up detail to reflect that business unit’s paradigm.  By the end of the week, they should sign off that, yes, last year they had $243.5M in revenue, spent $192.2M, and they currently have 1,322 people.  Without this sign-off, you’re in trouble come week 3, but the good news is that this is their data, right?  So if it doesn’t tie out, the onus is on them, since you are not doing any interpretation.  Nail this down to sign-off, and you’re ready for week 3.

Week 3: Mapping

Generally, mapping can be done from 1 dept to 1 branch on your tree, but sometimes the mapping must be jointly performed from dept and acct to your tree.  Good to figure this out early, and generally I don’t mind mapping jointly if the added accuracy  garners more stakeholder buy-in.  There is always a complexity trade-off, however, so tread that based on your circumstances.

So you start with a list of business units, departments, and accounts on the left hand and a consistent hierarchy tree on the right, and you map from the left to the right.  It can be done in Excel if the data is small enough.  It can be done in Access, or it can be done in SQL Server.  It depends upon the complexity and your internal capabilities.  You can also hire this out if you have no data analysts available to you (yet, anyway!).  End of the week, you can map every BU, Dept, and Acct to a location on your hierarchy.

Week 4: Roadshow

Yup, this is the tough part.  Book time well in advance to review the mapped data with each business unit, as well as with the Shared Services stakeholders.  Make sure everyone is on board, and don’t let anyone off the hook for vague objections like, “No, this is all wrong.”  If it is wrong, find out specifically why.  Have them come to you with people that are not in the right places and costs that need to be remapped.  Allow this process to be dispassionate.  Remember, their data is signed off, and the hierarchy is non-negotiable at the visibility stage.  The only thing that can shift is which nodes map to which nodes, and that is surprisingly easy when isolated cleanly like that.

Summary

Remember, when you start playing in people’s sandboxes, they get defensive, even when they stand to gain.  By following the above approach, you can limit the emotional objections and proceed with clean visibility as the goal.  If you don’t allow changes in the hierarchy during the visibility stage, and if you hold off any thoughts of realignment during this phase, you prevent the exercise from becoming a power play.  And that’s the ball game.

Once the visibility is in place, all stakeholders, from Shared Services to Lines-of-Business leadership, will be in a better position to discuss the organization using a consistent set of agreed-upon information.

This article originally appeared in Profit-Driven, a blog for startups and small businesses by Profitably.

So you’re a small business or a team within a larger business.  You have hiring responsibility for your team and some level of P&L responsibility.  You’ve heard for the past 5-10 years nothing but “data, data, data,” and “information overload,” and “competing with analytics,” but you don’t know where to start.

(Or, you know someone who is in the above situation and you forward this post to them so they can read it in the first person!)

To keep the blog post short, let’s keep to why, who, and how.

Why hire a data analyst?

Why would you hire a data analyst?  Because they have the power to make your life easier, your team smarter, and your business more effective by filling gaps in most information workers’ skillsets.  Data analysts are used to working in the trenches, resolving real information issues and getting you to the first horizon, the hallowed “One Version of the Truth.”  I cannot describe in words the power of everyone on the team working from the same set of assumptions, not just for historical “truths” but also for granular forecasts.

The right data analyst can then take you beyond the truths into predictive analytics, they can drive relationships out of messy data by eliminating noise.  They build better business cases, and they implement statistics actively to drive tangible business results.  If the “why” is still a question, comment below, and maybe we can tease out additional posts.

Who do I hire?

I am biased.  I think that your first hire should come out of a data shop within a well-respected consulting firm.  I cut my teeth at A.T. Kearney, and even though I am out of the game now, there are many who had similar training to me, and KPMG has a similar shop.  In fact, many consulting firms are running to catch up, and their high-flyers should all be in scope.  Find a Manager in the group, one who managed teams, managed projects, sold work, hired analysts, gave talks at schools.  These people are out there, and you can get them.

When you interview them, ask them to lay down a vision for how they would work with your team, which problems they would prioritize.  Tell them about your team and engage in a meaningful dialog.  You would be surprised how many leaders are out there, and you need one.

But make sure that the person with whom you are speaking has the soft side and hard side covered.  Probe to make sure the person does in fact understand the business impact of the projects on which they worked and is not just running numbers and analysis sake.

So then what (the How)?

Once you bring someone in, you have a simple deal to make.  You need them to demonstrate value in the immediate term by starting small and delivering something meaningful.  But your end of the bargain is executive support.  Your new data analyst will require your patience if business processes need changing.  You may need to tell one of your finance guys that they do in fact need to abandon an Excel-based forecasting system in favor of working with your new analyst to build the forecast assumptions into the new process that everyone can access.

It isn’t an easy transition to being a data-savvy organization, but your competition is trying, so you may as well get on it, and hopefully the brief advice above is a noble start.

I am having trouble explaining the magnitude for my excitement about the federal government’s massive entres into data transparency. In no time at all, Vivek Kundra has helped Obama and Co. rewrite the rules around the way the public sector looks at information and accountability.

Take www.usaspending.gov. For years, we consultants have worked with organizations public and private to address spending. “Strategic Sourcing,” as the phrase was coined by A.T. Kearney veterans, runs into the same barrier 9 times out of 10. Someone in purchasing has a bad contract, and the client is paying 50% more than they should be for staples or laptops or asphault for roads, but for one reason or another, they don’t want to shake that contract. In the public sector, the problem is 10x because public sector employees are not as directly incentivized by the bottom line. They are, however, motivated by public opinion.

So by posting all these contracts online, we get a chance to see that the “Cheyenne Mountain Complex/Integrated Tactical Warning /Attack Assessment,” a defense contract out to Lockheed Martin for $26.1M in 2009 spending (and it would be great to know the total contract value) has a contract variance of 167.84% and an average of 120 days late per milestone. I am not saying we don’t need this project, but I am pleased that it’s variance to plan is online and that as more citizens clue into these variances, those responsible for their delivery will no doubt tighten the reigns, when before they could proceed business-as-usual, the public none the wiser.

Add to this excitement my boundless energy for data.gov, a perhaps more ambitious project over which plenty of blog ink has been spilt. And better bloggers than I at that. The core of the concept, is taking what information is available and public…and making it available and public and accessible. What really matters to me is that there are massive implications for management consultants, data analysts, and the quantitative community at large who are paying attention. Entire business can and will be built around taking this now-accessible information, digesting it, and making it useful for businesses. Our President and our Federal CIO have taken the first step, and now it is our task to take the next.

What an exciting time it becomes as a result.