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A Business Necessity

  Executive Interview published in DM Review Magazine
March 2003 Issue
  By Jean Schauer

It is common knowledge that many products - software and otherwise - are designed without a clear understanding as to whether or not the product will ever be viable. The files at the U.S. Patent Office are testimony to that fact. While many software companies proclaim that their technology was developed to solve a business problem, Salient Corporation actually began as a project for a soft-drink bottler - and then developed into a software company.

Guy Amisano, founder and president of Salient Corporation, explains, "We started out as a project to solve a business problem - a problem which happens to be quite universal. Business is about measuring process and variables. Originally, we were trying to control the variability in our sales process, where our people would have to manage hundreds of products with overlapping promotional calendars against thousands of customers in different markets and channels. It was hard to tell how customers would price and present these promotions, how competition would react and how consumers would respond. All this wild variability could make profits very unpredictable. We were trying to understand how cycle-to-cycle changes in products, promotions and price points affected key business indicators of volume growth, revenue and margin."

"We realized that there is a direct connection between what people do every day and how they succeed, so our solution was always about understanding that connection between behavior and results. Our company's vision is driven by that central idea. We weren't so much interested in reporting data but in bringing all the facts, measures and relationships together directly at the point where somebody is transacting business, at the core of the decision-making process. That Darrell Welty, Salient's long-time technology chief, and his team could do this at all was amazing enough, but the results were even more amazing. We were able to increase our operating margins by 10 percent immediately - within three months of install. It was then that I realized that I had a new company on my hands. It became a commercial enterprise right there. Today, our technology has evolved into a complete enterprise management solution. We move knowledge in real time, converting disconnected 'silo' data into a roadmap for the right business decisions," explains Amisano.

"We have built an analytical system which I think is absolutely world-class. It's better than most analytical systems because it is aimed at people who are doing things rather than at straight analytical functions," states Amisano. "Data is useful when it can be related in a certain way to what occurred. I like to use the analogy of an athlete who runs 100 meters every day for 30 days. Providing this athlete with the total time spent completing those runs would be of no value in improving her technique. The athlete requires the time for each individual run in order to evaluate her progress."

Most readers of DM Review are familiar with quality guru W. Edwards Deming's Fourteen Points of Quality and their ramifications on information quality because columnist Larry English regularly references Deming's work. Amisano readily admits Deming's influence. "We believe Deming's continuous improvement ideas can be applied to many high- volume commercial affairs. Thousands of times, events are happening in many, many places. Each one creates a separate set of values. If you measure those things - and measure them appropriately - and then deliver the meaning of that back to the sources of the behavior in the first place and build in some reward for productivity, you can expect the behavior to improve. It was Deming who educated organizations on the value of distributing the knowledge - putting the knowledge where it counts. When we were trying to solve the problem that led to the founding of this company, we recognized that we had to develop a system that would let average people who go to work every day draw a terrific historical understanding of what they were doing as they were doing it. Our system shares a greater lineage with these kinds of ideas than those behind the 'report-oriented' OLAP world," says Amisano.

To explain what differentiates Salient's approach from OLAP, Amisano continues, "OLAP is useful, but we personalize it. We see our job primarily as improving individual productivity rather than analyzing it, so we work hard to make data more accessible to low-level managers and C-level executives as well as analysts and data wonks. OLAP systems are intended to deliver reports online; but, more often than not, the person who actually gets the report isn't the one who has to use the data. We're more interested in getting the information back to the business manager directly, so there's a super emphasis on simplicity, graphics and speed. Another basic difference is that we don't pre- summarize or pre- calculate anything. Again, this has to do with our target user. Our system works by free association instead of hierarchy. Each user can 'assemble' the facts that fit the situation at hand without having to think about procedure. As a matter of engineering philosophy, we think intelligence software fails when the user has to think about the program or wait for the answer."

Armed with the analysis provided by Salient products, organizations are able to make effective decisions that impact the bottom line. States Amisano, "Our business is enabling each person to understand the impact he or she is having on the company's mission. That's why we're here. I like to say there's a better way to run a railroad, and it has to do with individual people measuring themselves. The best way to help people do things better is to consistently and continuously tell them how well they are doing - in a way that's relevant to what they do and in time to make a difference. We accomplish that by collecting measures of the quality of activity at every level throughout the organization. We get those measures specifically. For example, what does Charlie, the third-shift warehouse manager, do and how do you know if he's doing it well for you? What are the measures that enable him to know how well he's doing? Is it how many pounds of material he puts on a truck per person hour? Whatever it is, there is a measure there, and we extract that measure and build that into a system that mirrors the universe of the person who is doing the work. It is very precise. Most people who use our products see us as an analytical system because the technology we deliver is so thorough. It is thorough because it has to be - because we have to begin at the very bottom where small things occur and then build it up so that it embodies and contains the entire organization."

"Using our system to manage a company is like putting a Swiss watch under a scope," Amisano says. "You can look at the time of day - a real-time activity P&L;, in Salient's parlance - or focus on the inner workings and movements of any one the gears. I think we are the only outfit that can take all of the data from a large company and put it all together in a P&L; view that's drillable in five seconds down to the person, place and day," he adds proudly.

Guy Amisano, founder and president of Salient Corporation
Guy Amisano, founder and president of Salient Corporation.

The current global economic climate has forced organizations to fine-tune their operations in order to remain viable. This represents a huge opportunity for Salient. As these organizations seek to understand all of the nuances of their business processes, Salient stands ready to assist. "Today," says Amisano, "people are concerned about how they make money, and they're thus more concerned about improving their processes to make more money. There are a tremendous number of opportunities to make money by identifying these really tight measures and driving them down to the street. A large retailer, for example, could maximize return by putting precise intelligence directly in the hands of their store managers. Consider the local manager at a store with 50,000 products. With access to her own hourly scan data, integrated with product cost, headcount, shelf set and promotional space data, she could, over time, optimize product space allocation according to margin per facing or per square foot, optimize labor costs to match store traffic flow by day-part, move prices on slow- moving merchandise, or even find those check-out clerks who attract and/or serve the greatest number of customers. And, of course, this kind of precision works its way all the way up the organization. Chain buyers, armed with store- by-store, venue-by-venue and day-to-day measures of cost and profit performance by product SKU can extract maximum efficiency from day-to-day and promotional purchases. When you start at the bottom, organizing the most elementary data from operations and activities, the possibilities are endless. That's what we provide."

Headquartered in Horseheads, New York, Salient was founded in 1986 and now has more than 15,000 users in 47 countries. The company's Margin Minder product is a trade and promotion management system that organizes all of an organization's vital statistics in a super-fast information system. That information system provides a clear understanding of events that are occurring and enables timely response to situations that arise. Service Minder has been developed for companies that manage a complex world of tight schedules, widely dispersed technicians with varying skill levels, assets of many different kinds, and fixed and rolling warehouses of parts. Vending professionals turn to the Vend Minder asset management system to carefully balance costs and revenues across a wide mix of customers, assets of varying capacity and reliability, suppliers, people, products, delivery routes, machine movements and more. Category Minder is Salient's category management system for retailers, enabling them to anticipate constantly changing market trends and manage a complex mix of products. The Salient UXT Enterprise Activity Management System draws data from existing systems, capturing and organizing all of the details from invoices, work orders, accounting systems or any other data source into a multidimensional, multiprocess data management system.

Never one to be content with the status quo, Amisano shares his plans for the company's future direction. "We know that the world is about volume, and it is our engineering mandate to handle more and more data volume faster and faster while making it easier for our users. At the very beginning, we were able to see the effect of the insight gained through our software 'project.' Now, each time we achieve certain things with the technology, it pushes us to the next level. Last year we gained the capability to handle 'non-transactional' data, which lets us measure the effects of conditions - such as weather, population, space, etc. - on transactions. This is really important when it comes to measuring true productivity. Lately, we've moved up another magnitude in scalability, well into the billions of transactions. These two advances turn our technology into a true enterprise-level management system. We can give a brand new manager a clear picture of the true net value of one customer and, at the same time, show the chief executive the state of the enterprise as of last night. Our grounding in business operations helped us put high-level analytics into the mainstream, but we're always working on ways to make it easier. We think it's really important to keep the computer out of the way of the information."

Salient Corporation Fact Table

Year Founded: 1986
Privately Held

The Multidimensional Aspects of Guy Amisano

Last Book Read: The Road to Serfdom
by Friedrich A. Hayek
Most Memorable Movie: Henry V
Favorite Entertainer: Louis Armstrong
Most Entertaining Game: Tennis
Dream Car: Jaguar XJ 220
Perfect Vacation Spot: Tahiti
Most Admired Individual: Mother Teresa
Favorite TV Show: The Simpsons
Favorite Sports Team: Teams of New York
Hobby: Guitar
Favorite Type of Music: Jazz/Blues
Favorite Food: Sunday Sauce (for pasta)
Favorite Beverage: Glenfiddich

As Salient Corporation grows and expands its reach across several vertical industries, Amisano explains the value proposition for potential customers. He says, "It's about keeping score and giving the people who produce the means to produce more. What's the most fun for us is watching how people are astounded when our products enable them to see things they could never see before. Here at Salient, our mission is all about enabling our customers to use the information they collect every day to drive productivity. Any process can be improved. That's a religion around here. When companies measure day to day, event to event, and take it seriously, they become much more secure because they know what's happening, what can be done and who can do it. That's why so many say they can't live without us," Amisano concludes. To acquire the understanding that enables improvement, Salient is a truly a business necessity.


For more information on related topics visit the following related portals...
Business Performance Management and Metrics/KPI/BSC.

Jean Schauer is editor in chief of DM Review magazine. She can be contacted at jean.schauer@thomsonmedia.com.

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