Timo Elliott of the BI questions blog had a “prediction” about 2008 this month – 2008: From Business Automation to Business Optimization?. Timo makes some great points and I agree with his premise that past is about automating business processes and the future is going to be about optimizing the business, in part by ensuring the best use of information across the whole organization. However, I don’t think that combinations like SAP+Business Objects will be enough. The Enterprise Applications are still fundamentally too “dumb” and simply having more and better reporting on the data they store will not help much.
Timo points out that 9 out of 10 companies fail to execute their strategy. While alignment of individual goals with corporate ones and transparency are important barriers to strategic execution, the way we still build information systems is another. Companies cannot operate today without their information systems. As a result a strategic change can only be made to the behavior of the company if the behavior of its systems can likewise be changed. It is not enough that people have the information they need and can use it to make better decisions, the systems themselves must both make maximum use of information and be easy for executives and managers to control. After all, operational excellence takes more than actionable analytics, it takes actions.
What is needed then is systems that not only exploit the information resources of the company, but do so in a way that empowers executives. They must be able to see what is happening at a macro level and be able to make new plans based on it (Timo’s point) . They must also know that the systems that execute at the operational level are likewise using information to its fullest extent (routing good customers to good call center representatives; making compelling retention offers to at-risk, profitable customers when they are reviewing their bill online; micro-targeting the prospects the strategy identified). They must also be sure they can change these systems when they need to and not wait for the IT department to grind through its backlog and they must be able to see what kind of results specific changes might cause.
Building these kinds of systems requires a focus on the operational decisions within them and appropriate automation and management of these decisions – enterprise decision management, in other words. SAP or Oracle might one day be able to deliver these kinds of systems. Their expensive BI acquisitions, however, are not going to make it any easier.
