Value of Operational Intelligence

Tuesday, March 30, 2010 |

Traditionally, Business Intelligence (BI) has focused on looking at historical data and trying to understand patterns of behavior via a variety of approaches.  Organizations have spent untold billions implementing both vended and home-grown platforms to aggregate data, mine it, and provide some sort of reporting capabilities for decision support purposes.  These efforts have proven to be no different from other major initiatives - sometimes successful, most of the time less so.  Rather than focus on success/failure metrics, I want to focus on something more basic - are traditional approaches to business intelligence enough in today's environment?

Two factors stand out (there may be more) - information velocity and customer experience.  When it comes to information velocity, people are now bombarded with data.  Correlating that data into actionable information is becoming more challenging by the day.  This has a measurable impact on the business cycle, so time to market has become critical  - especially with response capabilities.  For instance, if a car manufacturer can't accurately gauge customer, competition, and regulatory response to a widespread issue - or even gauge what the issue is and how widespread it is, the results can be devastating to brand equity and even survival of the organization.

So a lot of organizations are coming to a realization that improving customer experience should be a key objective.  In quantifying this objective, customer experience metrics are in large part dependent on level of engagement - both positive and negative.  Organizations that look to the past to gain insight into this level of engagement are behind the eight ball - even if you find a correctable event (or worse, a series of events), the amount of time that transpired between the incident(s) and your ability to respond can reduce the effectiveness of your response.  And that is if the organization already has the right business capabilities in place to respond immediately.  Worst case scenario, these capabilities don't exist, and management decides to ignore or cover up these incidents because risk and cost of building the response capabilities outweighs the short term benefits.  With increased information velocity, both of these tactics are becoming untenable.

What this suggests is that events themselves have intrinsic value, since they can be thought of incident/response pairs for business capabilities.  Nor is this value binary - the event value gradient is bound by how quickly an organization can respond to it - similar to risk management. The longer the period between the event occurrence (or incident) and event response, the less value is realized (or more risk is taken on) by the organization.  Yet, the vast majority of data management and aggregation methods (even today) rely on T+n (where n is number of days, weeks, or months after event occurs when data is aggregated) approaches.  Clearly, this can become an insurmountable challenge to executive decision support, which begs a question - why are organizations still investing in these methods, when Operational Intelligence methods are both more effective and cheaper?

Decoding Business/IT Unity 2


Thanks again to the Business Ecology Initiative and BPM/SOA Consortium for giving me a collaborative platform to discuss this very important topic.  After a great discussion in response to the "Decoding Business/IT Unity" presentation, and I look forward to hearing how it sounds on the podcast.  Here are some of the more salient (and perhaps controversial) thoughts:

  • Expecting to address a major challenge with one tool is naive at best.  There are many tools, experts, and adherents.  And yet, the symptoms of project failure have not improved dramatically in almost a decade.
  • Complexity is Complicated.  It is non-linearly dependent on Depth of Context - such as number of people, organizations, stakeholders, viewpoints, etc. involved.
  • Complexity cannot be eliminated - as long as there is context (e.g. there are people involved.)
  • Complexity is, however, manageable with capability-based approaches, because they integrate a number of approaches to address the challenge at hand.
  • So Business / IT Unity is a very specific point of the Business / IT Alignment gradient that is only possible with very shallow Depth of Context.  
  • And finally, Business / IT Alignment is not just an IT problem.  It takes two to tango.


Are Current Organizational Structures Inherently Unstable?

Friday, March 12, 2010 |

"The Bronze Horseman is a monument to Peter the Great from Catherine the Great. It stands on Senate Square, facing the Neva River and surrounded by the Admiralty, St Isaac's Cathedral and the Senate and Synod buildings. The statue, created by the famous French sculptor Etienne Maurice Falconet, depicts Peter the Great as a Roman hero on horseback, pointing the way for Russia, while his horse steps on a snake, which represents the enemies of Peter and his reforms."
What interests me in this statue, and why it makes an appearance in this post, is it's remarkable structure.  It is balanced on three very small points - 2 rear hooves and tail.  And being made of bronze, it is a very heavy statue.  It was impossible for Falconet to balance it just on the two rear hooves.  He needed a 3rd point to make it stable, and tail was that 3rd point.

Organizational structures are not all that different.  Where bronze statues have the force of gravity constantly pulling them down and other forces of nature slowly eroding them over time, organizations face many forces, both internal and external, that threaten their sustainability.  And yet, as I wrote in a prior post, most organizations seem to be missing that 3rd point of stability.  There are many internal groups whose purview is Organizational Persistence - both from a customer and organization points of view.  But most organizations have them scattered around with little budgetary or true oversight authority.  The thought of a third organizational branch was intriguing enough to merit several responses, and the conversation is still going strong.

One of the interesting corollaries is where would the Organizational Persistence branch report.  Ultimately, the group that is responsible for long-term viability is the owners - whether it's individuals, private equity, or shareholders.  In a case of publicly owned company, this group is represented by the Board of Directors. And yet, the shortcomings of BoDs have been well documented, perhaps most bitingly as by Carl Icahn's United Shareholders of America project.  But from a good governance perspective, that is precisely where the OP teams should be aligned with.  This alignment could benefit both sides - it could give OP teams the necessary operating room, while providing the BoDs the level of visibility required for operational intelligence.


Decoding Business/IT Unity

Tuesday, March 2, 2010 |

Thanks again to the BPM/SOA Consortium for inviting me to speak at the OMG Technical Meeting in Jacksonville, FL on March 24th.  I've been compiling war stories and case studies on this topic over the past year - readers of this blog have seen some of them bubble up to the surface over several posts.  And during the last meeting in Long Beach, it struck me that those of us working on bridging operating models and approaches between Business and IT are missing a critical voice in the room - the voice of the P&L owner.  So for this presentation, I invited several P&L owners who have or are working with us to provide their perspective on what is right and wrong in their IT relationships.  Given how busy these folks are, most of them chose to share their stories as case studies, but some might just show up in Jacksonville with me!

Abstract: A lot has been written and said on the topic of Business/IT Alignment. A lot of methods have been tried, and yet the goal has never seemed as elusive as it does in today's business climate. Business comes to the table with the increased pressures of the business cycle, the ever increasing information velocity, and the ever-more demanding client. IT comes to the table with solutions that seem to only increase in complexity bolstered by ever expanding technology disciplines, vendors, and standards, not to mention the baggage of years of suboptimal decisions coming home to roost. Business comes to the table from the top down. IT from the bottom up. They each speak a myriad of different 'Englishes'. They generally have an issue agreeing on how to define terms of engagement, or even who should own those terms, something we commonly see bubble up to the surface as data governance challenges. The mismatch between the business operating models of IT and their business stakeholders (or BOMM for short) can provide clues as to why the relationship between business and IT sometimes comes to resemble a cold war. This presentation will examine Business IT Alignment Patterns (and anti-Patterns) from the perspective of Business P&L Owners at various sizes of organization.