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Creating the
intelligent enterprise
Active data warehousing converts data from a by-product of operations to a service to the business.
by Jon Gibbs, Capgemini
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Information lies at the nexus of people, process and technology. An intelligent enterprise is one that has harnessed the power of its information to drive an effective organization.
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Despite investing billions in information technology, many businesses lack a seamless flow of information among customers, suppliers and their employees. Managers and executives still resort to their own personal documents and spreadsheets to make decisions. Front-line employees do not have effective data for proper process control or customer relationship management (CRM). Most organizations cannot provide their people with the right information at the right time; consequently, they are far more reactive than proactive. In the final analysis, they are not effectively managing their current and future performance.
What if an organization had the right information at the right time? What if management could perform analysis on historical data from across the enterprise? What if front-line employees could make CRM decisions with up-to-the-minute data? By investing in data, managing information and mining it for insight, smart companies are making themselves more competitive in the marketplace. They’ve become intelligent enterprises.
Intelligent enterprises overcome the challenges of exploding data volumes by managing information as an asset to be planned, built, maintained and mined. Like any set of assets, information has differing value, a useful life and an expected return. The intelligent enterprises are building the information capability to shape their futures rather than hoping the past will repeat itself. They are using active data warehousing.
An active data warehouse combines deep, detailed historical data with current operational data and events. It provides the full context required for sophisticated analytics and automated business rules that operate
in real time. The active data warehouse
thus not only supports management in making strategic decisions but also gives front-line employees the information they need to drive improvements in customer relationships, supply chain efficiency and financial operations.
When okay is not good enough
According to Capgemini’s research, in the United Kingdom, the average executive faces 20 business-critical decisions each year. The typical impact of a single choice is more than $290,000; that represents some $5.8 million per decision maker each and every year. Combine that with the average self-declared decision “miss rate” of 24%, and losses per executive total nearly $1.4 million per year.
Among financial services companies operating globally, those
with centralized knowledge, data management and
the ability to deliver real-time decision support boasted 43% higher income growth and a 39% higher stock price than those without. In manufacturing and high tech, real-time decision capabilities brought companies 11% higher revenue growth and 28% to 35% better three-year sales growth.
The results are compelling. So why don’t
we see more intelligent enterprises?
The process of most management decision-making today is frighteningly similar to steering a car by looking in the rear view mirror. Managers focus on figures and trends from the past rather than effectively managing for the future. Decision makers take their strategic information as extracts from major enterprise business systems such as enterprise resource planning (ERP), supply chain management or CRM, rather than using them as intended.
Often, the data itself is an issue. According to estimates by IDC, some 50 billion e-mails
a day pass through the Internet. The year-over-year increase in corporate data creation is estimated at between 40% and 60%. The amount of information that people process
on a daily basis is growing exponentially
and there is no sign of any let up.
Of course, the burden of compliance generates even more data. In the United States and Europe alone, more than 10,000 laws and regulations impact the governance of business data and information. Unfortunately, most organizations focus on developing compliant processes in an ad hoc manner, rather than optimizing the process through good governance.
Focusing on creating compliant processes just creates more data, as Capgemini’s compliance audits have shown. For example, in just one part of its business, a leading oil company created 10,000 spreadsheets to comply with the Sarbanes-Oxley Act. If an intelligent enterprise instead focuses on an effective governance effort, it satisfies regulations with less superfluous and redundant data, all the while driving business success.
Clearly, the potential impact of using active data warehousing to convert a company to an intelligent enterprise is enormous.
What does good look like?
Intelligent enterprises use process and technology data from across the business enterprise to better serve their customers and drive revenue. Such companies know that to make their people and processes most effective, they must supply the best information and analysis tools. Through approaches such as active data warehousing, they turn information into a service to the business, not a by-product of operations.
Active data warehousing means having
up-to-date, relevant information from across the enterprise available in the right timeframe to allow the decision makers to make the right calls. With such tools, intelligent enterprises know what services and/or products their customers want, and understand costs and pricing impacts. Analysis immediately reveals the negative effects of delays in delivery or completion, allowing them to take coordinated action as part of the overarching strategy of top leadership, pushed down
to decision makers at every level. Such an active approach allows companies to make consistently better decisions and achieve sustained business outcomes.
Achieving the kind of operational levels we’ve been discussing goes beyond business intelligence (BI) and management reporting. Organizations must see information management as an executive responsibility and they must have a comprehensive plan for it. They need to develop a true information architecture that makes it clearly apparent how information flows around the business, increases in value and delivers that value. They must take into account data quality, consistency and timeliness; above all, they must understand and enhance the organization’s ability to turn data into information.
With an enterprise data warehouse (EDW), a company can drive an integrated view of
all data and information in the business, covering all systems and databases. Deciding where the value lies, now and in the future, is a critical step. One major retailer, for example, redesigned their whole supply-and-demand chain to be information-centric; the resultant near real-time information can be accessed by staff, suppliers and customers.
Getting the best results from an active data warehouse requires focusing less on what functionality to implement and more on how to use the tool to transform business capabilities by having the right information. Concentrate on quantifiable goals like accelerating quote-to-order time by three days, or improving supply chain return on investment (ROI) by 25%.
Making good better
A holistic information approach involves linking compliance-related projects and
budgets with those designed to enhance the business. To unlock value and reduce cost, move management information and reporting into an enterprise information layer separate from business systems. A service-oriented architecture (SOA) in conjunction with an active data warehouse provides a powerful and flexible method to accomplish this.
Performance-management solutions connect the top-down goals of management with day-to-day business operations,
using live information in the business to analyze the past, predict the future and,
most importantly, manage the now. With
its ability to access, analyze and deliver a potent combination of historical and real-time or near real-time data, an active data warehouse presents the most effective
means to realize that goal.
Leading organizations are using intelligence to shape their destinies and drive sustainable business success. Leveraging BI and information management moves companies beyond management information to the realm of intelligent enterprise. T
Jon Gibbs is senior manager at Capgemini.
© Teradata Magazine-June 2006
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