Like a prism untouched by light, many enterprises are in the dark regarding their most precious business resources. Across their diversified operations, companies own assets, employ personnel and hold resources that are inefficiently or insufficiently deployed or applied. From disconnected service operations to siloed data to unrecognized expertise, the potential value of many enterprise assets is untapped. The result can be squandered opportunity—unused talent, misplaced priorities, unproductive efforts—that compromises effective operations and ultimately diminishes business success.

Decision makers with the savvy to look beyond their immediate functional requirements can take a centralized view of enterprise resources and learn to optimally use all assets. By leveraging the organization's resources to their maximum effect, executives can drive new enterprise synergy.

Enterprise synergy efforts tend to be driven by recognized problems or opportunities, rather than executive mandate. "Often, it isn't C-level executives who understand the need to address synergy," explains Richard Winter, president of Winter Corporation, an independent data management consulting firm. "It often comes from decision makers on the front lines who identify an opportunity."

Yet launching an overarching enterprise synergy initiative would be overkill. Instead, experts in maximizing the value of corporate resources advise you to tackle one disjointed class of assets at a time, delivering quantifiable results in predictable increments. Although there are no "enterprise synergy gurus," you can learn valuable lessons from those who specialize in viewing organizations from the outside in.

Lessons from mergers and acquisitions
One common reason that large organizations analyze their assets is to meet the requirements of a merger or acquisition. If your company has experienced any merger and acquisition activity in the recent past, you know the scrutiny of assets, such as facilities, labor and supply chains, is brief but intense. Yet a business case can be made for executing this type of assessment as a matter of enhancing corporate value.

John Powers, a principal at Deloitte who specializes in supporting merging companies, has also worked on "simplification" projects with enterprises interested in maximizing synergies. With mergers or acquisitions as well as simplification projects, companies must begin by understanding their assets and how their value can be enhanced. (See table 1, below.)

Most assessments focus on hard assets because they provide tremendous opportunities to:

	Lower the cost by consolidating operations or reducing headcount
	Increase the revenue by selling the same goods to an expanded customer base or producing more goods using the existing facilities

"If you can leverage one infrastructure instead of two, you can usually provide more consistent, responsive service," says Powers. "This will help you get better returns on your costs."

Synergizing soft assets
Yet enterprises seeking to enhance synergy need not limit their efforts to hard assets. "For many companies, the soft and intangible assets are where the synergy is lost," Powers says. "Soft assets can be defined, but they are more difficult to value in the same way as a hard asset. Yet addressing levels of synergies on anything that overlaps—such as service or people—is always a wise move."

For example, most service and support functions—such as customer service, IT and finance—can be shared in designated or pooled offerings. (See table 2, below.) Processes that can serve multiple organizations can improve both quality and consistency, leveraging information more effectively. "The more information you share, the easier it is to consolidate data and spot patterns, and the faster you can take informed action," says Powers.

Another soft asset that can be synergized is personnel—both at an individual and group level. "There are few strategic goals of a company that couldn't be improved through better synergy of personnel assets, especially where it concerns time management, communication and a sense of responsibility," says William McKnight, senior vice president of data warehousing for Conversion Services International, a consulting, data warehousing and business intelligence (BI) services firm. "Companies tend to hire for talent and fire for a lack of these qualities. But we need to train for these assets and lead by example."

Optimizing personnel assets may require a top-down mindset change, however. Too many executives focus exclusively on short-term goals, ignoring the planning, communication and delegation of tasks that would help organizations make the most of their personnel. "If you don't set the tone from top leadership, you cannot expect to drive people to behavior that will help you meet your goals," says McKnight. "By investing in people and infrastructure, you help people contribute to enterprise success."

Table 1: Corporate assets to be valued TYPE EXAMPLES HOW TO INCREASE VALUE Hard Factories, infrastructure Scale to reduce costs or increase revenues Intangible Intellectual capital, patents, processes Use more efficiently or effectively Soft People, brand Can only safeguard and use appropriately Table 2: Shared resources for a customer service operation TYPE DEFINITION HOW IT WORKS EXAMPLES Dedicated Used by only specific divisions, groups, employees or customers Services or support for high-value customers Individual account rep for high-tech company handles any problems with customized software Designated Shared within certain boundaries Service provided to restricted group of users VIP customers have special access to rapid response service team Pooled Any resource available to any user Member of large service group answers calls from equally valued customers Phone customer service center

Deconstructing decision support
Another way to help personnel succeed is to synergize corporate data. In many organizations, enterprise data is difficult to access in a way that makes sense to users. The result is that workers attempting to execute a business process must access multiple systems to get the data they need. This inefficiency compromises productivity and increases users' frustration.

"The key component is to understand how people make decisions," explains J. Paul Kirby, senior analyst for Forrester Research. "People need to use information to make better decisions and take actions that are better for the bottom line. But if these processes impede the use of the information, it may be time for a realignment of the assets."

Effectively supporting the organization requires an understanding of how the data is used. Kirby classifies decision makers into three groups: strategic, tactical and operational. Each type of decision maker has different decision support needs and related technology requirements:

	Strategic decision makers usually exist in small groups of people. Data latency is not critical for these users because each decision may take weeks or months. These users rely on detailed information to deliver a single view of the enterprise.
	There are larger numbers of tactical decision makers who require little or no data latency. These users need fresh data, and performance is important; reports that take 10 minutes to generate may be unacceptable. Tactical decision makers require both aggregate and detailed data.
	Operational decision makers, such as call center agents, need the most current data with zero latency. A customer service representative on the phone with a customer must be able to provide information immediately, without having to search through multiple systems. An integrated environment such as a portal creates an efficient presentation. Because these users typically require only one or two systems to get their information, siloed applications are acceptable if the information is easily accessible.

Simplifying data assets is another way to pursue enterprise synergy. "By removing the unnecessary complexity that builds up in enterprises over time, you can not only reduce costs but also increase synergy," says Powers. "When you simplify, you begin to standardize data forms, which improves the value of the data. Because it's easier to understand, you can get more leverage from it. Using the same platforms and people and processes improves value to the customer. The added benefit is that the data is then sorted, analyzed and categorized the same way, so you can start to spot patterns and use it more effectively."

In fact, lacking the will to consolidate the business on standardized platforms may be one of the biggest potential pitfalls of simplification projects. "It takes a lot of discipline and energy to convince people that there is value to the company to do this," says Powers. "You must use incentives to make it attractive to people, so they are willing to go through this change."

Create a strategy for success
Creating a winning approach to enterprise synergy requires several key ingredients. Critical components for enabling enterprise synergy efforts can include:

	Infrastructure
	Enterprise data warehouse (EDW)
	Enterprise resource planning (ERP)
	Master data management (MDM)

"The simpler you can make the application architecture, the easier it is to make these changes," says Powers. "A data warehouse is absolutely essential. If you can process standardized data inputs, you can retrieve patterns and insights. ERP systems are great because they standardize the input, which saves time and money." Moreover, combining ERP and MDM in an EDW facilitates an enterprise-wide standard for data definitions ensuring cross-organization data consistency.

Furthermore, IT professionals can improve the chances of success by ensuring they are aligned with the organization's strategic goals. "The challenge for IT is to develop a level of trust and understanding with the business," says Kirby. "Only then can they understand how to present exactly the data that users need, so they can do their jobs efficiently."

To build on the vision for enterprise synergy, companies must develop a plan to create and celebrate a series of simplification successes. "It's important that you create smaller near-term wins and build on those," says Winter. "If you begin with a few data sources and produce a business solution, then you can tackle additional stages over several phases of the project."

Treating the simplification process as if it is a long-term corporate journey is the best way to convince employees that you are serious about the effort. "There must be continuous progress toward the end goal," advises McKnight. "You need to do something every day that shows you are taking steps, that it is an important initiative for the company. If you don't, people will sense that this is just a whim and they will act accordingly."

Moreover, good governance can help the organization determine which resources should be leveraged to create synergy, establishing priorities and controlling the scope of the project. When properly executed, this governance can help set a responsible scope for the project, resolve conflicts and ensure that all parts of the organization are well-represented in the project—so that everyone has a fair chance to help shape the new enterprise direction.

Kirby advises decision makers to focus on what the organization needs, rather than on what already exists. "Something you have may not be as valuable as you think, while something you are missing could be just the thing you need," he says. "It's better to be grounded on your goals and requirements than on your current state. By comparing what you have with what you need, you can identify gaps and resolve them. That's the best way to achieve the synergy your enterprise requires." T

A strategy of synergy Continental's transformation from the worst airline company in the United States to the best is nothing less than inspiring. As documented in an enterprise case study developed by Continental and Teradata, Continental recognized the need to synergize its employees, departments and technology to work for not only a greater finished product, but also survival of the company. An enterprise data warehouse (EDW) was identified as a means of centralizing the information and systems to fulfill this need. Though the demands of the Revenue Management application initially began the EDW program, brainstorming sessions with Continental employees generated further uses for the development of the EDW. The EDW provides centralized, consistent information for applications, allowing employees all around the company to make better tactical decisions quickly. The EDW supports four primary applications: > Revenue Management provides real-time revenue projections for any flight so appropriate pricing and booking decisions can be made. > Customer Relationship Management provides a single, integrated view of each customer to give accurate, up-to-date profitability pictures. > Flight Management Dashboard tracks all flights and monitors late flights. > Fraud Detection identifies noncompliant reservations and profiles suspicious booking and ticketing transactions. Demonstrating additional cooperation between employees and departments, the distinction between Continental's IT and business users is difficult to pinpoint. IT understands the business needs, and many business users are technically savvy enough to develop reports on their own. Now, when additional business cases for further EDW projects are presented, employees recognize the impact of the project not only for the specific application but also for other departments. This cooperation is critical to the ongoing success of the EDW. With a strategy of synergy, Continental converted itself to a profitable, growing company. Read more about Continental's turnaround at Teradata.com/customers/continental. —Julie Heileman

Cheryl D. Krivda has written for more than 20 years about the intersection of high technology and business practices for publications and corporations around the world. Contact her at ckrivda@cmkcom.com.

Illustration by Ron Wieman

Teradata Magazine-March 2007