This topic is especially relevant now that the main BI suites have been acquired by the likes of Oracle, SAP and IBM. Industry consolidation could well mean that BI will increasingly become an embedded function of enterprise software as customers demand more comprehensive solutions rather than standalone applications. But an all-or-nothing BI sales proposition could backfire on the giants if it forces customers to buy and install more functionality than they want or need. If there were a way to describe the decision support environment that the BI suite supports, designers could choose the degree to which they go standalone or utilize embedded functionality.
An Organizational Systems Approach to BI Design
Organizational systems view the human enterprise as a living entity with internal and external processes akin to that of other living organisms. These processes include: sensing, cognition, culture formation, decisioning and organizational learning, maintenance and adaptation. An organizational systems approach to BI design asks of the environment, “How complex are the organization’s decision processes, and what outcomes are expected of the BI solution?”
In the organization theory of Snowdon and Boone, complexity is about how predictable the environment appears to be. The less predictable the mode of decision-making is, the more complex it is and the less structured its BI solution is likely to be. The more succinctly a BI environment can be modeled, the less complex it is likely to be. These states of complexity present specific design considerations that a BI implementer will need to examine in addition to the technology platform, considerations that take into account the behavior of internal cultures associated with various occupational groups. Scholars such as Edgar Schein have identified several internal organizational “cultures” or groups with characteristic styles of acting and deciding. These can be described in terms of the complexity of their decision styles and their BI needs.
An operational environment that involves routine activities and processing, such as accounting, billing, payroll and receivables is relatively uncomplicated because it is generally predictable month to month. Decisions, too, are likely to be rule-based and relatively predictable, as are standard operating reports. On the other hand, the decision environment for the engineering/technical function is likely to involve more unstructured activities such as experimentation, simulations, queries of past product performance, quality metrics and production history. For sales/marketing, questions will relate to how certain products are doing, closing the loop on marketing campaigns, customer segmentation and satisfaction metrics, competitive intelligence and tracking the sales pipeline. These questions are both routine and ad hoc and are more related to the organization’s business model than to its operating rules, even though some routine operational reporting such as channel and sales performance metrics will still exist.
At the executive level, the decision process is even more nebulous. Corporate executives are concerned with now routine issues (financial reporting), emergent issues (market and competitive dynamics) and regulatory reporting all relate to the organization’s mission and purpose. Each of these respective organizational cultures – operational, technical/engineering, sales/marketing, executive - views the world through its own “lens” of perception and requires a unique set of BI capabilities.
An Organizational Schema for BI Solution Design
Figure 1 presents a schema to relate the complexity of the organizational decision environment to its impact on the BI solution design.
From an organizational systems perspective, the BI designer is challenged to align these diverse expectations of internal user groups to the technical solution. In the schema described, the role of the BI implementer is expanded to include not only the technology platform that the BI suite will utilize, but also the decision environment and characteristics of the BI client’s organization culture.
A BI technology solution that is embedded in an enterprise software suite will likely have access to a larger domain of operational data and will serve the needs of more occupational groups than a simple standalone solution, especially at the executive level. Standalone BI solutions are more appropriate for the operational, technical and sales/marketing user communities.
The BI environment includes more than just its technology platform because there is a human dimension as well. The organizational environment is described here in terms of its complexity - the degree to which it exhibits less predictable modes of decision-making. These modes overlap organizational levels, but tend to cluster around four different occupational groups or internal cultures, each of which has a characteristic decision-making style. These groups are, respectively, the operational, technical, sales/marketing and the executive. The latter presents the most problematic design issues for the BI implementer because its mode of decision-making is the least predictable, most complex and requires access to the largest domain of enterprise data. In each case, considering the type of decision environment can assist the BI designer to more effectively align the proposed BI technology solution to the needs of the organization.
Jerry Kurtyka is managing director for Whitestone Technology, an independent consultancy focused on the humanistic and leadership aspects of technology. He is a frequent writer and speaker on the topics of BI and CRM. His credentials include consulting, sales and marketing of CRM software to international banks and nine years as a banker where he held VP positions in strategic planning, retail banking and new business development. He can be reached at jerrykurtyka@hotmail.com.
