Thousands of organizations, investing millions of hours and spending billions of dollars, have dedicated the last several years to implementing new, integrated information management capabilities. These programs, generically called enterprise resource planning (ERP), told of a future of common business processes, uniform operating practices and integrated transaction processing activities.
However, many companies have not realized the leaps in competitive advantage and return on investment promised by these initiatives. Too often these programs have fallen short of expectations held by the user community, business sponsors, the executive team and the investment community. Let's quickly emphasize, however, that this is not to say that these efforts have been without purpose or value. Substantial benefit has been derived; and, in many cases, practical realities altered the grand design. Some organizations quickly determined that the sheer scope and complexity of implementing an integrated processing infrastructure across all functions, business units and geographic regions was enough in itself without addressing basic process redesign. In other situations, companies had to resign themselves to the fact that they were racing to beat the Y2K clock and not the competition.
The Case for Decision Process Management
Achieving standardized business practices, processes and operational systems clearly produces tangible benefits. Organizations will continue to expand the benefit stream from their ERP investments as they automate additional back-office functions. Likewise, value mining from ERP platforms will take many forms as companies galvanize around efficiency and integration. Expectations surrounding the return on investment of ERP implementations, however, have changed rapidly and dramatically. To put it one way, enterprise results and performance begin with ERP, but that is just the beginning.
We have a great opportunity to learn from our legacy. In the late 1980s, many organizations were well along the road toward implementing systems to support MRP, inventory control, financial functions, sales order processing, etc. With the maturity and broad acceptance of ERP systems by the early 1990s, organizations were able to shift from implementing these functions as discrete and separate to a more cohesive approach supported by comprehensive packages of integrated modules. Similarly, in recent years as companies began to introduce new technologies to support various analytical and decision-oriented functions, these efforts were typically implemented independently and without intent on integrating the underlying decisioning processes throughout the organization. While adding considerable incremental value, many of these new systems (such as promotion planning, profitability analysis, sales analysis, marketing automation, budgeting and forecasting, to name a few) have been automated with little overarching structure or vision, thereby reducing the sustainable strategic value.
The good news is that many senior managers are realizing they're still not using their company's information assets to best advantage. Members of the executive team may now have the ability to know what's going on in more parts of the company than previously possible. They may have the data to better run the business and to judge past performance. Recognizing that this is far short of what is needed to attain and retain a competitive edge, vanguard leaders will be more focused on ensuring their organizations have the business knowledge necessary to understand and influence the organization's future direction and, correspondingly, its competitive potential.
I believe this aggressive thinking sets the stage for a rapid evolution toward robust enabling capability aimed at an organization's knowledge workers. It will leverage the operational foundation of the enterprise to achieve consistent, synchronized and radically improved organizational decision making. I refer to this enabling capability as decision process management (see Figure 1).
Figure 1: Decision Process Management Architecture
Decision process management (DPM) is the collective infrastructure of the enterprise which elevates ERP, other transactional systems and data warehousing to achieve management outcomes. DPM is much more than decision support tools. DPM includes the organization change elements, management practices and protocols, process flows and technologies required to achieve improved organizational decision making. Just as ERP systems integrate the transaction processing core of the organization, DPM will integrate the decision-making processes across the enterprise.
Tool and frameworks vendors are already aligning, combining and otherwise joining forces to provide enterprise management solutions. This is movement in the right direction. To evolve to true DPM, however, business content, process architecture and industry life cycle models must converge with the technical enablers. Look for content suppliers and process model providers who bring deep functional and vertical market insight to play a prominent role. In the post-ERP era, whoever crystallizes the definition, packaging and delivery of an enterprise decisioning environment to support the organization's knowledge workers will enjoy a prosperous ride for many years.
In the coming months we will examine the components of decision process management and discuss how enterprise decisioning processes fit within the new business knowledge platforms of growth, capital and efficiency.
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