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Getting Enterprise Decision Making to Work

Published
  • November 01 1999, 1:00am EST

If you have followed this column the past several months, you've seen a distinct point of view developing (and if you are a new reader, welcome!). This point of view suggests that overall business performance is elevated when decision making is improved and aligned with the strategic intent of the company. To achieve this, an integrated strategic decisioning environment is needed at all levels of the enterprise, across all functions. A connected enterprise architecture for decision making is required (see Figure 1).

In this column we'll examine how the connected enterprise architecture is put into motion - how it works. We'll decompose it into its component parts to discuss the role each plays in delivering an integrated decisioning environment.

Operations Foundation

Enabling the Business. At the core of the operations foundation is a structured, yet nimble technology infrastructure. This infrastructure provides the basis for integrating the operational, informational and analytical processing of the enterprise. To be successful, the technologies supporting all aspects of the business knowledge domain must be woven together in a convergence of technologies which are often viewed separately. Structured data and unstructured data - documents, images, video - must be supported by a flexible and scalable infrastructure which allows all digital assets to be managed with similar dexterity to support enterprise decision making.

Running the Business. The transaction processing infrastructure provides the systems and process support for executing the day-to-day functions of the business. Here, the business transactions are created, captured and acted upon. Despite the pummeling in the recent press, ERP solutions will remain a key part of the enterprise information management landscape. An effective strategic decisioning environment is fueled by data which originates from business operations. Having standardized data and processes to draw from provides an enormous accelerator toward achieving analytical capability. Because of this relationship, organizations may elect to implement only selected portions of the full product suites available from ERP vendors, choosing to focus on those operational components which provide greatest value toward implementing analytical solutions.


CONNECTED ENTERPRISE ARCHITECTURE

DECISION PROCESS MANAGEMENT
Information & Knowledge Delivery
Analytical Applications
Operational Process Optimization

Data Warehouse Infrastructure
Transaction Processing Infrastructure
IT Infrastructure
OPERATIONS FOUNDATION
 

Figure 1: Connected Enterprise Architecture

Integrating the Business. Even with a high degree of uniformity in the transaction processing infrastructure, most organizations are not able to achieve a truly integrated view of their data. In most cases, ERP systems do not deliver integrated data across functional silos. In order to report on and analyze data which spans areas such as sales, logistics and manufacturing, an integrating technology - data warehousing - is required. Last month we discussed the importance of the data warehouse in the connected enterprise architecture. The data warehouse serves as the linchpin between transaction processing and strategic decisioning, ensuring that a common, integrated view of data is available for operational, analytical and informational decision-making processes.

Decision Process Management

Optimizing the Business. Decision process management begins with an optimization layer focused on key functions which are operational in nature that are enhanced with the unique attributes of data warehousing technologies. Traditional transaction processes are enriched with characteristics such as trending, historical analysis and multidimensional viewing when powered by a data warehouse. Functionality of diverse operational decisioning processes (such as demand planning, database marketing, field service and sales force automation) is extended by data warehouse underpinnings. At this layer, the line between the operational and analytical side of the business becomes blurred as execution systems such as call center customer service are coupled with analytical processing such as customer value modeling.

Managing the Business. For an organization to proactively manage its performance, it must evolve its perspective of the business from a retrospective view (what happened) to a prospective view (what will happen and why). The analytical applications suite of the enterprise shapes key directional decisions which will affect future business results. Which customers will be most profitable as we enter the middle market? What promotions will work and where? How do we best leverage our worldwide purchasing power? How will a planned acquisition in Latin America affect free cash flow and tax liability? Gaining this forward-looking insight requires the application of analytical systems, models and techniques. And, perhaps most important, the analytical decision processes must be explicitly addressed. There won't be much process reengineering at this layer of the connected enterprise, but rather process engineering - most organizations have not mapped how important analytical activities such as pricing, promotion effectiveness, customer valuation and tax planning should be procedurally conducted.

Steering the Business. Many complex enterprises today still have very little visibility to the status, direction and health of the organization on a real-time basis. Gaining a "state of the strategy" report can takes weeks, and by then what is reported is out of date. Information and knowledge delivery services provide a portal to information sensors throughout the company, monitoring all aspects of the business, both operational and analytical. Keep in mind that many significant measures used to track enterprise performance - market share, profitability, yield - are not simple metrics. These complex indicators are generated by robust applications, which require that information delivery systems be linked to the other layers of the connected enterprise architecture. The information delivery layer provides a visual dashboard to track key business drivers and enables drill through to operational performance indicators to examine underlying data and business assumptions which convey additional business context.

A few closing words regarding tools and technologies to assist you in bringing the connected enterprise architecture to life: look closely for vendors with vision and ability to deliver. Most of the rhetoric in the market today sounds very similar; get behind the PowerPoint slides to investigate product development and release time lines.

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