Synchronising the Business for Competitive Advantage

Source: Taming Information Chaos: A State of the Art Report on the Use of Business Intelligence for Decision Making, 2007

Key Insights:
Businesses have access to a wealth of information in their business but many fall short in accessing and using it in a meaningful way.

Many organisations are encumbered by disparate legacy systems, from different technology platforms, applications, interfaces and formats.

This is particularly apparent in public sector organisations and financial services, where a piecemeal approach to infrastructure development has resulted in systems that cannot communicate with each other or be exploited in collaborative and automated processes.

In turbulent economic climate, companies are coming to the realisation that integrated systems are the key to creating competitive advantage through flexibility, agility, adaptability and access to real-time information for effective decision making.

Integration on different fronts
Today's organisations are sitting on a network of information goldmines, each originating from disparate application and IT systems, operating detached business processes which are difficult and expensive to change. As a result, customers often have to deal with multiple points of contact, receive conflicting information and do not benefit from combined customer value status. IDC's ANZ Forecast for Management Survey 2009 found that managers' top two IT priorities for 2009 are reducing costs and meeting end users expectations, both inhibited by organisations' discrete and siloed IT environments. Time is further becoming a critical success factor as rapidly changing business environments require immediate action in order to keep abreast of market dynamics and ahead of competition. SOA and Data Warehousing have emerged as salvation by enabling integration on both, the application and information level. The growing importance of SOA and integration technologies is also reflected in the same survey; in 2008 only 0.6% of companies picked SOA as an IT priority compared to 3.3% in 2009 while data warehousing increased in importance from 8.5% to 9.9% of respondents.

Elevating from the market average
In the 2007 study "Taming Information Chaos" IDC quantified the gap between market leaders and average organisations in the use of technology to support automated information processing and fact based decision making. Some of the findings of the above study include that 75% of the 1,072 respondents from 22 countries cited information overload, and many claim that up to half of all information available to them is useless for their decision making. Furthermore respondents claim that 37% of all business decisions remain primarily 'gut' or instinctive. These findings raise concerns about the business practices in many organisations and the urgent need for these companies to bring their information environments into order.

Creating Flexibility with a Unified Structure
It may seem a paradoxical concept that to achieve flexibility a structured protocol is necessary. As IT and business priorities converge, SOA is seen as a valuable tool which enables a business to roll out services more rapidly, respond timely to business changes and as an IT optimisation tool. This is extremely valuable in today's turbulent economic environment where the ability to respond to market changes separates survivors from victims of this recession. SOA provides greater integration of information and processes leading to faster and improved services. Despite this process being about streamlining processes, freeing up information and providing insight, flexibility without governance and structure is a recipe for disaster. Ultimately a decision maker must take control of the project and a change manager appointed to oversee the implementation of new processes with all business stakeholders.

In a world where accurate timely knowledge is essential for creating and maintaining competitive advantage, CxOs must have a single version of the truth in order to make appropriate strategic decisions. CFOs in particular are impacted due to an ever increasing catalogue of compliance needs. The key is in the ability for CIO's and CxO's to work closely together to develop integrated, optimised systems that enable organisations to create a holistic viewpoint of the business and its environment. Going forward, IDC predicts continuous change in companies' practices from transaction and process centric to information centric approaches. Integration of business intelligence tools in business process management is one example for this ongoing trend. Intelligent process automation – a concept introduced by IDC in 2003 – brings together business analytics and business process technologies to enable automation of repeatable, operational decisions. Modern process applications are increasingly information rich. In essence, over the next few years, users will increasingly have all the information they need to make real-time, risk-managed decisions directly from within their applications.