In a world that is complex, globally interdependent and massively interconnected, business strategies are becoming increasingly accepted as having a shorter time focuses and being adaptable within that period. Thus, strategic decisions must be based on real time evidence-based insight and collaborative expertise.
Traditional command and control leadership models are outdated, and are evolving towards a more collaborative and process-oriented culture. The same culture that is underpinning the evolution of the Cloud. BI tools provide the market transparency to identify ‘triggers’ and evidence-based decision making support needed to ensure more appropriate and timely decision making, and the Cloud is providing the rapid adaptability needed to deploy new tools needed for the rapid deployment of new strategies.
Businesses are continuously being forced to revisit three critical strategic questions:
- What business are we really in?
- What triggering signals should we be measuring?
- Do we have the business tools to plan investments and operational activities with the lowest possible risk and enable us to react quickly to the triggering signals?
And yet transformational system must also incorporate the vital elements of control – visibility, compliance and governance.
As businesses realize that importance of the information value chain to their needed agility, capturing the collective wisdom of their organizations and markets is a core business capability. Yet for many, their enterprise systems are not capable of supporting business intelligence systems.
The value of BI relies on intelligence being captured and automatically applied at key decision points. Operational BI is the key driver to optimizing business processes that enable the best possible response to customer needs, often before a customer is even aware of that need. In turn, that drives the productivity of the business.
Operational decisions today must be based on real-time insight, often the result of analysis of a complex set of events, any one of which is capable of altering an existing decision making model. Thus, decisions have become fluid, and are only ‘true’ for moments in time.
Before the latest advanced business intelligence tools, business leaders were reliant on information systems built on transactional data models. In many cases, due to the lesser speed and complexity of business, this provided adequate decision support. Not so today.
Business today must have the ability to rapidly change processes and react to events without delay and with minimal resources. With the web driving vast change in the blink of an eye, change, adaptability and visibility are now key drivers to business success.
The typical suite of business applications – ERP (Enterprise Resource Planning), SCM (Supply Chain Management), CRM (Customer Relationship Management), HRM (Human Resources Management), PLM (Product Lifecycle Management), MRO (Maintenance,
Repair and Operations), MES (Manufacturing Execution Systems), have proven solid infrastructures to run global organizations, but are inadequate in design and processing capability to perform the real time analytics needed to support these business drivers. Nor, are the infrastructures that support them capable of supporting the needs of BI tools.
Thus, just as business drivers have changed, so too must IT drivers to support the business. One of the major constraints of implementing and deploying BI databases, applications and tools has been the lack of capability to readily extract data from numerous disparate data sources, aggregate it and format it to support real time analytics.
Cloud computing changes that!. Whilst cloud doesn’t deal with the data issues, the virtualization inherent in cloud architectures makes a significant contribution. Accessing transactional records are a simple query, requiring little in the way of processing power. However, the large complex queries common to analytics requires bursts of processing power necessitating instant scalability.
New sets of metrics [Key Performance Indicators] must extend beyond the enterprise walls to capture social and market drivers not previously in existence, adding further complexity to the data streams that must support business decisions.
As business leaders make new kinds of strategic and operational decisions, CIO’s in turn are faced with the new challenges to change and adapt corporate technology at the same pace.
The disconnect between the agility needed by the business and the agility inherent in enterprise platforms has been a major constraint in business success and growth. Cloud computing provides that agility faster and easier than ever envisaged even a few years ago. This has elevated IT out of the basement and into the boardroom as a competitive differentiator that will determine which companies are the winners emerging from the current recession. The economic climate, coupled with this new technology capability offers a seldom seen environment for previously struggling companies to take leadership roles in their industries, leap-frogging over less agile incumbents.
One trailing constraint continues to cause me some concern, executives who still struggle with new technology, many using more than the basic functions of desktop applications. Coupled with the poor representation of CIO’s in board membership, and the problem is obvious. How can business leaders give directions to their CIO’s when they no longer fully comprehend the environment in which they are operating and the resources that will keep them competitive. We have moved beyond the era where cost reductions will significantly impact business competitiveness. Today it is about building deeper customer relationships to drive more revenue at higher profit margins. An entirely possible goal to meet – with the right technology. Without it, it just won’t happen, or at least it won’t happen fast enough to make a difference. CEO’s and COO’s are tasked with embarking on their own journey of discovery to move beyond the parameters of resource allocations, and into one that is driven by process and predictive insight. The Cloud will help to remove the complexity of technology and enable business leaders to think more in terms of strategic output than servers and desktop systems.
As the business and IT move closer together we can expect to see new terms such as process oriented clouds, intelligent clouds, functional clouds etc beginning to emerge as bundling of computing capability, application suites and data needs are created. This will emulate the industry vertical bundling of software packages to provide complete plug and play solutions, but in the cloud it will be play and pay.
I for one, who has worked alone in the trench between IT and the business for many years am looking forward to the new B-IT collaborative model – where sales, distribution, innovation, financial, logistics, talent and manufacturing processes will be based on infrastructure which exists in a virtual context. Where applications and data will connect to others through heterogeneous structured and non-structured environments.
Cloud provides an ideal point of connection between both individuals and processes that require rapid online connections to other processes without invasive techniques. It is a place where business people can iteratively describe what issues they are tackling and speak a common language with their IT counterparts in a setting which can deliver the constant innovation, without having to wait for complex and slow development techniques.
The above is an excerpt from my upcoming book “Getting to Cloud – The Essential Guide to Decisions About Cloud Computing” – by Gail La Grouw