BUSINESS INTELLIGENCE: SHIFTING FROM REACTIVE TO PROACTIVE

Everything that has been called the IT Revolution these last 20 years — I am sorry to tell you . . . that was just the warm – up act . . . that was the forging, sharpening and distribution of the tools of collaboration. We find ourselves at the end of the beginning. What you are now about to see is the REAL IT revolution! — CEO of  a major high – tech company.

By Dr. Kellen Kiambati

The explosion of business intelligence is changing the way companies operate on a day – to – day basis. Traditional approaches that forecast yearly demand and then plan production to balance inventories and budgets are being replaced by real – time sensors that continuously assess customers’ needs and fill them  at revolutionary speeds with a myriad of customized products and services. To quickly acquire the technological sophistication needed to operate at this level, many large companies that historically tried to do it all are now forming strategic partnerships or acquiring companies with complementary assets and competencies.

Top down
Over the last half century, many large industrial companies flourished within the make – and – sell paradigm. They were characterized by complex, top – down management structures with highly detailed annual budgeting systems and well – defined operational functions at every level. This structure enabled their factories to produce a variety of complex products, such as automobiles, computers, ships, and airplanes, on a massive scale with great efficiency. With such a history of success, it is difficult to look at a completely different model based on determining what the customer wants and then producing it. In the last decade, the leading information technology (IT) firms have been mostly  experiencing  success in the new sense – and – respond model. Software, partially due to its virtual nature, is being developed with higher degrees of functionality and complexity in shorter and shorter time frames. The nonphysical nature of software products has also enabled developers to go one step further than “sense and respond.” They have engaged virtual communities of users to literally participate in development. This preemptive feedback loop ensures that the end customer is getting what he or she wants.

Knowledge economy
The old foundations of success are gone. Throughout human history, the source of success has been controlling natural resources — land, gold, oil. Suddenly the answer is ‘knowledge.’ The king of the knowledge economy, Bill Gates, owns no land, no gold or oil,no industrial process. How does one use knowledge to build wealth? How do societies have to be reorganized to generate a wealth – enhancing knowledge environment? How do they incubate the entrepreneurs necessary to bring about change and create wealth? What skills are needed?The knowledge – based economy is asking new questions, giving new answers, and developing new rules for success.As companies build their infrastructure and move into more sophisticated levels of business intelligence, certain human and organizational competencies are critical to success. These core competencies are discussed within the context of the information evolution model described by Davis, Miller, and Russell in information revolution. The model is based on the belief that a company’s success is a function of its infrastructure,process, people, and culture. The model presents a phased maturation of an organization through evolutionary stages.
To unveil the subtleties of the information evolution model, each level is examined over four major dimensions:
1. Infrastructure. This dimension addresses all the hardware, software and networking tools and technologies that handle every phase of the information process. The assessment, purchase, implementation and use of these components should be part of the overall business intelligence strategy. Therefore, a high level of clarity is required in the communication of needs and intentions to ensure that all decisions are optimal.
2. Knowledge process. This dimension focuses on the strategic as well as specific uses of the information infrastructure. Included are the policies, best practices, standards, and governance of all aspects of the information cycle. Also included are performance metrics, reward system and the commitment to strategic use of information at the highest levels. For this dimension to operate smoothly,a cohesive, collaborative leadership team is essential.
3. Human capital.  This dimension speaks directly to the success factors, as it is defined by the level of competency of every employee along with the hiring practices and the training and evaluation systems established by the company.
4. Culture. Within the information evolution model, this dimension is defined as the “organizational and human influences on information flow — the moral, social, and behavioural norms of corporate culture (as evidenced by the attitudes, belief  and priorities of its members) related to information as a long – term strategic asset.” When considering culture in terms of the success factors,this dimension is broadened to include organizational and human influences on every activity within the company.
The five levels of the information evolution model are hierarchical and reflect aspects of maturity across the four dimensions. Generally, companies fluctuate within different levels across the four dimensions during this evolution. The five levels of the information evolution model are operational, consolidation, integration, optimization, and innovation.

The operational enterprise
Most small businesses, start -ups, and silo – based companies operate at this level. The knowledge process is uniquely individual, which allows “ information mavericks ” to emerge.With a focus on day – to – day tactics, information access, analysis, and implementation are not standardized. Information management positions are structured to compete. Job security is gained through individual control.
Level 1 people (human capital) tend to thrive in unstructured environments.The information technicians are often self – motivated risk takers.They tend to strive for differentiation and recognition, which might serve a company that is still operating at an entrepreneurial level. However,they resist change and loss of control, which may inhibit maturing to thenext level.
Level 1 culture is well suited for charismatic leaders and self – starters.There is little consistency in how information is shared or used. With the right talent, a business can thrive at this level up to a certain point or in a limited market. As it tries to grow, the individual focus can lead to inefficiencies, redundancies, and errors. Since there is little intention to coordinate silos, alignment does not play an important role. Skills in social interaction and teamwork are of little value.

The Consolidated Enterprise
Organizations at this level have integrated information management within a silo or department. Typically, knowledge processes are optimized to support operations within the functional areas.
Level 2 infrastructure features all data management hardware and software that is designed to optimize information and decision processes at a departmental level. Departmental discrepancies and duplication of effort are common pitfalls.
Level 2 knowledge process supports decision-making at the department level. This may result in inconsistencies and suboptimal outcomes on an enterprise level.
Level 2 human capital and culture dimensions are not managed with an intention towards integration. Teamwork may be encouraged in small,homogenous areas, but strategic and interdepartmental collaborative.

The Integrated Enterprise
An enterprise – wide approach to data management and decision making characterizes organizations at this level. Integrated knowledge systems generate value by standardizing processes that promote coordinated marketing efforts. Resources are mobilized around market and customer relationships that optimize long – term value.
Level 3 infrastructure features a seamless, enterprise – wide system of hardware, software, and networking that supports data reporting, analysis and auditing while delivering a single version of the truth.
Level 3 knowledge process enables the company to optimize reporting and analysis to meet enterprise – wide goals and objectives. The focus shifts from a product focus to a customer or market focus with emphasis on relationships and long – term value. All information access and quality is aligned and standardized. Performance management is automated. This level of interdepartmental cooperation requires highly developed communication and collaboration skills.
Level 3 people are able to balance their departmental goals with those of the enterprise. Their holistic view and emotional intelligence allows them to contribute to and champion the efforts of enterprise.
Level 3 culture views business intelligence as a corporate asset and essential strategy. Training and organizational development focus on the importance of enterprise – wide access and intelligent use of information.

The adaptive, innovating enterprise
Innovation is the distinguishing competency of organizations at this level. These organizations are continuously seeking ways to reinvent and transform their value proposition. This proactive model, based on business intelligence and creative energy, allows organizations to stay continuously competitive.
Level 5 infrastructure is designed to be “intelligence architecture”with the ability to integrate and expand quickly and seamlessly based on the needs of the organization. An advanced combination of analytic tools allows new ideas to be tested and perfected in a virtual environment, thus reducing the time to market. Innovation is systematically fostered andsupported through information access and sharing.
Level 5 knowledge process is designed to encourage innovation at the highest levels. Extensive analytics are used to model the future while minimizing risk. As a way of stimulating new ideas, collaboration is encouraged and facilitated on an enterprise – wide basis.
Level 5 people are whole – brain thinkers. With a keen eye for the bottom line (left brain), they are proactive,creative thinkers (right brain). They thrive on juggling many roles and activities. They actually enjoy change and get bored if things start to feel stagnant. They know that their competitors are able to reach Level 4 with cutting – edge technology. But at Level 5, they can always outpace their competitors by continuing to innovate.
Level 5 culture embraces whole – brain thinking. All ideas, even the most absurd, are  encouraged. Processes are designed to facilitate creativity and support an intuitive flow of ideas. Constant change is the norm.