Course Name: Business Intelligence
Year: 2009
A View over the Horizon
24th Meeting
Source of this Material
(1).
Williams, Steve & Williams, Nancy (2007). The Profit
Impact of Business Intelligence. Chapter 9
Bina Nusantara University
3
BI Moves into The Mainstream
There are more and more documented cases of BI bottom-line successes and
these successes are increasingly being published in business publications. In
addition, there is more of a focus on business performance measurement,
including the popularization of Balanced Scorecards, dashboards, and the use
of key process indicators (KPIs) in the marketplace.
Bina Nusantara University
4
Decision Process Engineering: Equipping Knowledge Workers
with Information and Instituting Standards and Accountability
In many cases, the information needed to support strategic and tactical
decision making by knowledge workers has been of low quality or unavailable.
Because strategic and tactical decision making requires historical views and
analyzing trends, as well as seeing views of the business that crossed
functional areas of lines of business, before data warehousing this information
was often unavailable.
In many organizations, even when the information is available to improve upon
knowledge worker performance and to hold knowledge workers accountable for
their decisions, ad hoc approaches still prevail.
Effectively, by blending BI with “decision process engineering”, we can
reengineer aspects of knowledge work that can have a substantial profit
impact. We can think endeavor as expanding the number of business situations
within which structured, fact-based decision making can be brought to bear.
Technically, decision process engineering employs BI, business process
modeling, business rules, and workflow software.
Bina Nusantara University
5
Decision Process Engineering: Equipping Knowledge Workers
with Information and Instituting Standards and Accountability
(cont…)
By use of the same concepts and technologies, companies can re-engineer
decision processes that occur within the context of management processes,
revenue-generating processes, and operating processes. Table 24-1 is
designed to illustrate the concept of decision process engineering.
Bina Nusantara University
6
Decision Process Engineering: Equipping Knowledge Workers
with Information and Instituting Standards and Accountability
Table 24-1
(cont…)
Bina Nusantara University
7
Decision Process Engineering: Equipping Knowledge Workers
with Information and Instituting Standards and Accountability
(cont…)
Bina Nusantara University
8
Decision Process Engineering: Equipping Knowledge Workers
with Information and Instituting Standards and Accountability
(cont…)
Bina Nusantara University
9
Re-engineering Knowledge Work: Releasing
The Power of BI
BI marries business information, business analysis, and fact-based structured
decision making, all of which have the potential to dramatically improve
knowledge worker productivity. To understand the magnitude of the challenge,
let us examine some of the tasks that are involved.
• Creating a Vision of How Knowledge Work that Impacts Profits Should
Be Performed
To re-engineer knowledge work and knowledge worker productivity, companies will
need to develop a vision of how knowledge work should be done, which presupposes
a good understanding of the current state and an informed sense of the possible and
desirable future state.
•
Making Specific Decisions About Management and Analytical
Frameworks for Core Business Processes That Impact Profits
To re-engineer knowledge work and knowledge worker productivity, companies must
understand what the actual state of the art is for a given core business process.
Company management must sift through the information and make choices about
Bina Nusantara University
10
Re-engineering Knowledge Work: Releasing
The Power of BI (cont…)
how they want their knowledge workers to think about and analyze business
information.
•
Determining What Business Information is Needed to Apply the
Selected Frameworks
The task of re-engineering knowledge work by unleashing the power of BI may
require changes to existing management and analytical frameworks. In either case,
the business information required for re-engineering knowledge work is a function of
the management and analytical frameworks used or to be used by a given company.
•
Determining How Key Decisions Should Be Made and By Whom
From a BI perspective, the key is to design BI that meets the needs of different
decision styles. Once that has been done, the decision process can be engineered
such that it enhances knowledge worker productivity and contributes to more
effective decisions, that is, decisions that have a positive profit impact.
•
Infusing Accountability and Process Metrics into Business Processes
and Decision Processes
Bina Nusantara University
11
Re-engineering Knowledge Work: Releasing
The Power of BI (cont…)
Leverage BPM technologies, coupled with BI, to create systematic approaches to
core management, revenue generation, and operating processes. This in turn will
allow greater transparency into key elements of business process and decision
process performance.
•
Investing in BI and Business Process Management Competencies,
Methods, and Tools
To gain the full benefits of increased knowledge worker productivity, companies will
need to invest in BI and BPM competencies, methods, and tools.
• Managing The Changes Required to Redirect Knowledge Work
from an Artisan Model to a Systems Model
The combination of BI and business performance management can afford knowledge
workers relief from the drudgework of basic data accumulation and manipulation and
instead offer opportunities to have a far greater impact of company profitability. To
reach this point, companies will have to manage the change from the artisan model to
a systems model.
Bina Nusantara University
12
Closing The Loop: Optimizing and Integrating Strategic,
Tactical, and Operational Business Performance
Once optimal decisions and actions are taken by the knowledge worker to
optimize business performance, those decisions must be followed through
operationally to close the loop and achieve the potential that exist for
performance improvement.
By optimizing strategic and tactical decisions and actions and ensuring that
these decisions are operationalized, business can then measure the effect of
the decisions and actions that were enabled by BI. They can also hold all
employees, including knowledge workers, accountable for the decisions and
actions that result in business performance.
In addition to aligning, optimizing, and measuring business performance at the
strategic, tactical, and operational levels, we believe that there will be a
technical alignment and optimization of the system that are used to support this
new business environment.
Bina Nusantara University
13
Barriers to Realizing the Benefits of BI
The technologies, business process engineering competencies, and change
management techniques are in place, and we see no technical reason why BI
cannot be raised to the level where it is integral to how companies do business.
That being said, we believe there are identifiable barriers to getting there, no
least of which is lack of recognition of the profit and performance impacts of BI.
• Noise and Confusion in the Business Tools Environment
There is noise and confusion in the business tools environment, and that works
against more aggressive adoption of BI and against taking it to the higher level
presented by decision process engineering and re-engineering knowledge work.
•
Skepticism about Information Technology Value Propositions
Because major consulting companies in effect act as salespersons for enterprise
software vendors, executives and managers find it hard to turn to these same
consultants for independent, objective advice when it comes to IT, which exacerbates
their skepticism about IT value propositions. In this environment, BI is tarred with the
same brush.
Bina Nusantara University
14
Barriers to Realizing the Benefits of BI
•
Executive and Management Challenges Relative to IT
With pervasive cost competition in the global economy and the attendant downsizing,
surviving executives, and managers are left with significant bandwidth challenges
across the board, which often translates into not having time to really understand IT,
its value propositions, and its organizational implications.
•
Competition for Business and Information Technology Resources
Companies are so busy taking care of today’s customers that they have limited time
to help evolve the company toward a better way of doing business. This bandwidth
issue constrains organizational capacity for improvement.
•
Risk Aversion
It has been proven in a range of industries that IT innovation can lead to competitive
advantage and superior profits. With innovation, however, comes risk, and thus
executives and managers play it conservatively when it comes to IT. Realizing the full
profit and performance potential of BI entails risk-taking, and many executives and
managers are not prepared to place bets in an area within which they are
uncomfortable.
Bina Nusantara University
15
“The most important… contribution of management in the 20th century was the fifty-fold increase in the
productivity of the manual worker in manufacturing. The most important contribution management
needs to make in the 21st century is similarly to increase the productivity of knowledge work and
the knowledge worker. The most valuable assets of the 20th century company were its production
equipment. The most valuable asset of a 21st century institution… will be its knowledge workers
and their productivity.
“Knowledge worker productivity is the biggest of the 21st century management challenges. In the
developed countries, it is their first survival requirement. In no other way can the developed
countries hope to maintain themselves, let alone to maintain their leadership and their standards
of living.”
-Peter Drucker, Management Challenges for the 21st Century
End of Slide
Bina Nusantara University
16