Jack Welch, CEO of General Electric Co., and Lou Gerstner, chairman of the board at IBM Corp., probably have much in common, but one interesting parallel in particular comes through in their autobiographies. Welch in Straight From the Gut and Gerstner in Who Says Elephants Can't Dance? both say -- loosely paraphrased -- I wish I could have made the decisions I made faster. Speed has two components when it comes to decision-making. One is our ability to overcome the educated person's partial curse of "analysis paralysis." The second component is having the right information available to the right person at the right time so he or she can make the best decision. Microsoft (full disclosure: I work for Microsoft) calls this "organizational agility," but in my efforts to appear unbiased, I will just call it highly distributed business intelligence.
When it comes to business intelligence, corporations are coming to a fork in the information superhighway. After the euphoria of a few years ago, when the data a corporation could gather was potentially limitless (Hey, we can see every click that's happened on our website in the last hour!), we now face the tactical question of how to turn all that data into useful information. We also face the more strategic question of how we view information technology and empower quicker decision-making at all levels throughout the organization.
Before we go on, however, we need to know what type of organization you have. Here is a quick litmus test that will determine if your organization views technology as infrastructure or as the potential source of competitive advantage:
To whom does your CIO report?
The COO, president or CEO
If it is your CFO, you probably look at technology as infrastructure. If it is your COO, president or CEO, you probably look at technology as a source for competitive advantage.
The rest of this article is for companies that fit into the latter category, as American Airlines does. Its CIO Monte Ford was recently quoted in a magazine article: "Our most strategic information technology bet is the technology environment itself. Innovation is not an event, a tool or an application. It is an overall environment. Our goal is to exploit many different technologies to create a single, unified, easy-to-understand view of the company."
The reporting-to-the-CFO category requires persuasion of a different kind, and we will save that for another day.
In what follows, I will frequently mention the idea of all members of the organization having access to business intelligence tools. I recently heard a comment that in the past, 10 percent of all employees were analysts. Today, every employee is an analyst 10 percent of the time.
Traditional business intelligence and decision support systems are designed for you, the senior executive, to give you a high-level view of what is going on in the organization. This is helpful, but who else needs this information quickly? By the time the chain of command relays the information down with the appropriate instructions, the situation has changed or, in a worst-case scenario, you have missed an opportunity.
Furthermore, the preconfigured reports you traditionally receive may not provide the flexibility to do the vital drilling down to uncover potential gems of information about your business. Everyone needs to be able to ask question upon question and then discover the answer for himself. Most centralized, static systems do not allow you to do this.
Peter Drucker in Innovation and Entrepreneurship writes that "innovations based on a bright idea probably outnumber all other categories taken together. Seven or eight out of every ten patents belong here." Bright ideas come from having an intimate, dynamic relationship with the subject at hand. With a highly distributed business intelligence approach, you raise your odds of getting bright ideas anywhere in your organization that will create the innovations needed to sustain and grow your business.
Organizations such as Memorial Healthcare System of South Broward County, Fla., and Novopharm, a division of Teva Pharmaceuticals, are taking this different approach of using business intelligence at all levels (or, according to Microsoft lingo, "business intelligence for the masses"), and seeing measurable results.
In the complex world of healthcare, cost savings is the primary driver. Suffering from the challenge of multiple systems and an overarching view only to the top, Memorial Healthcare System has provided all of its 200 managers with real-time, user friendly access to more than 250 key performance indicators. The result? Every manager is equipped to make faster, more accurate decisions affecting health, safety and the bottom line, and the organization has realized a savings of 25,000 hours in management time.
Novopharm's sales representatives often visit eight to ten customers a day, and they rarely found time to ascertain why certain drugs were selling poorly or how sales in certain pharmacies were adding to the bottom line. If sales were down in a certain territory, it would be days before sales managers figured out whether the fault lay with a particular sales representative, a specific pharmacy or a back-ordered drug. To complicate matters further, employees could never be sure if the data they were looking at was complete and up to date.
Now access to Novopharm's mission-critical applications is provided at all levels, from central data sources across the enterprise to departmental servers and even to the laptops. Doug Morley, national sales manager for Novopharm, says, "If sales in a certain territory are down 10 percent, we can figure out the problem in minutes and take immediate action rather than waiting days for a written report and hoping the information is accurate." Best of all, Morley said, "Novopharm is continuing to gain market share."
By deciding what your key performance indicators are at each level of the organization and providing user-friendly access to the information, you enable your field managers and employees to make faster decisions about how to operate their units more effectively and thus more profitably.
John Parkinson, vice president and chief technology officer at Cap Gemini Ernst & Young, agrees. Asked where he is focusing his time, he has said: "Federated data management. That is, when you ask for a piece of information - -- about sales, inventories, projects -- you don't have to know in advance where the information is; it just shows up. Everything is working incrementally off of what's already there. The problem is complexity."
By giving your entire organization access to intuitive tools in a familiar environment, you can involve each of your employees in the critical decision-making process at a level that is appropriate and with the right amount of information to support the correct decision.
When you do this, you'll create a business that is agile and responsive. And after you retire and write your autobiography, you can say, "I made it possible for everyone in my company to make smart decisions even faster." -- Darwin (US)