From Operational Business Intelligence to Competing on Decisions
by James Taylor
Originally published July 29, 2008
There is a great deal of discussion about operational business intelligence (BI) these days. Operational BI, with its focus on day-to-day operations, has some key differences from what you might call “traditional” or perhaps “tactical” BI. For one thing, operational BI requires low-latency or real-time data to be integrated with historical data. For another, it typically requires integration with operational systems or business processes. This makes it quite a challenge for those accustomed to traditional BI implementations. To make operational BI work, you must get into the details of operational processes and systems, something not usually required for business intelligence. Users are also different, with lower-level managers and analysts having a larger role. Finally, automation (both of generating reports and dashboards and of acting on them) is more widespread.
Where operational BI is not different is in its general mind-set – that the purpose of business intelligence is to turn information into actionable insight and deliver it to people so that they can act more appropriately. Operational BI might be part and parcel of operational processes and systems, but the focus is still on changing how people make decisions in that operational context. Adopting operational BI will help bring the data you have collected, cleaned, aggregated and integrated to more people. It will also change your focus from overall results and summaries to transactions. But there is more to do.
Competing on Decisions is the name of my BeyeNETWORK.com channel for a reason. The behavior of your customers, partners, suppliers and employees is central to your success. They react to the actions you take, and those actions are determined by choices made by you, your staff and your systems. Making these choices requires decisions, and so decisions make the difference. In an always-on, multi-channel world, these decisions must increasingly be made by information systems and not by people. Even when people are available, the growth of outsourcing and complex distribution and delivery networks means that we need more control over how those people make decisions. Recognizing this and using this recognition to compete more effectively is what we mean by competing on decisions.
Competing on decisions requires a number of changes to the way you think about business intelligence and about data more generally. It means going beyond operational BI and into what is called enterprise decision management or EDM. Enterprise decision management is an approach for automating and improving high-volume operational decisions. Focusing on operational decisions, it develops decision services using business rules to automate those decisions, adds analytic insight to these services using predictive analytics and allows for the ongoing improvements of decision-making through adaptive control and optimization. The five areas of change are:
To compete on decisions, then, we need to do more than adopt operational BI. We must build on this new operational focus to become even more decision-centric, more focused on the details of these small, high-volume decisions. Adopting EDM is what it takes.
In my next article, I will discuss how to go about moving to and beyond operational BI.
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