Most enterprises are faced with demands and opportunities for deploying the latest smart technologies and social networking tools, both internally and externally. But fancy software won't achieve its potential for business benefit without an architectural framework. Proper and coordinated use of these tools can result in significant improvements in the ability of the organization to detect and interpret changes in the environment, to respond decisively and appropriately to these signals, and learn rapidly from new experience. These are all signs of organizational intelligence. The challenge is to deploy innovative technologies and working practices that will enhance the collective intelligence of the enterprise.
The collective intelligence of an organization can be improved by appropriate technologies used in appropriate ways to tackle the inherent complexity of modern business in a dynamic environment. These technologies include business intelligence, event processing, knowledge management, process improvement and social networking. Most large organizations use these technologies, but fail to join them together or use them effectively, so there is a huge missed opportunity here for IT. Ultimately, the value that IT can bring to business is not just from automating clerical tasks and enabling large-scale global operational processes, but from enabling and supporting management processes such as coordination and innovation. Organizational intelligence is a critical measure of the management capacity of an organization in a demanding competitive environment, and IT has a key role in improving organizational intelligence. This talk will provide a roadmap for IT to make a strong contribution to business viability and survival.
http://hci.stanford.edu/jheer/projects/enron/v1/http://www.stewwebb.com/bush_narcotics_money_laundry_funds_obama_mccain.htm“McKinsey … were there [for months] looking for people who had the talent to think outside the box. It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.”http://www.gladwell.com/2002/2002_07_22_a_talent.htm
We may differentiate customers (and their behaviour and intentions) according to a number of factors, with greater or lesser granularity. Each degree of differentiation increases the complexity of the process. Under the right conditions, increased differentiation may produce better outcomes for the organization and its customers. Under the wrong conditions, differentiation merely adds complication, increases cost and risk, and may produce worse outcomes.There are arbitrarily many degrees of differentiation – these are just typical points on the curve.
Effective differentiation is a function of the intelligence embedded within the customer management capability. The greater the “quantity” of intelligence, the greater the capacity to differentiate effectively.For the sake of analysis , we may regard “Intelligence” and “Operation” as separate sub-capabilities of Customer Management.We can then identify the signals that pass between “Intelligence” and “Operation” , and the attenuation and amplification mechanisms that govern these signals.
What are the events and information flows that help to join up the retail operation as a whole?Where is the strategic knowledge of the enterprise located, and how is it continuously development and effectively used? What are the mechanisms to support innovation and organizational learning?
Operating Model Quadrants (Adapted by Clive Finkelstein from Figure 2.3 of “Enterprise Architecture as Strategy”)http://esvc000904.wic047u.server-web.com/ten/ten38.htmhttp://rvsoapbox.blogspot.com/2010/05/differentiation-and-integration.html
There are actually three contrasting agendas, but we’ll save the third agenda until later in the presentation. It is not clear to what extent the third agenda still counts as EA.1. simplify around single (simple) business model: single definition of 'market' qua single-sided market.2. differentiate business models and integrate to span their differences: multiple definitions of 'market' qua single-sided markets.3. differentiate business models AND differentiate the modes of integration: multiple 'markets' within multiple contexts-of-use qua multi-sided markets.(PJB)
Appreciating how information supports business objectives, and identifying where improved information (e.g. greater speed, greater accuracy or granularity) could improve business outcomes (e.g. through improved decision-making or better-targeted processes).Identifying the feedback loops that refine key processes and policies based on results, and making these loops faster and more effective,Shaping the organization (using RAEW) to facilitate decision-making, policy-making and organizational learning.
Notes for Enterprise Architects Richard Veryard, Open Group Conference London May2011 Organizational Intelligence
Abstract Twitter tag #orgintelligence Organizational intelligence is a critical measure of the management capacity of an organization in a demanding competitive environment. Organizational intelligence depends on many things, including appropriate organization structure and culture appropriate management practices good use of appropriate technologies coordinated action and innovation Critical contribution from enterprise architecture
Requirements for Org Intelligence Management practices People Organization structures Business Technology adoption and use Platform architectures Software & Services Knowledge base Org Intelligence Enterprise Architecture
Towards greater Org Intelligence Edge-driven organization Knowledge-based strategy Self-organizing teams Continuous experimentation, innovation and learning Real-time business intelligence Event-driven architectures Social networking / Enterprise 2.0 Distributed decision-support Network-centric systems Org and management Technologies
What is organizational intelligence? Ignore important signals from the environment Cannot discriminate between the important and the trivial Respond incoherently to crisis Oscillate wildly between extremes Fail to learn from mistakes Innovate slowly and painfully Detect and interpret weak signals of possible significance Mobilize coherent response to complex opportunity Rational approach to risk and uncertainty High-quality decision-making throughout the organization Collective learning and innovation 5 Stupid Organizations … Intelligent Organizations …
Org intelligence as whole-system property Very clever people, who don’t talk to each other Very sophisticated technology, poorly wired together Patterns of interference (2+2=3) Good people, who work well together Good technology, used well Patterns of collaboration (2+2=5) 6 Stupid organizations may contain Intelligent orgs may contain
Org intelligence as sociotechnical property How do we know what is going on? How do we understand what is going on? How do we act upon what is going on? How do we remember things? How do we communicate things? How do we learn from experience? All of these capabilities are both technical (dependent upon an array of devices) and social (dependent on other people).
9 “Perhaps you have already seen memos from me or others here about the importance of the Internet. I have gone through several stages of increasing my view of its importance.” “Exponential improvements in communications networks … the Internet is at the forefront of this” “Now I assign the Internet the highest level of importance.” Microsoft Example Bill Gates “Tidal Wave” May 1995
Microsoft Example Review of history Weak signals becoming stronger Gradual shift of opinion Pivotal shift in direction Evolving strategies Collective responsibility Any large organization faces a huge number of challenges, both large and small. Success of organization depends on achieving a good enough response to a good number of these. Key Points General Implications
Some organizations don’t need much intelligence Too much intelligence may be “overkill” or “overhead” Organizations can survive by following simple predictable patterns Simple predictable patterns create vulnerability Intelligence is vital to survival 11 In simple stable environment … In complex dynamic environment …
How much intelligence do we need? Multi-Sided Markets Demand Volatility Globalization Falling rate of profit (?) “Fly-By-Wire” Business “Requisite Variety” Business Complexity Management Capability
13 Information Gathering Decision & Policy WIGO (what is going on) Learning& Development Knowledge& Memory Simple intelligence loop
Information Gathering Decision & Policy WIGO (what is going on) Learning& Development Knowledge& Memory Complex intelligence loop 14 Sense-Making Communication & Collaboration
Organizational intelligence requires six sociotechnical capabilities Information Gathering How well does the organization collect and process information about itself and its environment? Sense-Making How well does the organization interpret and understand itself and its environment? Decision-Making & Policy How effective are the (collective) processes of thinking, decisions, policy and action? Knowledge & Memory How does the organization retain experience in a useful and accessible form? Learning & Development How does the organization develop and improve its knowledge, capabilities and processes? Communication & Collaboration How do people and groups exchange information and knowledge? How do they share ideas and meanings? 15
Intelligence manifests itself in operational differentiation 16 Degrees of Differentiation Retail Example Customer Management Zero variation. No differentiation between customers. One size fits all. Fixed segmentation. The retailer identifies a number of (fixed ) market segments, and assigns each customer to the appropriate segment. Dynamic deconstruction . Differentiation based on the detailed actions and inferred intentions and context of customers. Customer Purchase Segment Context
Progressive Differentiation Anonymous Customer Customer Identified at Checkout (Loyalty Card) Customer Behaviour Tracked Inside Store (RFID) ? Retail Example Your Industry 17
Capability Intelligence Focus on the most relevant differentiators. Sufficient range of responses to differentiators. Coordination between variety of perceived differentiation and variety of response. Feedback loops to improve relevance and accuracy of differentiation. Feedback loops to refine responses. Progressive elimination of unnecessary or irrelevant complication, along with exploration of new opportunities Success Factors of Effective Differentiation Customer Management 18 customer intelligence attenuation amplification customer operation
Enterprise Architecture as Strategy 1 2 ? Low differentiation High differentiation
Two Contrasting Agendas for EA Business is simple Systems are complicated and inflexible Software applications Human activity systems Therefore simplify and unify the systems to align with the business Business is complex Systems are complicated and inflexible Therefore differentiate and integrate systems to help manage complexity. Simplify and Unify Differentiate and Integrate
Business Information Requirements How information supports business objectives How the organization uses information for decision-making, policy-making and organizational learning. Could improved information improve business outcomes? Could improved feedback loops help to refine key processes and policies? Is the organization able to gather and use relevant information effectively?
IT = information AND technology Advanced technologies, tools and platforms for information processing and communication Effective use of information and communication across enterprise systems Not Only But Also