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OrgIntelligence Presentation at Open Group Conference, May 10th

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My presentation at the Open Group conference, London May 2011

My presentation at the Open Group conference, London May 2011

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  • 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.
  • The introduction of the loyalty card represented a radical strategic shift for the large retail chains. Stores now had a formal basis for recognizing a customer as the same again. They can identify customers, and collect and analyze data about the behavior of specific customers. And they can use this analysis to differentiate the response to different customers. For example, different customers may receive different special offers. Amazon is of course well-known for its pioneering work in providing targeted information and deals based on a customer’s browsing and buying history, and creating new forms of associative information which may be reflected back to the customer.Obviously if the retailer can identify the customer as she enters the store, then this differentiation can be done as the customer browses, rather than only when the customer comes to pay. This is relatively easy to implement with online shopping (for example through the use of cookies); and there are various mechanisms that might achieve the same result in a physical store – perhaps face-recognition software in the store camera, or loyalty cards with RFID chips – if the obvious privacy concerns can be allayed.And if there are RFID chips on the goods and RFID scanners on the shelves, then the customer can be presented with information based on the stuff that is already in the shopping basket. Again this capability is very easy to implement for online shopping, and this stimulates retailers to build an equivalent capability for physical shopping. (This is an instance of an increasingly common generalization pattern: take a simple innovation from one channel and look for ways of implementing it in other channels. We then need to define a general structure for the data from different but equivalent sources, and render the data through a common service interface, to enable aggregation and comparison of data across channels.)
  • 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.
  • Transcript

    • 1. Notes for Enterprise Architects
      Richard Veryard, Open Group Conference London May2011
      Organizational Intelligence
    • 2. 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
    • 3. Requirements for Org Intelligence
      Management practices
      People
      Organization structures
      Business
      Technology adoption and use
      Platform architectures
      Software & Services
      Knowledge base
      Org Intelligence
      Enterprise Architecture
    • 4. 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
    • 5. 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 …
    • 6. 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
    • 7. 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).
    • 8. Enron and the Myth of Talent
    • 9. 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
    • 10. 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
    • 11. 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 …
    • 12. 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. 13
      Information
      Gathering
      Decision
      & Policy
      WIGO
      (what is going on)
      Learning& Development
      Knowledge& Memory
      Simple intelligence loop
    • 14. Information
      Gathering
      Decision
      & Policy
      WIGO
      (what is going on)
      Learning& Development
      Knowledge& Memory
      Complex intelligence loop
      14
      Sense-Making
      Communication & Collaboration
    • 15. 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
    • 16. 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
    • 17. Progressive Differentiation
      Anonymous Customer
      Customer Identified at Checkout (Loyalty Card)
      Customer Behaviour Tracked Inside Store (RFID)
      ?
      Retail Example
      Your Industry
      17
    • 18. 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
    • 19. CapabilityCoordination
      intelligence coordination
      19
      customer
      intelligence
      product
      intelligence
      store
      intelligence
      staffing
      intelligence
      amplification
      amplification
      amplification
      amplification
      attenuation
      attenuation
      attenuation
      attenuation
      customer operation
      product operation
      store operation
      staffing operation
      operation coordination
    • 20. Enterprise Architecture as Strategy
      1
      2
      ?
      Low differentiation
      High differentiation
    • 21. 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
    • 22. 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?
    • 23. 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
    • 24. Are your enterprise models complete?
    • 25. … and more
      One-Day EA Workshop May 29th (Unicom)
      One-Day Org Intelligence Workshop (Unicom)
      OrgIntelligence.BlogSpot.com
      Future Events
      Other Material and Links