Building the Smart Business

Originally published 23 November 2004

A smart business exploits information technology to seamlessly connect people to the business processes and information they need to do their jobs, and make informed and timely decisions. The objective of this newsletter is to help you exploit business and data integration technologies to build and support a smart business. In this first newsletter, I explain the key components that support smart business operations.

Business Processes

Business processes automate core business tasks. These tasks may involve business transaction processes for managing day-to-day business operations, business intelligence processes for analyzing and optimizing business operations, and business collaboration processes that allow business users to communicate and share information about business operations. When combined, these processes enable business users to run, optimize and communicate about all aspects of business operations (See Figure 1).

Figure 1: Connecting people, processes and information

BusinessIntelligence,Connectingpeople,processesandinformation.

Business Transaction Processes

Business transaction (BTx) processes run applications that support day-to-day business activities such as receiving customer orders, managing inventory, shipping products, billing customers, etc. A record of the data associated with this processing is stored in transaction data files and databases.

During business transaction processing, transaction master data about customers, suppliers, products, etc., often becomes scattered across multiple systems. There is a need in organizations to consolidate and coordinate this master data so that it can be used by other business processes to present a single view of the master data to business users. A single view of customer data for managing and supporting customer relationships is an example of the use of integrated master data.

Business Intelligence Processes

Business intelligence processes monitor and analyze business transaction processes to ensure that they are optimized to meet the business goals of the organization. These goals may be operational goals that affect daily business operations, tactical goals that involve short-term programs such as marketing campaigns, or strategic goals that entail long-term objectives like increasing revenues and reducing costs.

To date, most Business Intelligence processes have focused on reporting and analyzing business operations, i.e., measuring business performance. The direction of the industry is toward managing business performance by using Business Intelligence to align business operations with the tactical and strategic goals of the organization. This is achieved by extracting transaction data, and integrating it in a data warehouse for processing by Business Intelligence performance management applications. These Business Intelligence applications convert the integrated, but raw, warehouse data into actionable business information that shows how actual business performance compares with business goals and forecasts.

Business users employ their business expertise to evaluate the actionable business information produced by Business Intelligence performance management applications. Applying business expertise to business information creates business knowledge. This knowledge can be used to determine what actions (if any) need to be taken to align business activities with business goals, and what business processes need to be modified to support those actions. This creates a so-called closed-loop decision-making and action-taking system for managing and optimizing business operations.

An efficient and integrated closed-loop system must enable a business to work smarter by closely aligning business performance to tactical and strategic business goals. This creates a feedback loop where positive activities are recognized and encouraged, while value-detracting activities are either improved or eliminated.

The need for organizations to be more agile, however, requires that this closed-loop process also is employed to optimize day-to-day business activities. At present, most data warehouses do not provide the near real-time or low-latency transaction data required for such processing. The solution is to use Business Intelligence applications against live transaction data, or to capture transaction data in-flight, and integrate it into a low-latency operational data store (ODS).

Business Collaboration Processes

Business collaboration processes enable business users to communicate and share information about BTx and Business Intelligence processes, and to make decisions and take actions to optimize and improve business activities. Business collaboration processes are essential to a closed-loop system. At present, most closed-loop processing is manual in that business users employ collaborative services to communicate and share information via e-mail, instant messaging and Web conferences. In some organizations, however, manual business collaboration processes are being automated to improve the speed of the decision-making process. This is being done by encapsulating business usersí expertise in a set of business rules, which are then used by a rules engine to automate action taking. Not all business processes lend themselves to automation, but automating activities such as granting loans, issuing credit cards, and processing claims for low-risk clients and customers can have a significant competitive advantage.

Business Information

Business transaction, Business Intelligence and business collaboration processes create a wide range of different types of structured and unstructured business information. Business transaction processes store transaction data in data files and databases, whereas Business Intelligence processes employ data warehouses and a low-latency ODS to handle integrated data transaction data and analysis results. Business collaboration processes, on the other hand, encapsulate communications and business knowledge generated by business users in documents, spreadsheets, e-mails, etc. These various types of information are typically managed by a variety of file and database systems that are dispersed throughout the organization.

Business decisions may take some time to make, and may involve actions that cycle round the closed-loop process several times. There is a need, therefore, for business users to be able to have a single tool that enables them to access and track various types of business information over a period of time, and that also allows them to share business knowledge and collaborate with other users inside or outside of the organization. This is important not only for managing the business effectively, but also to be able to respond rapidly to legislative reporting requirements. Such a tool is a called an enterprise portal.

Business Users

To make rapid informed decisions, business users need access to personalized business content from any place at any time, using both office-based and mobile devices. An enterprise portal satisfies this need by providing business users with an integrated and secure Web interface to enterprise-wide business content, including BTx and Business Intelligence applications, structured and unstructured data, etc.

An enterprise portal may include a content management system (or interfaces to external content management systems) for organizing and controlling shared information that is viewed through the portal. Many enterprise portals also provide collaboration facilities that allow enterprise portal users to communicate with each other and share and exchange information.

Portals provide secure and single sign-on facilities that enable them to be employed both inside and outside of an organization. Internal portals are frequently used to improve the usability of corporate intranets by personalizing information and increasing information self-service. External portals are used to enable the interchange of business content with customers, suppliers and other key business partners.

An enterprise portal is destined to become the business usersí desktop by providing all of the business content they require to do their jobs. A enterprise portal solves the problem of locating information because it personalizes and secures business content to match each userís role in the organization, making it much easier to find and access information. An enterprise portal also solves the issue of relating different types of business information (business transaction data, Business Intelligence, documents and reports, e-mail, etc.) since it employs a business taxonomy to provide an integrated view of the many different types of business information that exist in an organization.

The above article outlines why business processes, business information and business users need to be integrated to support a smart and agile business organization. In reality, organizations today do not have the integrated business decision-making and action-taking environment outlined here. Instead, most of them have deployed a variety of non-integrated information and collaboration technologies and products that cannot support the needs of a smart and agile business. Next time, I will present an integrated technology framework that can be used to help solve this problem.

SOURCE: Building the Smart Business

  • Colin WhiteColin White

    Colin White is the founder of BI Research and president of DataBase Associates Inc. As an analyst, educator and writer, he is well known for his in-depth knowledge of data management, information integration, and business intelligence technologies and how they can be used for building the smart and agile business. With many years of IT experience, he has consulted for dozens of companies throughout the world and is a frequent speaker at leading IT events. Colin has written numerous articles and papers on deploying new and evolving information technologies for business benefit and is a regular contributor to several leading print- and web-based industry journals. For ten years he was the conference chair of the Shared Insights Portals, Content Management, and Collaboration conference. He was also the conference director of the DB/EXPO trade show and conference.

    Editor's Note: More articles and resources†are available in Colin's BeyeNETWORK Expert Channel. Be sure to visit today!

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