PROFITABLE GROWTH and structured BUSINESS INTELLIGENCE – reflections on evolution stages
Businesses (having evolved or not very evolved management systems) generate quite a lot of data.
My consulting experience consistently proved that the USE of this DATA has always been one of the major factors that affects the BOTTOM LINE.
From the evolution point of view
FIRST STAGE: For lots of businesses, DATA is an UNKNOWN UNKNOWN. Meaning, they don’t really know that their systems have large amounts of data on daily basis that they can collect, organize, analyze, interpret and become able to make INTELLIGENT decisions for their growth and profitable continuity. To list a few outcomes, these businesses generally:
- are unaware of the true capability and capacity of their PROCESSES and PEOPLE,
- do not bother to collect/save important process data,
- cannot have and do not have a long term growth plan,
- have no structured performance management system,
- have monitoring and control that is instantaneous and impulsive,
- have lots of surprises,
- have an organization-wide culture of blaming whenever a new surprise surfaces,
- have much of coercion and almost no buy-in for training and development
SECOND STAGE: For businesses at this stage DATA is an UNKNOWN KNOWN. By virtue of some quality certifications (eg, ISO 9001), these businesses do collect data but unfortunately, that data remains a useless dump of garbage that is disposed off according to a scheduled ‘Disposal’ plan. The collected data is not used in a way that can aid business management decisions.
THIRD STAGE: Next is the level where DATA is a KNOWN KNOWN. The management systems of such organizations collect and organize data to generate INFORMATION that has an organization-wide circulation and is presented and used for operational purposes. There are stages of evolution in this 3rd stage where organizations are just starting to realize the importance of data and those who are able to create a dynamic connection between DATA and BUSINESS PERFORMANCE.
Since, the use of process data is only possible when a system performs with some amount of stability for a reasonable period of time, so, in such businesses the first significant outcome is the immediate exposure of the areas where the business processes are not stable and non-standardized. This is the start of IMPROVEMENT journey.
FOURTH STAGE: The highest level of evolution is found in businesses for which the DATA is a KNOWN UNKNOWN. Meaning, from their experience of the use of data and its dynamic connection with business performance, they develop an intelligence to consistently refine their collection, organization, analysis and interpretation. And, not only make intelligent business decisions but also decide what DATA to collect and what not to, which data provides intelligence and insights about which business performance indicators and so on.
The journey from Data to Intelligence starts when the raw data starts to connect with each other and takes a shape and become presentable. So, at the information level, different data sets start to interact with each other.
The next stage is when this information starts interacting with the business performance objectives. So at this level, existence of clearly defined Business Performance Indicators (BPIs) is essential for this interaction to happen and result into a ‘Business Intelligence’ that tells the story about how a business is performing. Knowing the starting point or the current state is important to find a ‘way’ to the ‘destination’. It is also important to monitor the effectiveness of all the activities going on under the ‘title’ of improvement.