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Enabling knowledge workers through IT: the key to driving innovation and agility

Dennis A Tebbutt, Information Age

15/12/2006 15:08:26

The challenge being thrown down by business units within organisations today is for information technology to have an impact on agility and speed, as well as support innovation in business. Before exploring business executives' views on IT and highlighting some projects that deliver on the unique demands of today's executives, let's review the challenge that operating in a mature IT industry presents us all.

First, the role of CIO is not getting any easier. In fact, it is far more difficult than it was 20 years ago. We have all the technology we need to run our businesses and, after Y2K, every board is aware and interested in the value that results from investments in technology. The chatter in the market has been there for some time now - what is the role and position of the CIO in the modern corporation?

I have a somewhat simple view. As business has evolved into the modern interconnected world in which we live the data held within and about the business is becoming the real vital asset. Those that own the keys to unlock its inherent knowledge are indeed the new kings of the management team. Later on we will examine this bold claim in the light of the opinions of our business unit colleagues. But, for now, what I have seen in my 30 years in the industry is that IT has done what we are very good at on the vendor side and that is making things go faster.

Yes, we have mechanised the transaction processes and also where there are transformation processes in business we have probably mechanised them also. The impact of mechanisation is interesting though, as it has changed the shape of the organisational structure in manpower terms. Today's organisations are made up of an increasing number of knowledge workers.

McKinsey Quarterly has produced several very interesting and challenging articles about knowledge workers and the pivotal roles they play within organisations. I believe the biggest challenge for the IT industry is making these knowledge workers more productive.

I have found throughout the industry sectors in which I move that knowledge workers are still spending between 40 and 80 per cent of their time collating and verifying data before they can actually do their jobs. Many are very proud of the spreadsheets and little systems they have for transforming and coordinating different data sources to accomplish their goal.

In every business, the annual report or CEO's address has two common factors - quality of service and competitiveness. The executive mindset is clearly focused around achieving these two primary goals for their businesses, with much chatter about the need to create "innovation" and "agility" to support them. Interestingly, "speed" is also often cited because that is what we are good at - making things go faster.

Of course the world today has introduced another dimension into our businesses that could drag us all to a resounding halt if we allow it to - compliance and governance - providing the capacity to understand what is being done by whom at any given time and why. Implementing this type of audit tracing can be very onerous and, frankly, who really knows what will be required in the future other than what we would like to have known about the past?

My focus here is agility and speed although I have also referred to the need for innovation. I am not suggesting that they are mutually exclusive or that you must have them combined although in IT I think they are more than likely to be combined for the highest impact on the business. That is one of the primary features of enterprise applications - new ways of doing things proven by many companies.

That's why they're so difficult to get implemented because the user generally doesn't sign up for or fully appreciate the changes to business processes that they bring. Because in most businesses, business processes are not written down, unlike procedures and policies, and changing what is not written down is a challenge.

Now that we understand the challenge of operating in a mature IT industry, let's take a look at some data from McKinsey Executive Surveys conducted within the past year on the views of business executives on the role and impact of IT. I think you will find these as interesting as I did.

The survey entitled "What Global Executives Think About Technology & Innovation" showed that while 43 per cent of technology executives believed that automating business processes was the best route to improving operating efficiencies, only 29 per cent of business executives agreed. Many business managers will have experienced the impact of projects on the performance of their business unit - long, drawn out implementations, the disruption and diversion of critical staff resources for long periods. This is also the group that feels the separation from the data that drives their part of the business.

They can access data only through endless processes - related to the definition of change requests and agreeing on the price and time - to get what to them seem trivial changes or enhancements. They are naturally very sceptical of the whole process and the architecture that we in IT have imposed upon them.

Now for the killer statistic from McKinsey's Global Survey, "Building a Nimble Organisation": only 7 per cent of business managers think that state-of-the-art IT is one of the most critical factors in an organisation's agility and speed.

Even if we accept that these figures may be a little lower in some organisations, you still need to consider what the real feeling is within your business and how you can address this situation.

Although McKinsey found no real consensus on how to become nimble, let's look now at what business managers said about behavioural elements contributing to agility and speed in the business. The most popular responses were sensitivity and responsiveness to customer needs (57 per cent), executives taking lead to motivate and instill purpose (48 per cent), empowering employees to reduce or discontinue activities that don't meet corporate objectives (44 per cent), continuous improvement of business processes (29 per cent).

Yes, these are the same managers that have the responsibility within your organisation for bringing in revenue and managing the "customer relationship".

What these figures tell me is that the first thing business managers are interested in is making their businesses more responsive and competitive through the provision of a higher quality of service. There is a recognition that many of the decisions made on a daily basis could in fact be made more swiftly and result in a higher quality of service.

The survey results show the frustration among decision makers with recognition that many decisions could be made more quickly if all the relevant data was available. Perhaps, under prescribed conditions, they could even be made automatically. Interestingly, the improvement of business processes is recognised as a key opportunity.

The benefits of agility and speed are also very clear to business managers, with McKinsey respondents citing higher revenues (39 per cent), greater customer satisfaction (36 per cent), greater operational efficiency (29 per cent), increased market share (26 per cent) and/or faster time to market (23 per cent). What I read in these benefits is that there is clearly additional capacity within most business unit manager's minds for their operations. Who wouldn't want to increase operational efficiency and increase customer satisfaction? Clearly also they believe that there are innovative juices within their own department and that these can be extracted.

Now, you may be thinking that I have simply pulled the relevant statistics from this survey, but I have had this very experience during the past year in two separate situations.

Firstly, InterSystems has just completed a project, in only eight months, to mechanise a department of one of our major financial institutions. This department operated as an aggregator of a number of data sources to its customer base, the primary source being one of those "legacy" transactional systems we spoke about earlier, and they serviced a large prestigious client base from around the world.

Previously they had 14 client managers who spent the first four hours of each working day consolidating and verifying the transactions relevant to their clients. This was then checked by a further team of four. Now the new system has gone live this work is all completed automatically using the rules and calculations agreed in each contract, which had formed part of the original complex and laborious process.

They have saved all this unnecessary labour with 50 per cent of each client manager's day now freed up for investment in the client relationship. In addition clients can now access the system irrespective of their time zone, specifying reports for short periods of operation and receiving them in whatever fashion best suits them. Previously this was by faxed requests and the compilation was manual!

Let me share another exciting experience I had recently in a government department, some would say the most difficult of environments in which to affect change. This business unit is very citizen-focused. However the quality of service that could be provided within the constraints of the business process was inadequate.

Understanding the operational goals was an important starting point to mapping the business process and simulating them with the costs of each element. Once we had a process that eliminated the operational peaks and produced a more responsive citizen-centric process - delivering more value and a higher quality of service - then we were able to create automatically the objects in business process execution language so that a composite application could be created to complete the full transition.

The largest part of this was mapping the business process currently employed - no, it wasn't written down! - then understanding the data resources available to verify the client and to process the data. The resulting process is forecast to save millions of dollars and was completed within a week.

The approaches used in these two examples are possible only because they are both based upon a focus on the knowledge worker using state of the art IT. The technology employed provides a unique opportunity, an opportunity to bring together both the business unit and technology in the interconnected world. Within InterSystems ENSEMBLE's single development environment built upon a high performance object database you can provide business process management, data coordination, composite applications and business activity monitoring.

Seamlessly fusing these previously independent technology stacks in a single product, ENSEMBLE rapid integration software fuses Enterprise Application Integration (EAI) with Enterprise Information Integration (EII). It unites service-oriented architectures with event-driven architectures, real-time business intelligence with business process orchestration, long-running business processes with real-time composite applications, data management with application development, message warehousing with message tracing, relational technology with object technology and Web services - using a single development and management environment across all four tiers.

The result: a single comprehensive solution for rapidly building and deploying new business fusion solutions that leverage the functionality of existing applications, orchestrating previously autonomous business and operational processes and integrating information from across the enterprise.

The business implication: software that can deliver dramatic reductions in the complexity, costs and time typically associated with complex business integration solutions.

Despite what sceptics in the business units may say, state of the art information technology does drive agility and speed, as well as support innovation in business.

Denis A Tebbutt is managing director of InterSystems Australia