|Issue:||Europe I 2013|
|Topic:||The role of intelligent business operations|
|Title:||Senior VP for ‘business process excellence’ sales|
Mark Rhoden is senior VP for ‘business process excellence’ sales across the EMEA region at Software AG. Mr Rhoden started his career with International Computers Limited and subsequently managed software businesses in Iberia, Eastern Europe, the Middle East, South Africa and the Benelux.
Organisations today effectively use less than five per cent of their available data. The business opportunities available through managing, analysing and rapidly reacting to the remaining 95 per cent are immense. But data is of little value without analytics to turn it into business intelligence. The resulting insights themselves require related processes to be place to enable the appropriate business response.
Across Europe, the common challenge presented by ‘big data’ cannot be under-estimated. Businesses generate a huge amount of information about customers and their buying patterns. The rise in the volume of data being generated by this open-ended supply chain is phenomenal.
Social networks alone create hundreds of billions of pieces of content per month: in industry, smart grids increase the data handled by power providers by 700 per cent: and mobile payments in banking are forecast to reach more than US$1 trillion in the next two years, generating auditable data for each transaction.
Businesses have a lot of experience in managing structured customer data, yet are now faced with the need to extract maximum value from a much broader variety of information. Today, unstructured data such as emails, social media and mobile typically accounts for as much as 80 per cent of information held within the business – often described as the ‘events cloud’.
At the same time, speed of response has become critical, as the pace of business and the velocity of how fast data is being produced and must be processed has also increased dramatically.
However, according to analyst Forrester, organisations today effectively use less than five per cent of their available data. The business opportunities available through managing, analysing and rapidly reacting to the remaining 95 per cent are immense. These range from continuously-improved business processes and initiatives, identifying operational bottlenecks or roadblocks before they occur, to improved customer information and their integration in new product development.
At the same time, enterprises need to be able to react to rapidly-changing regulations and new market players, as well as changing consumer demands. This means managing big data in realtime and integrating the resulting information in automated and flexible business processes.
The ‘big data’ explosion is creating a new challenge for today’s enterprise businesses, as they look to make the most of the huge volumes of structured and unstructured data held within the organisation.
Responding to this, by bringing together complex events processing with scalable in-memory storage and business process management (BPM), the business can store, access, manage and analyse this information as the basis of informed, intelligent and dynamic decision making.
In addressing the challenge of an ever more knowledgeable, demanding and promiscuous customer base, businesses are struggling to access ever-greater volumes of customer-related data locked away in remote parts of the organisation. Yet if used effectively, this information would provide the timely and personalised responses needed to improve their competitiveness and so protect and grow the business.
Companies are entering a new era in process management. A recent survey of more than 300 corporates undertaken on behalf of Software AG highlighted that almost three quarters (74 per cent) see ‘big data’ as an important new issue, with only six per cent seeing it as just another way of saying ‘a lot of data’. Equally, 59 per cent believe customer service to be their greatest challenge, with an overwhelming 93 per cent confirming that data management is key to achieving this.
Analyst Gartner Inc. believes this has significant implications, as the next generation of business processes will have to move beyond costsavings and efficiency and become more adjustable to changing market and customer dynamics. It will require a new style of work in which real-time analysis and decision management technologies are integrated into the transaction-executing and book-keeping operational activities which run a business.
To achieve this operational intelligence, many organisations are integrating analytics, social and mobile technologies into their processes and the applications that enable them. In this context, ‘intelligence’ means the ability to have visibility of events across the business in real time and use analytics to gain meaningful insights into this information as the basis of timely, automated customer responses.
Gartner calls this approach ‘Intelligent Business Operations’ (IBO) and sees it as the next stage in the evolution of BPM programmes. It describes IBO as: “becoming increasingly practical, because of the growing amount of data generated by sources inside and outside the company and the wide availability of software tools to process that data immediately.”
By enabling a truly holistic view of each customer, a scalable ‘big data’ framework allows the business to respond in real time to problems or opportunities in a truly personalised way, so maximising the customer experience. At the same time, internally this will also improve efficiency and reduce costs.
The importance of integration
The adoption of complex events processing (CEP) is central to a best practice IBO approach. One of the greatest problems facing today’s enterprise is that of a diverse and constantly-changing stream of millions of events happening every day, every minute or even every second.
These will vary from sector to sector, ranging from the precise location of an individual delivery vehicle to a stock price to a smart meter reading.
A best-practice CEP solution by contrast will be fundamentally similar. In each case it will continually monitor events and event streams looking for complex correlations, patterns and sequences to identify related events – or the lack of expected events. By adopting a well-defined pattern-based event strategy together with powerful real-time analytics, critical business trends not visible as individual events can be identified and appropriate, timely action taken.
Gartner defines a pattern-based strategy as: “offering a framework to proactively seek patterns from traditional and non-traditional sources, model their impact on business operations or strategy and adapt the organisation”. As part of this, business patterns are “sets of recurring and/or related business activities and events” and a pattern-based strategy brings together the disciplines necessary for business leaders to exploit opportunities or define threats and react in a timely way.
Historically, data analysis has in the main been reactive in answering questions around what happened and why. Today, pattern-based analysis allows the business to be more proactive in meeting the needs of customers and prospects, by addressing new questions around ‘what is happening right now?’ and ‘what is likely to happen?’
In seeking approval for any IT investment, the business case is usually based on the need to make money, save money or control risk. However, a best-practice pattern-based strategy will address all three criteria, by directly meeting the challenge of correlating and interpreting data held in separate, isolated silos.
A CEP solution analyses all live data streams coming into the business. In order to deliver a fully-effective pattern-based strategy therefore, it must correlate with historical data (held in the business for more than 24 hours) contained in a scalable in-memory data storage solution linked to the CEP engine via an enterprise messaging platform. This allows all data from disparate sources and formats to be processed and analysed in-memory – cheaply, rapidly and efficiently.
Increasingly, competitiveness relies on the ability to extract what is important or unusual and react to a huge volume of data coming from all types of systems and sources. The ‘big data’ challenge is not only around storing and analysing larger volumes but maximising the value of a much broader range of data.
Just as data is of little value without analytics to turn it into business intelligence, so in turn such insights only really take flight if related processes are in place to enable the appropriate business response.
By integrating with advanced complementary BPM software, this provides the necessary internal real-time collaboration and agility to resolve any issues and respond fast and effectively.
For example, having more intelligence on a customer’s buying habits will enable the business to respond more effectively; for example by manually making phone calls to encourage further linked or relevant purchases. Process automation however will improve the speed and quality of response, resulting in better operational efficiencies and a more engaged customer experience.
At the same time, a clear audit trail between the initial event and the process response provides evidence as to why the particular action was taken. This is especially important in those cases handled fully automatically, with no human intervention.
Major step forward
Not all businesses will need the sophistication of a CEP solution and some will lack the skills and business process experience to generate the benefits it offers. Yet for those organisations with the right level of business process maturity, this is likely to prove effective in achieving their strategic business objectives.
The key to success is to create an integrated IBO environment, rather than operate with disparate components. By establishing a complete infrastructure rather than, say just an events engine, businesses can take a decisive step forward in taking full advantage of the benefits of today’s fast-paced, ‘need it now’ big data environment.