Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras

Dr. Anne Quaadgras aquaad@mit.edu

Making Data Work: Organizational Practices for Getting Value from Information

February 12, 2014 SSRC Conversations on Sociotechnical Systems

This research was made possible by the support of MIT CISR sponsors and patrons. Jeanne Ross, Peter Reynolds, Barb Wixom (MIT CISR), and Cynthia Beath (University of Texas) participated

on the research team.

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Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 3

What’s different now that data is ubiquitous?

§  When data is ubiquitous, using data well is essential to competitiveness

§  Using data well means working smarter on a daily basis (rather than “occasionally” transforming the business)

§  Working smarter is about using the “little” data that has become abundant to enhance both operational and strategic decision making

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 4

EVIDENCE BASED MANAGEMENT

CULTURE § Strategic Experiments

§ Customer Segmentation/ Mass Customization

§ Process Optimization

§ Business Intelligence and Analytics

§ Single Source of Truth

§ Business Ownership of Information

Working smarter entails culture change

Relationships depicted in this graphic are indicative of findings in three MIT CISR studies: Enterprise Architecture as Strategy, IT Savvy, and the MIT CISR Value Framework.

Efficiency

Strategic Agility

§ Scalability

§ Common Processes

§ Single Face to Customers

§ Component Reuse

DISCIPLINED PROCESS CULTURE

§ Straight-through Processing

CULTURE OF HEROICS

§ Task Automation

IT Solutions Digitized Working Platforms Smarter

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 5

IT’s role is necessary but not sufficient

§  Working smarter: an organization-wide habit of using data from a digitized platform to optimize each individual’s contribution to enterprise business objectives (i.e., use people’s smarts more effectively)

IT Solutions Digitized Platform The Smart Organization

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 6

Operational decisions execute strategy: Three keys to effective operational decisions

§  Single source of truth –  The sole accepted reference for decision-making and performance

management data –  Declare it

§  Scorecards –  Summary of daily operational activities capturing the activities that

best predict short- and long-term firm performance; serves as daily feedback on individual performance

–  Emphasize daily feedback

§  Business rules –  Specified actions, proven to be successful in meeting strategic

objectives, that address a given business circumstance –  Assign owners

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 7

People Working Smarter

How to work smarter: Key requirements

Source: J.Ross, C. Beath, K. Johnson, “Driving Value from the Data Deluge: Lessons from PepsiAmericas,” MIT CISR Research Briefing, Vol. X, No. 3, March 2010.

§ Establish and track daily metrics

§ Clarify roles

Single Source of Truth

Management of Business Rules

Scorecards and Accountability Structure

§ Standardize data § Optimize process § Provide operational data

§  Find §  Automate §  Analyze §  Improve

Talent Cultivation

§ Coach decision makers § Give feedback § Hire and develop talent

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 8

How Allstate builds the smarter workforce

Source: Ross, J. W. and A. L. Quaadgras (2011). "Working Smarter: The Next Change Management Challenge." MIT CISR Research Briefing 11(1): 1-4.

[1a] Design business rules to work within NextGen

[7b] Improve rules based on analytics

[1b] (Re)design processes & metrics to work within NextGen

[4] Create processor teams [7a] Improve processes based

on analytics

People Working Smarter

Single Source of Truth

Management of Business Rules

Scorecards and accountability structure

[2] Build NextGen platform & single data repository

[5] Build analytics team, tools, processes and standards

[6] Create standard and ad hoc analytics reports

[3] Initial training & coaching [8] Ongoing coaching on new

processes and rules

Talent Cultivation

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras

Working Smarter is profitable

-0.5

0

0.5

1

1.5

2

2.5

3

3.5

4

3.6% above

average 0.3% below

average

Net Margin (%)

MIT CISR Value Framework Survey, N = 212, Top Performer = Top quartile of Net Margin, adjusted for industry. Working Smarter is calculated by averaging 11 items. Mean Working Smarter Score = 65%

Bottom Quartile on Working Smarter (Score = 45%)

Top Quartile on Working Smarter (Score = 84%)

Industry-adjusted Average

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras

Assessment questions:

a. Do findings from post-implementation review inform future projects?

b. Are key stakeholders engaged in major projects as needed throughout a project lifecycle?

c. Have business leaders accepted ownership of key data?

d. Is there a digitized platform(s) that supports the enterprise’s key business processes?

e. Is there a data asset specifying enterprise master data, transaction data, and historical data?

f. Do you rely on a single source of truth for data?

g. Do you empower operational decision makers with clear business rules?

h. Do you create and revise business rules based on business analytics?

i. Do you empower operational decision makers with useful information?

j. Does feedback relate individuals’ actions to the enterprise’s goals (e.g., scorecards, sales/profit reports)?

k. Do employees openly discuss and work together on risks?

In your enterprise, to what extent (not at all ….. to a great extent):

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 11

Useful steps in creating a culture of working smarter §  Optimize processes that capture data

–  SEC revamps Tips, Complaints, Referrals §  Identify “sacred data”

–  Southwest Airlines focuses on customer reservation §  Ensure world class stewardship

–  PepsiAmericas establishes revolving data governance §  Identify customer segments

–  Foxtel rethinks product design/marketing §  Automate business rules

–  Citrix’s rules engine §  Track operational performance

–  Insurance claims processing analysis exposes many variations §  Digitize feedback

–  Protection One creates a daily scorecard §  Enhance visualization

–  Guess reimagines how to present top sellers to decision makers

Center for Information Systems Research (CISR) © 2013 MIT Sloan CISR – Ross, Quaadgras 12

References §  Ross, J. W., C. M. Beath, and A.L. Quaadgras (2013). "You May Not Need

Big Data after All." Harvard Business Review 91(12): 90-98. §  Ross, J. W. and A. L. Quaadgras (2012). "How Business Rules define your

business strategy." MIT CISR Research Briefing 12(12): 1-4. §  Ross, J. W. and A. L. Quaadgras (2011). "Working Smarter: The Next

Change Management Challenge." MIT CISR Research Briefing 11(1): 1-4. §  Ross, J. W., C. M. Beath, and K. Johnson (2010). “Driving Value from the

Data Deluge: Lessons from PepsiAmericas,” MIT CISR Research Briefing, 10(3).