may 18, 2008...improved efficiency of transactional workers end-to-end transactional processes erp...

A new agenda for enterprise competitive advantage

May 18, 2008

Peter Drucker

Knowledge – A True Source of Wealth

“The source of (corporate) wealth is something specifically human: knowledge.

If we apply knowledge to tasks we already know how to do, we call it ‘productivity’.

If we apply knowledge to tasks that are new and different, we call it ’innovation’.

Only knowledge allows us to achieve those goals.”

Work takeout, cost reduction, and end-to-end process transformation

NetworkingIntegration

Mainframe DP

Automation

Minis & PCs ERP

Companies have spent the last three decades remolding operations, taking cost out of the business. Today its about innovation and networked collaboration.

3

Technology drivers

Efficiencies created by automating core business clerical and transaction functions

Basic organizing principle is hierarchical, stovepipedbusiness departments and functions

Focus on transaction efficiency

1980Business

drivers

Key attributes

Function stovepipes Cross-functional processes

Inter-enterprise processes

Teams and networks

Integrated and shared data enabled re-engineering

Re-organized work around end-to-end transactional processes that crossed functional boundaries

Focus on transaction efficiency and shared information across functions

Companies extend beyond their 4 walls to grow revenue, reduce costs increase customer satisfaction

New internet marketplace

Focus on end-to-end processes and connecting with customers, suppliers and vendors

Work is performed cross-functionally and cross-organizational

Basic organizing principles based on teams; virtual, permanent or transient

Informal and formal communication and collaboration among individuals, teams and communities

1990 1995 2000 2011

Internet 1.0/2.0e-commerce

Internet 3.0Social Networks

Reinvents how companies innovate, build relationships, market and compete

Groups, networks and teams are dominant inside enterprises today – yet few companies have created a unified technology and business strategy to capitalize on the way people collaborate

4

Business Week April 28, 2008 indata

Preference in Group Size

9%prefer working in groups of two

54%prefer working in groups of three

27%prefer working in groups of four or more

10%prefer working alone

90% of U.S.

corporations support “group work”

Collaboration

82% of white-collar workers partner with co-workers

46%

30%

19%

4%

Motivation for the

Collaboration

42%40%18%

Frequency of the

Collaboration

Leading companies are adapting collaboration strategies to improve performance

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Application

Manufacturing

R&D

Employee collaboration

Product development

Training and simulation

Company Overview

Using state-of-the-art collaboration technologies to transform a traditional collection of suppliers into a seamless global collaborative to product the 787 Dreamliner. Real-time collaboration system networked 100 suppliers in six countries.

Copyright © 2008 The AKA Group, LLC. All rights reserved.

Uses 3-D immersive environments to conduct business process rehearsals, the management of events not easily practiced in real-life., e.g. crisis management training.

Leverages InnoCentive to tap into a global network of scientists to discover and develop new products and services faster. By 2010 P&G will obtain 50% of its innovation from outside its company’s walls.

InnovationJam brought together over 100K employees from 160 countries in a series of moderated online discussions. Combined insights surfaced breakthrough innovations.

With its Mindstorms product line, Lego offers a free, downloadable software development kit to make the product’s most passionate devotees part of the design team. Customers post descriptions of their Mindstorms creations along with the software code to share to make the product more exciting.

Technology

People Process

Information

Return on IntelligenceTM

ROI

ROI = Hard benefits/cost

Return on Investment

Technology

People

ROIintell= Hard + soft benefits/cost

Companies must think differently to find NEW ways to generate ROI in this new world - the ingredients are still the same, but the models and tools are different

6

Collaborationcentric

Virtualnetworks

Structured, unstructured, network distribution

Web 2.0, BI + KM + SN, navigator

Process

Information

Companies used return on investment to justify systems and process reengineering. It’s time to leverage Return on IntelligenceTM - expertise and knowledge of employees/customers

ROI

Leverage of /Web 3.0 and social networking paradigm to create new ways to deliver shared functions and knowledge to virtual teams

Systems support finding talent and skills, information sharing, and collaboration internally and externally across teams and networks of people

Integration of structured and non-structured information, data and content that can be distributed and shared among virtual teams internally and externally

Old New

Process

Information

People/Users

Technology

Enterprise business drivers remain the same, but companies need to leverage them in a new way to accelerate growth and innovation

7

Opportunity Hierarchy of positions Improved efficiency

of transactional workers

End-to-end transactional processes

ERP Internet Custom applications

Siloed operational data

Collaborative business processes

Individualized and role-based delivery of data and unstructured information to networks of people

Self-organized internal and external networks

Team-based, mobile, geographically dispersed networks, and communities

Enhance effectiveness of “knowledge workers”

Focus on improving innovation, product development, sales, decision support and analytical activities across non-transactional roles

Global IT platform Social computing, Web3D

and collaboration (mashups, rss feeds, iphone, networking sites)

Companies have spent millions on ERP systems over the last decade to improve the performance of transaction work, but many collaborative business activities have yet to be enabled effectively by technology

Copyright © 2008 The AKA Group, LLC. All rights reserved. 8

R&D &Product Development

Leverage cloud and mobility and social media to interact with customers in new ways

Market based upon mining of unstructured text of the internet

Financial analysts collaborate with functional departments on quarterly budgets, forecasts, compliance and regulatory requirements

Scientists, marketing, finance and engineering collaborate on new product strategies and plans

Customers act as co-innovators in development process

Companies harness external talent in innovation process to augment talent pool

ProductionOperations

Enterprises form development partnerships with external suppliers to integrate production, and create value worldwide

CustomerChannels

Financial Decision Support

Cus

tom

erSe

rvic

e

Sale

s &

M

arke

ting

Logi

stic

s

MFG

Prod

uct

Dev

elop

men

t

R&

D

Human Resources

Finance

Core Business Value Processes

Inter-process collaboration drivers

Traditional process improvement methods largely ignore collaborative business activities within, across and outside the boundary of business processes and functional departments

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Information Technology

Inter-process communication drivers enhance performance improvement

Make decisions, share information and expertise

Analyze financial and operating performance

Conduct research, innovate and develop new products

Seek consensus, evaluate information, brainstorm and resolve issues

Focus: Repeatability of knowledge worker thought process vs. repeatability of action

Identify, capture and improve collaboration points

Collaboration among teams of people across the enterprise are iterative and networked; they overlay the traditional functional view of the enterprise

10

Finance

Operations

Human Resources

Sales & Service

Procurement

End-to-end transaction processes Iterative and networked collaborative processes

R&D Product

Development

Technology Management

Team Collaboration

and Social Networking

Management & Operating

Support

Customer Channels

Mgmt

ProductManagement

Financial Decision Support

Cross-functional collaboration exists everywhere, opportunities to leverage collaborative technologies apply across the enterprise

R&D & Prod Dev

Sales access to new product and marketing information to sell products to customers.

Information including specifications and intended applications must be readily available and accessible to sales .

Customers looking for on-line information regarding products and company policies such as environmental issues.

Customers may want a secure log-on to track orders and collaborate on forecasts as well as new product ideas.

Ability to maintain skills, competencies and interests, allowing others in organizations to locate talent, ideas.

Establish communities of interest.

Finance uses information to develop revenue profiles and alternatives forsales andoperations planning.

Analysts do monthly analysis of business and financial results. Provide info to management to support decision making.

Legal and patent departments work closely with development labs and engineering tounderstand new ideas and products for patent applications.

New patents are the IP that are critical to enterprise future

Develop new products, commercialize them and sun set old products.

Require collaboration between lab,marketing andsales.

Engineer-ing

Manufacturingengineering must coordinate with production.

Product engineering must coordinate with labs and marketing.

11

Sales &Marketing Customer Employee

& HR Financial Legal &Patent

Suppliers & Partners Manufacturing

Suppliers and partners receive forecast information and purchase orders based on production plan. Plan changes communicated immediately to avoid over supply or shortages.

Manufacturing must coordinate forecast with sales, prepare a multi-level parts and recipe plan, trigger requisitions and schedule the manufacturing facilities. Changes must be communicated.

Collaboration and virtualization of information is required to support cross-functional processes and virtual teams.

11

New business drivers are required to measure performance improvement in this new environment

Traditional business drivers

New business driversMetrics Metrics

R&D Spend R&D as % of rev

Increased worker productivity

Shortened cycle times

6 SIGMA Error Rates

Improved job effectiveness

Reduced IT costs

Txn/hr

5 day closing

Error rates

Production and error

IT $ as % of revenue

Faster innovation

Increased productivity

Quality of forecast

Talent sourcing

Turnover

IT effectiveness

Time to product

Ratio of KW spend to total

Time to forecast, % deviation

Utilization by competency

Knowledge contribution

% function costs as % rev

12

Metrics focus shifts from process/function to collaborative, role-based metrics

Sales

The new emerging collaborative model requires new ways of deploying Information Technology

New Collaborative Business Architecture

13

Collaborative Knowledge work

HR

Sourcing

Operations

Finance

Ope

ratio

ns

Proc

ure-

To-P

ay

Ord

er-T

o-C

ash

ERP

Kno

wle

dge

& C

onte

nt S

tore

s

RD

&D

and

Pro

duct

Dev

elop

men

t

Knowledge

Functions Transaction Processes

Tech Info Collaborative Processes

Transaction work

Dat

a W

areh

ouse

Information

Info Tech

Integration of Structured & Unstructured

Information

Cus

tom

er C

hann

els

Fina

ncia

l, M

gt &

Ope

ratin

g D

ecis

ion

Supp

ort

Ente

rpris

e K

now

ledg

e N

avig

ator

Knowledge-enabled Workplace

The ability to harness the talents of all types of workers throughout the enterprise will become a defining capability for firms

Accounting Claims processing Accounts receivable Payroll HR processing Purchasing

Science Marketing Marketing director Financial analysis IT development Sales Supply chain

management IT architecture Department

management

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Knowledge Worker:: someone who uses knowledge and experience in the workplace principally to generate enterprise value

Knowledge work

Transactional work

Knowledge workers are now estimated to outnumber all other workers in North America by at least a four to one margin


So how to get there from here and what are the gaps today?


today

endstate

Knowledge work is about repeatability of thought process not repeatability of action

Unfortunately, the concept “thought process” is a formal concept completely ignored by traditional methods and approaches

Thought process = repeatable internalized knowledge work

Acts as common context for collaboration

Information use injected in context


Traditional performance improvement techniques treat thought process as a black box

What do they want to buy? Does our product meet their

needs? Do they have the budget? Who is the competition?

What is the long term potential?


Thought process can be embodied in a formalism that facilitates the design of knowledge work-based applications

ProductsCustomers Competitors

LearningsIntegrated Knowledge

BaseCustomer Input


Thought process metaphor can be used to implement true “business intelligence” by implementing a directed user interface

Thought process operators guides the user

What should I do next? Relevant knowledge,

examples, templates, guidelines

KnowledgeManagement

Processes

Opportunities

Sales Policy

Library

Identify

Objectives

Identify

Constraints

Identify

Info Needs

Define Rule

Opty Ranking

Estimate Cost

Info Needed

Filter

Opportunities

Internet Knowledge BaseData

Warehouse Customers Products …

Templates Information Sources

Companies

Information Needs

Qualification Factors

Information Sources

Template Adaptations

Information Cost Factors

Information CostsProposed Policy Adaptations

Current Conditions

Qualification Guidelines

Knowledge Capture Processes

Product

Rice

Soybeans Wheat

CornSelect Sales Down!Weather?Competition?Customers?

Industry News………………………………………….………………………………………….………………………………………….………………………………………….………………………………………….

Top Sales Execs************************************************************

Top Customers……………$ 120M……………$ 90M……………$ 78M……………$ 56M

Suggested Causes

RelatedNews

RelatedData

Recent Proposals……………………………………………………………………………………

Change ProductAll Panels Change


Lack of a unified strategy results in lost innovation and productivity

Company

Dept BDept A

Sub Dept 3

Sub Dept 1

Sub Dept 2

A disconnect exists between how information is structured versus how it is consumed; existing technology architectures do not adequately address this gap


Information delivery follows the hierarchical way companies organize work

People consume information as networks and teams; permanent or transient

Traditional New

Information Flow

E-Mail

PowerPoint

Water cooler chats

Team rooms

Networking site (e.g. Linkin)

Spreadsheets

Information flow interconnected

This emerging business model assumes delivery of information to role-based to teams and networks of people

Scheduled delivery of packets of information to teams Teams define membership and security

Enterprise Systems Data

Forecast

Delivery Service

StrategicPlans RFPs Customer

SurveysEmployeeFeedback

Mgmt Team Sales Team Customer Team Human Resources


Traditional New

Enterprise information strategies must integrate both internal and external metrics and intellectual property


Companies are hungry for comparative information

Competitive benchmarks

Best practice process metrics

Industry analysis/marketplace trends

Customer/supplier input and feedback

Average companies are characterized by a disintegrated delivery of internal and external metrics and IP

Comparative information must be integrated directly into the overall information delivery architecture to allow for a rapid and accurate response

Structured data

warehouse Integrated Information ArchitectureExternal

benchmark data

External metrics

Non-Integrated Information Architecture

External data and intellectual property

Internal data and intellectual property

Today, enterprise content management and knowledge management is disconnected from BI initiatives. Only 30% of information needs are addressed.

The integration of structured data and unstructured information delivers higher levels of work productivity, innovation, and creativity


Unfortunately, talk of knowledge management has made people’s eyes glaze over….

“Knowledge Management 2.0”, an integration of data, content, and KM systems, within the context of the social networking paradigm:

One place to go for all info Provides just-in-time info delivery Facilitates collaborative innovation Connects subject matter expertise

Source: Forrester

Traditional New

Dilbert by Scott Adams

To be an effective tool, knowledge management must be more than an internal search engine.

Structured data

warehouse

Unstructured content stores

External Metrics & Info

ExtendedInformationarchitecture

To enable the collaborative model, structured data and unstructured content and knowledge must be unified to deliver just-in-time information seamlessly

24Copyright © 2008 The AKA Group, LLC. All rights reserved.

Document Mgt

Content MgtWorkflowIntranets/

PortalsDesktop

Apps

Project Team

Rooms

Email Knowledge Mgt

Data Warehouse

ERP Non-ERP Systems

Decision Support

Content and Knowledge Stores

Uns

truc

ture

d In

form

atio

nSt

ruct

ured

Dat

a

Traditionally, structured data and unstructured information evolves separately throughout the enterprise

The knowledge domain model should extend across all dimensions of the enterprise business

We must understand how information is created and used in each domainTo accomplish this, we must:

Inventory information in each domain

Create high – level information models of each domain

Create an overarching knowledge taxonomy for the entire enterprise

Document sources and uses Document gaps


Taxonomy unifies structured and unstructured data through common concepts

Multi-dimensional concept taxonomies – The intellectual glue

R&D

Customer

Sales & Markets

Suppliers

OperationsEngineering

Competitors

ProcessesEmployee Legal

Locations

Taxonomy


Structured data

warehouse

Unstructured content stores

External Metrics & Info

Enterprise Information

Products

A comprehensive enterprise information management strategy must be created which recognizes that all information and related technologies to support day-to-day business must be addressed together


DataManagement

Strategy

ComprehensiveInformation Management Strategy

KnowledgeContentStrategy

Technologies Structured data Unstructured content External content

Info integration Reporting and info delivery Access and use Security and control

Transaction Work Focus

KnowledgeWork Focus

27

Decision support needs Operational needs Current state gaps Analytical and reporting tools Data architecture Data governance Data mgmt technologies Development, maintenance,

support Data quality and control

Opportunity identification End state vision Current state gaps Content and knowledge domain

architecture Content, KM, search, find

technologies Knowledge content governance Content technology architecture Retrieval and access tools Collaboration social strategy Collaboration tools

A collaborative, knowledge-centric technology architecture will displace a transaction-centric, ERP dominant environment in the next wave of the collaborative business model


Single enterprise portal

Core business ERP processing

Persistentcollaboration

spaces

Static pages, mash - ups,

other

Web communities, profiles, wikis,

etc

Flexible subject

knowledge delivery

Email,IM

Portal services

Web servicesDesktop apps, MS

Office

Legacy collaboration and distributed apps

Content Integration Services

Reporting and BI apps,

etc.

Single logical view of information stores

Meta data

ERP DWOther legacy data

ExternalIP

Enterprise Content Storage

Federated searchData replication

Knowledge Base

HR

Products

External data

CRM

G/L and planning

Documents

Ops metrics

Dep

’t

Location

Dep

’t

Geography

Port

al In

terf

ace

Navigation PortalInformation Sources

Inputs Enterprise Knowledge Navigator Outputs

ContentMetrics

Organizations

Structured Data

Unstructured Data

External data feeds

A collaborative business model will create the need for an Enterprise Knowledge Navigator, a new class of enterprise application that unifies information and “connects people with people” and “people with information”

Process information

Financial information

Customer information

Market information

Product information

Personnel information

Intellectual property

External metrics

Best practices

Individuals

Teams

Projects

Business units

Networks

Departments

Groups


The Enterprise Knowledge Navigator will enhance how people think, analyze, sell, create, advise, and decide within the context of their roles in the business


Organizations must also deal with the governance structure around ALL types of information management – structured and unstructured

IT InfrastructureGroup

IT ArchitectureGroup IT BI & KM Group Business

Community

Identify Bus Needs

Define IM Strategy

Evaluate IM Technology

Select IM Technology

Plan / Deploy IM Technologies

Manage Access to IM

Manage Meta Data

Manage IM Technology

No role Shared rolePrimary role

Currently no comprehensive enterprise definition of IM roles and responsibilities


Building the business case and next steps

1 Strategic context for enterprise content and information mgmt

2 “Maximum blast radius” adoption strategy ROI

Technology

Process

Information

Return on IntelligenceTM

Virtualnetworks

Structured, unstructured, network distribution

Web 2.0, BI + KM + SN, navigator

Collaborationcentric

ROIintell= Hard + soft benefits/cost


ROI

1. Strategic context for enterprise content and information management

Enterprise strategic objectives

Identify and improve knowledge intensive collaborative processes


Improving collaborative knowledge work processes must be linked to explicit “Return on Intelligence”

Speed and Responsiveness Growth and Innovation

Customer Relationships

Productivity

Employee Relationships


Knowledge-intensive collaborative work process targeting

Fuzziness

BusinessImpact

LowLow High

High

Supplier Management

Production Planning

Financial Reporting

Systems Management

• Accounts Receivable

• Payroll

• Accounts Payable

Benefits Administration

• Help Desk

• HR Development

Public Relations

• Marketing

Strategic Planning

• Sales

Product Development

• Customer Service

• Recruiting

Regulatory Compliance


2. “Maximum blast radius” adoption strategy for collaborative applications

Target ideally collaborative applications that are highly visible with “maximum blast radius” potential, ie., business benefit extends across multiple business functions and/or touches the most number of people. Use these initiatives as organizational stakes in the ground to seed benefits of IM to the business

Four dimensions of business should be addressed: Products & Services - Focus on improving innovation, idea to market time, scientific sharing, collaboration across business

centers, storehouse of proprietary IP

Customers - Focus on time to market, competitive positioning, customer satisfaction, sales through the use of collaboration tools and access to scientific information as appropriate.

People - Focus on connecting all employees. Fosters a “facebook”- like social networking environment to support business and technical collaboration. Knowledge about people, who they are, what they know readily accessible by all.

The Business - Focus on capturing and collaborating around cross-business best practices, business knowledge, competencies, capabilities, shared IP. Fosters internal continuous improvement, shared knowledgebase of institutional experience. Global best practices and improvement ideas that can be replicated and enhanced.

People

Business Best Practices

Customer Collaboration

Product Dev & Services


I HAVE TO STOP SOMETIME !!!!

QUESTIONS?


The AKA Group is a pioneering consulting firm with an innovative approach to enterprise performance improvement

Founded in 2006 by Allan Frank – 1st CTO City of Phila, Pres & Founder Answerthink/Hackett & KPMG CTO & Exec

Focus on improving Business and IT performance

Specializes in strategic business-technology enablement across enterprise-wide collaborative processes:

R&D, Innovation and Product Development Financial, Management and Operating Decision Support Customer Relationship Management IT Management Team Collaboration, Information Sharing and Social Networking

Services span IT/Business Strategy & Architecture through Program Management

Extremely senior principals Agile networked “open source” model of complementary teams

Industry specialization includes: Financial Services Chemicals, Pharma, Life Sciences, Healthcare Public Sector

38

Allan R. FrankCEO & [email protected]

www.akaplex.comContact Information
