2008: From Business Automation to Business Optimization?

However you define the goals of your organization–whether it’s about profit, or saving lives–it’s all about the quest for performance. Today, 9 out of 10 companies fail to execute their strategies[1]. That’s a sobering statistic–and an opportunity for IT organizations everywhere.

According to Gartner[2], business intelligence and enterprise applications are the #1 and #2 top priorities for CIOs in 2007.

2008 will see these two technologies come together, with Oracle+Hyperion and SAP+Business Objects (and to a certain extent IBM+Cognos). The result will be the first steps towards “performance excellence” systems that support business optimization, not just automation–and help organizations fix the gap between strategy and execution.

The last decade has been about automating business processes. The next decade will be about building business-centric applications. For the first time, organizations will have the opportunity to apply a systems approach to best-practice use of information across the organization as a whole, by synchronizing the two key components of corporate performance improvement: operational excellence and strategic change.

• Operational Excellence. By providing “ambient intelligence”–trusted data at the right time in the right format–organizations can make every person, process, and decision more intelligent.

  By making information actionable, front-line decisions can be automated and optimized. And IT can provide a systems approach to business process optimization, helping business users analyze information, collaborate around insights, and track progress towards goals.

• Strategic Change. Improving performance requires you to regularly take a step back and assess your overall strategy: are you producing the right products, for the right customers, in the right way?

  Today, most organizations have procedures for optimizing single processes, but few have a process for improving the organization as a whole. 2008 will see the rise of “information-centric applications” that fully integrate and synchronize strategic financial planning processes with day-to-day execution across the full range of company operations. By providing transparency at every level, and aligning the goals of the organization with the incentives of individuals, organizations will remove the biggest obstacles to strategic execution.

Performance excellence systems will support these two disciplines in a synchronized way: the operational information will be the same as the strategic information, but in more detail and delivered in real-time.

Surveys of CEOs, CFOs, and business leaders all agree–the problems of operational excellence and strategic change are at the top of their priorities.

So will performance excellence systems be the #1 priority for CIOs in 2008?

[1] Source: The Balanced Scorecard Dr Bob Kaplan and Dr David Norton

[2] Source: Gartner EXP CIO Survey (2007)