Wednesday, October 04, 2006

Process is the New Black

What's in fashion these days?

On the runway some color, fabric or style becomes the 'new black' -- that indispensable item that is the basis of any wardrobe.

In the realm of analytics there is a new kid in town: "Process"

In "Competing on Analytics" Tom Davenport argues "business processes are among the last remaining points of differentiation" and that success comes from using analytics to "wring every last drop of value..."

In "An Analytics Manifesto" Neil Raden lays out arguments for an architecture that "enables vastly smarter business processes."

Both are saying that "analysis" should be pervasive and the foundation of any business wardrobe. I agree, particularly since analysis is all about understanding what's going on and then doing something about it. Davenport often uses a core, high-end predictive modeling group argument; Raden argues for an embedded approach. In any complex business, and aren't they all, both strategies are appropriate. The deciding factor of which approach is right depends on the risks of being wrong. Ok, this is beginning to sound like a Head vs. Long Tail of analytics argument.

It's also noteworthy to look at who sponsored the research: SAS in the case of "Competing" and SAP in the case of "Manifesto". Now, neither company is known for the contra position, i.e. nobody would implement SAS for resource planning and they wouldn't use SAP for advanced statistics.

The positioning aside, both articles point to the conclusion that this is different than how 'business intelligence' tools approach the problem. SAP in particular is positioning process-embedded analytics for Everyman. Their argument is based in part on the fact that there are 100 times more Excel users than all Business Intelligence tools combined.

If I were a cynic I'd argue: The BI vendors had 15-25 years to get it right, and didn't. So let's try another route. Given that SAP BW isn't highly regarded as user friendly, that's not much of a stretch.

Back on the serious side: providing people with the events, context, alternatives and potential impact necessarily for their roles is a very good thing.

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