A Flexible Approach to Information System Development

Almost all executives want more and faster information, and almost all companies are racing to provide it. What many of them overlook, though, is that the real aim should be not faster information but faster decision making — and those aren’t the same things.

In an era in which we can search the entire Internet in less than a second, expectations for the speed and flexibility of information retrieval within companies have risen dramatically. However, access to corporate data in organizations is rarely as rapid as an Internet search. “Why can’t I get information on our sales just as quickly as I can search the Internet?” is a frequently overheard complaint. That frustration has led many organizations to try to speed up the delivery of data and analysis, particularly in the context of decision making (typically described as “business intelligence,” or BI). But few organizations have reached an optimum with regard to how fast important information reaches in boxes, desks and brains.

 

Lack of information flexibility is another common problem. While standard reports can still be useful, as the amount of information in companies grows it becomes increasingly difficult to anticipate all information desires and delivery frequencies ahead of the need. Consulting companies that study information consumption routinely find that more than half of all standard reports aren’t being used by anyone anymore. Inflexible standard reporting means not only that paper is wasted, but that an even more valuable resource — executive attention — is misdirected.

 

Slow and inflexible information formats aren’t just minor annoyances. They can lead to major business problems. If organizations don’t find out quickly that, for example, a decline in sales has occurred with respect to a particular product or geographic region, they can’t address the problem quickly. If they don’t know that they have an issue with manufacturing quality, they can’t fix the production line. Slow information also can lead to issues of accountability and morale. As one European CEO told us, “If we have faster information we can make faster decisions. If we make faster decisions the performance increases — and it did in our company when we speeded up the information. But people lose interest when the lag time is long.”

 

To understand the problem and some potential solutions to it, we conducted both in-depth interviews and a survey of senior executives. (See “About the Research.”) Not surprisingly, many said they wanted their information faster. But there were major variations with regard to which specific types of information they wanted at a faster pace, and under what business conditions it was essential to have more speed. And because every executive interviewed had different needs and desires for information type and frequency, there is an obvious need for greater flexibility.

About the Research

 

To understand the problems and potential solutions involved in fixing slow and inflexible information flows, including how to prioritize information types and uses in order to target improvement efforts wisely, we interviewed both senior executives (15 current or former CEOs and business unit heads) as well as managers who are charged with information delivery. We also surveyed 302 senior executives at large U.S. companies about the speed with which they get the information they need, their desires for faster information delivery and their practices for integrating information into decision making.

 

There is also, though, a need for better understanding of how information really gets used (and not used), an understanding that should shape how organizations aim to improve their information speed and flexibility. Decision makers can digest only so much information, and only so fast; still, executives tend to request much more information than they can actually use. Often, the cycle time of decision making itself, not the pace of information flow, is the real bottleneck that impedes improvements in strategic operating speed.

 

The real question when it comes to information delivery is how fast and flexibly to do it so that what ultimately gets faster and smarter is not the information supply, but the decision making that determines a business’s performance.

Why Internal Information Can Be Slow and Inflexible

 

In order to understand how to speed up information — and to reduce some frustration — it’s useful to review why internal information often takes much longer to be delivered than an Internet search, and why it’s often delivered in inflexible formats. There are several reasons. First, there’s the issue of creating high-quality data in the first place. Establishing consistency — of currencies, of geographic classifications, of customer IDs — around a large organization is difficult, for example. Doing so often requires reconciliation, sometimes manual. Avoiding “multiple versions of the truth” usually necessitates rigorous information governance approaches and standard reporting formats.

 

Generating a report from an organization’s data usually demands intervention by IT professionals, which takes time — weeks or months in most cases. Producing anything other than standard reports requires query and analysis, which typically involves assistance from professional analysts and IT personnel. And because most organizations don’t want end users and decision makers playing with core transaction data, someone must move data into a data warehouse for access and analysis. Even when executives themselves were able to access data in the recent past, it was usually because prefabricated “cubes” of data — such as sales by region by quarter — had been made available to them. The preparation of the cubes takes a fair amount of time and has to be done in advance of the need.

 

In organizations where certain information is delivered relatively quickly and flexibly to senior executives, it may have required considerable efforts to procure and massage it by assistants. Several of the CEOs we interviewed were careful about what information they asked for, because they knew it would set off a storm of activity behind the curtain.

 

From a broader perspective, information emerges from business processes that are structured on a fixed and well-defined cycle. Most financial information, for example, is produced on a monthly basis. A change from the monthly cycle time would require different budgets, P&L statements, accounting systems and so forth. As one former CEO who had been a controller put it, “Once we’d squeezed out some of the wasted time, I didn’t continue to ask for the information to come faster because I knew all the processes involved in producing it.”

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