Why – The Finger Stops Here

Accountability is becoming a key success factor in building competitive advantage

By the time you read this column, somewhere near 70 million Americans will have joined the “Do Not Call” list created by Congressional legislation to dramatically limit the volume of telemarketing calls those on the list may receive. In coming months, companies will have to shift their marketing and call center strategies — if nothing else, to make whatever phone contact customers initiate (such as service calls and other inquiries) far more significant.

Meanwhile, the drumbeat of corporate governance and regulatory compliance grows, drawing the attention of business and IT leadership. Delivering financial transparency — and implicit in that demand, higher data quality — is no longer an internal matter. CEOs lie awake at night, unable to shake the vision of being whipped and dragged through the media circus on account of their company’s fallen credibility, not to mention investment value.

Other regulations, such as the Health Information Portability and Accountability Act (HIPAA) and the Patriot Act have organizations facing new legal requirements about information access. Security and privacy concerns are also generating regulations. Financial institutions, for example, may soon be required to “alert customers by mail, telephone, or email when they find unauthorized access to personal data that could result in substantial harm or inconvenience” and expose them to identity theft, according to the Washington Post (August 13).

Corporate governance and regulatory demands are strong reasons why BI and other “smart” additions to enterprise applications are enjoying a surge of interest. PeopleSoft, for example, is touting the predictive analytics features of its CRM suite as essential to giving agents actionable information, which they can use to more deeply personalize phone time with customers and offer them relevant additional products and services. Data quality solution providers such as Firstlogic are becoming similarly adept at linking technology solutions to immediate business challenges.

Accountability and BPM

The core issue behind all of this activity is accountability. While productivity is obviously still important, CEOs today are very focused on all forms of accountability: performance, budget, regulatory, and more. This issue could be the catalyst that wakes up IT spending. The reasons are different from what we saw in technology during the productivity boom in the 1990s, and during the fearful run-up to the Year 2000. “Everybody has a desire to be held accountable,” says Jeff Rodek, chairman and CEO of Hyperion Solutions, which like other BI companies has reported strong earnings in 2003. “Corporate governance is giving us a tailwind, but this is not like Y2K, where the tick of the clock signaled the end of the business. Performance accountability is the real subject, and is part of a long-standing trend.”

Accountability issues seem to be falling into the emerging category of business (also called corporate or enterprise) performance management (BPM) — largely because, as Rodek says, accountability transcends the immediate problem of complying with the Sarbanes-Oxley Act, HIPAA, and other regulations. Balanced Scorecards, metrics, and other models and forms of measure are giving an increasingly data-driven flavor to assessments of employee and divisional achievement based on objectives.

These initiatives are also part of — but do not entirely define — the BPM category’s focus on improving operational and financial performance and aligning processes with strategic objectives. No matter which market analyst you listen to, you’ll hear high growth projections for the BPM sector. AMR Research offers a growth rate of 23 percent a year, to a market size of $12.2 billion by 2006. An August Meta Group report said that 85 percent of organizations it surveyed would undertake BPM projects in the next 18 months.

The Thrill of Reporting

Reporting has long been the bread-and-butter function of BI. While analytics, data mining, and the like have garnered more attention, solid reporting has always been what companies must have. Now, analytics seem to be taking a back seat to reporting, which is fast becoming an essential part of the enterprise infrastructure and will ultimately be the key BPM delivery vehicle. To capture market share, BI vendors have been racing to consolidate their portfolios around reporting. This year, Business Objects acquired Crystal Decisions; Hyperion snapped up Brio Technology; and reporting specialist Actuate picked up Nimble, which will help Actuate compete in the enterprise realm.

Cognos, meanwhile, has released ReportNet (see review), the company’s bold attempt create an omnibus reporting system that is high on both browser-based usability and server-based management. Cognos is focused on BPM as the magnetic force pulling together its wider portfolio, which includes tools for metrics management and other functions key to enhancing accountability.

Pressure to improve financial visibility is beginning to loosen the spreadsheet’s grip on budgeting and planning; organizations want a way out of “spreadsheet hell” and all of the data quality problems this condition creates. By focusing on accountability and other performance goals, BPM solutions will encourage organizations to see the spreadsheet as one tool — not the only tool. Role-based dashboards and portals, woven into an enterprise-reporting infrastructure, will become the ubiquitous interface, rather than the spreadsheet.

Beyond Technology

With the technology platform coming together to support the various demands for accountability, organizations may begin to look to their BI, data warehousing, and BPM providers, as well as the systems integrators and consultants that thrive in these areas, for more than just technical wisdom. At the Weasku Inn BI Summit I discussed in my last Strategic Knowledge column, our panel of experts debated whether consultants such as themselves have a role to play in the strategic and ethical debates about the use of information.

“As we advise about building BI and data warehousing systems, we must be more conscious of security and privacy issues,” said William McKnight. “In Europe, I rarely get technical questions,” said Colin White. “More often the questions are about privacy concerns.” Claudia Imhoff added, “Ethical and legal issues are making data quality a huge issue. Organizations know that they’d better have darn good data.”

Accountability, supported as never before by intelligent technology, will be a major change agent in the years ahead. Competitive advantages will go to organizations that accept the challenge and direct energies toward positive outcomes — rather than high-tech finger pointing.