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Optimizing Your Enterprise Information Environment, Part 1: Issues and First Steps

BI Strategy

With already large volumes of information growing ever larger and more complex, most companies face a daunting, multiheaded Hydra of delivering new - and more sophisticated - analytical capabilities, meeting stringent compliance requirements and solving increasingly thorny data management issues. The ongoing impact of the Sarbanes-Oxley Act of 2002 is driving the creation sophisticated reporting infrastructures to provide the finance function with access to more detailed transactions in real time. Also, the Basel II Accord of 2004 requires the credit risk organization at companies to have better customer and relationship views to obtain aggregated customer measures of exposure, collateral and related risk.

As if that's not enough, many companies are really taking a hard look at scaling back their customer relationship management (CRM) efforts, despite the fact that customer-centricity is core to most organizations' strategies and drives the need for seamless integration of all aspects of the business and customer. Obviously, addressing data quality problems and eliminating redundant reporting solutions is a top priority. Finding ways to eliminate costs from operating budgets through internal improvement or external outsourcing is also a constant theme. To meet these tough demands, many companies are finding it increasingly necessary to make extensive near-term changes to their foundational enterprise information environments.

 In this month's column, I'm going to lay out the gist of the problems that companies face with their enterprise information environment as well as the foundation and benefits of a possible solution. Next month, I'll delve more deeply into strategies to implement the solution I propose here.

The needs that the enterprise information environment at most companies were designed to meet have changed significantly over the past half decade. Driving those changes is the rise of different types of information such as unstructured content as well as more sophisticated and complex information on customers, transactions and the financial environment. However, the foundational technical and data infrastructures at many companies are geared toward handling information from more traditional relational databases and transaction processing systems. It's becoming ever more critical to invest in upgrading these infrastructures to handle both the complexity and volume of new information. What I'm seeing these days is that many companies are commissioning exploratory projects to determine their baseline technology costs, the business value and ROI of future improvement opportunities, strategies for IT cost reduction and consolidation, and recommendations for extending and/or replacing their current enterprise information environments to better support business needs.

What many companies are finding during the course of executing these exploratory projects is that their existing enterprise information environment is difficult to maintain and does not provide the enabling infrastructure to support critical analytical and information processing needs. For example, in many cases, there are too many copies of corporate data - raising the issues of data authenticity and cleanliness. Also, the data stored in corporate systems is often very latent; it takes too long to get information to the people who need it; and users see the data different, inconsistent points in time in its lifecycle.

Another alarming problem that many companies are experiencing is that their solutions are too cumbersome and complex. There is often too much system maintenance required due to overloading and overuse. For example, many companies find that their enterprise systems are performing more functions - for more involved parties - than originally intended. This expanded business support for functional and line-of-business operations - along with growing data volumes - limits flexibility, manageability and performance.

This makes for enormous expenses related to the IT function. What's more, these costs are often widely distributed among the many legacy systems, data marts, data warehouses and master data management systems, so that their cost is "hidden" and difficult to pin down correctly. At many companies, numerous sources are often required to produce an answer to a seemingly simple question. Further, no single repository of information contains a single version of the truth about organizational data. Maintaining such an environment causes a costly leakage of crucial IT dollars that could be spent on moving forward rather than simply maintaining the status quo.

To solve these problems - and to minimize risks to existing operations as well as keep costs down - it's essential that companies make near-term strategic investments in improving the flexibility, manageability, performance and sustainability of their enterprise information environment. It's also necessary to make these changes under the rubric of a total enterprise information vision that combines cross-functional integration with strict adherence to the corporate strategic goals and objectives.

Figure 1 represents an optimized enterprise environment that is ready to tackle the problems I've mentioned above.

Figure 1

The ultimate goal of these changes should be clear - to provide a consolidated view of the business through unified information gateways that offer insight into and increased visibility of relevant and reliable information. If this goal is realized, the benefits can be enormous.

The benefits are interconnected. Often, the first benefit that many companies realize when they undertake a successful information environment optimization project is improved operating efficiency as a result of improved back-office operations. This leads to internal cost reductions and optimized vendor relationships. These optimized relationships, in turn, lead to enhanced customer management - which can include the ability to more effectively segment customers and bundle products and services to achieve better customer satisfaction levels. Enhanced customer management leads to improved service delivery, such as more effective real-time customer interactions.

Now that I've laid out the problem and teased you with the benefits of solving it, I'm going to devote next month's column to outlining - in more detail - an enterprise information systems solution that I believe can provide these enormous benefits that I've discussed here. If implemented properly, and in adherence to corporate strategic goals and objectives, the solution can provide companies with the ability to reduce their costs through systems consolidation, reduced maintenance requirements and more effective information delivery. Stay tuned!


Rich Cohen is a principal in Deloitte Consulting LLP's Information Dynamics practice where he is responsible for the strategy, development and implementation of data governance, data warehousing, decision support and data mining engagements to support the emergence of world-class business intelligence applications. Cohen has more than 27 years of experience in the design, development, implementation and support of information technology in a variety of industries. Over the last 18 years, he has had extensive experience in the creation of technology strategies, implementations and deployment of CRM and business intelligence solutions to drive improved business performance.

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