Executive Advisory Program

1984 is Here for Healthcare, Hallelulah!

Back in the day, I once had a boss that was fairly savvy, and a senior exec at a major insurer (all of you long-time followers can figure out who/where).  The year was 1984 and the topic was healthcare reform.  He said "There's too many vested interests, and too many people making money, for much to change substantively in the healthcare system".

26 years later I am much grayer, older, and (unfortunately) unhealthier.  And most of my career has, in one way or another, held his maxim to be true.

I remembered that quote when Scott Brown was elected in Massachusetts, and it looked like the end of yet another run at healthcare reform.  I wasn't alone.  Angela Braly, the CEO of Wellpoint,  had an epic interview in the Wall Street Journal that said effectively the same thing.  I agreed in some ways with  Ms. Braly - a wasted opportunity, an ineffective bill at addressing root causes of healthcare spending growth, a chance that reform would make things worse and not better.

BUT THEN IT HAPPENED.

Putting aside all the politics, the arguments about BIG government, the tax and balance sheet impacts, and even the philosophical underpinnings of what this means to be "An American" (cowboy boots and all) - I do believe that this moment in time reflects a maturation of our country.

What was really  intriguing to me about Braly's comments was not the analysis of the healthcare bill and it's good or bad points, but her view about the role of insurers. Insurers have gone through this cycle as healthcare financiers, healthcare deliverers (the 90s had much discussion about building delivery systems), and now seem to be settling into the role of information brokers.

This is huge, and a very important insight by Ms. Braly.  It's something we have been talking about at Burton Group - the primacy of information management,  under the nom-de-plumes of "Business Intelligence" or "Business Process Management".  It's a business model that will have huge impacts on healthcare and healthcare IT.  We'll see significant growth in the whole healthcare information system - from data capture, to storage, to analysis.  Google and Microsoft see it, and it may be the only way left for healthcare insurers to compete.

Kudos to Angela Braly on recognizing it. Sympathies to her as well for such a poor forecast on the future of the healthcare bill. Stay away from the horse track.

This year, holy week and passover coincide.  For Christians, its about death and re-birth.  For Jews, the promise of redemption. The ramp-up to this week saw all this happen with healthcare reform.  Goodbye, 1984.

Too Much Automation, Not Enough Insight -- the redefinition of BI

Posted by Mike Rollings

Today I am working on my presentations for Burton Group's Catalyst conference "Forging Ahead: Navigating the New Normal" in Prague April 19-22.  Joe Bugajski and I will be doing the keynote for the business intelligence (BI) track -- What Can IT Do to Deliver Business Insight – Not Just Intelligence?

BI is 25 years old, yet its promise of important insight eludes most organisations. CEOs list BI as a top initiative and simultaneously lament poor results from large BI investments. One reason for this incongruence is the detrimental effects of the automation mindset and the pursuit of efficiency.  BI is aimed at the wrong thing.

For the last 239 years organizations have been applying automation as their primary tool of choice to improve production and efficiency.  An automation mindset erupted with the dawn of the steam engine in 1771 and was honed to razor sharpness by the management revolution started by Frederick Winslow Taylor.  This mindset has shaped how many have applied BI.  For most organizations, BI is nothing more than a glorified reporting tool to examine efficiency. They use BI to look in the rear-view mirror and learn about the past, but most are unable to predict upcoming events or learn lessons that will help them make decisions to navigate uncertainty.

The need for insight is not the tail (of technology) wagging the dog (business).  Management innovation is reshaping organizations perspectives about the devotion to efficiency where the goal is to reduce human involvement.  Profitable innovators are not driven solely by efficiency; they look for ways to magnify human involvement. They realize that the reshaping of organizations and management called for by the new normal thrives on how well they can foster the development of insight by humans. 

Joe and I believe that BI must trend toward a new definition – Business Insight.  Insight represents the opposite goal of automation, and it should reshape the primary purpose of most information technology organizations. We hope you can attend Catalyst to discuss this significant shift in thinking.

If you would like information about presenting at our Catalyst conference or to submit a proposal see our presenters page. 

To get a discounted price of €995 use the promo code “INSIDER” during registration.

Business as Unusual

Posted by Mike Rollings

In my last post I stated, "This is my first post as a Gartner employee.  In the spirit of business as usual, here we go".  Truthfully, this is anything but business as usual, and that is good.  The New Normal is filled with business as un-usual.

Taking a page from my own research in April 2009, "Real Transformation: Why IT Change Is Not Enough"...  "Your organization’s success has been built on a set of assumptions. Those assumptions have driven choices related to every aspect of what you do and how you do it. But fundamental assumptions upon which you have built success may have dramatically altered. Like any life-changing event, this may alter what customers you serve, the products and services you provide, and the processes and information required to support a new normal".

In the new normal all organization's need to release the death grip on what you think is important based on assumptions about the past, and they must keep in mind two uniquely human characteristics. 

First is our ability to derive comfort from 'business as usual' and to let it obscure our ability to see anything other than what we 'want to see'.  Like Michael Disabato writes, "Processes provide a framework and guidance, but should not be relied on as a universal panacea. While processes must be executed to be effective, blind reliance on them in the face of changing requirements is a recipe for disaster. Likewise, metrics can be a trap for the unwary".  Human's have an ability to develop blind reliance on status quo and 'facts' -- we manufacture reality. 

Many facts are 'facts' because we have declared them to be 'fact'.  The analysis that provided comfort to the managers of financial instruments leading to the sub-prime mortgage crisis is one example.  Another piece of this puzzle about 'fact' is in front of your eyes right now -- the device that allows you to read this blog post.  The device allows you to search and find your own facts, but it also has the power to obscure them.  Many of the business and information systems within organizations present a fact that was determined by someone (or something) else.  Do you really know why the information should be trusted?  When you add the fact that many data environments have multiple pieces of data that could be considered the same 'fact' and the one selected is just one of many possibilities, then it really makes you think, doesn't it?

The over-reliance on ‘facts’ also applies to planning by past patterns.  Don't assume it is the same situation and the old-business playbook still applies.  A pattern may render an important piece of the puzzle, but assuming it is the same is dangerous.  (Also see ‘Fixing Intel’ is a wake-up call for analysts everywhere).

The second uniquely human characteristic is our ability to use our minds to use information from multiple contexts to create a new insight.  This is an amazing gift that we all possess.  But as Gary Hamel states in "The Future of Management", "The machinery of modern management gets fractious, opinionated, and free-spirited human beings to conform to standards and rules, but in so doing it squanders prodigious quantities of human imagination and initiative.  It brings discipline to operations, but imperils organizational adaptability".  Hamel's statement is not a call for anarchy, it is a call for all of us to engage the human mind and spirit to do amazing things that are otherwise impossible, and to reorient organizations so that this can happen.

I believe we need to reorient our technology focus too.  Our IT focus for the last 50 years has been to automate and to fuel the credo of modern management -- pursue efficiency ahead of every other goal.  This is not surprising, since modern management was invented to solve the problem of inefficiency.

Frederick Taylor who is regarded as the father of modern management believed that an empirical, data-driven approach to the design of work would yield big productivity gain.  Hamel quotes Taylor who maintained that efficiency came from “knowing exactly what you want men to do, and then seeing that they do it in the best and cheapest way.”   But as Hamel further illustrates, this has become a liability for organizations trying to drive innovation and to tap into the human ability for discovery.  An overt focus on efficiency and its brother automation can hobble our ability to benefit from human insight.

The new normal requires forward-looking insight versus an over-reliance on historical patterns and 'facts' that may be irrelevant.  The new normal is business as un-usual.  As we proceed, we need to account for these two uniquely human characteristics to make the most of what lies ahead.

Marginalizing Enterprise Architecture

Posted by Mike Rollings

This is my first post as a Gartner employee.  In the spirit of business as usual, here we go.

Business Process Management (BPM) is a discipline for managing business processes explicitly as strategic assets.  Richard Watson states in his Burton Group document “Market Profile: Business Process Management Infrastructure 2009” that the BPM infrastructure market is growing and it  appears immune to recessionary forces.  The BPM market continues to grow.  BPM market growth should be great news for enterprise architecture (EA), but it is not all good news.  

EA includes the pursuit of business architecture -- a representation of the collective understanding of the business model, current strategies, business functions, processes and information.  Because BPM is married to process and information then BPM should mean good things for EA, right?  Surprisingly, no!  The way that BPM is happening in some organizations foreshadows a bigger trend for EA and a bifurcation of what we have long thought EA includes. 

In organizations pursuing BPM, Business Capabilities and Business Architecture should finally take center stage -- successful examples of BPM show that they do even if they do not use these terms explicitly.  The concerning part for EA is that Burton Group’s Contextual Research Study conducted in December 2009 shows that the people responsible for these successful BPM programs do not describe what they are doing as EA.  In fact, some even say that they are still figuring out how to connect with the EA group.  WOW!  One would think that EA teams would be celebrating in these organizations, not disconnected!

The good news is that the business is doing business architecture related activities.  The bad news is that EA is beginning to disappear into the business. Why is this happening? I believe it is because the EA community continues to make EA appear "special".  EA has become just another thing that the business does not understand and therefore feels "Oh, let IT worry about that".  The special language, the pursuit of EA as a profession, and the fact that people still are trying to figure out what EA is, what it does, and what it looks like when it is successful all contribute to the marginalization of EA.

Yet, this can be a good thing for the EA discipline - practitioners just need to come to realize that EA has gone through a fundamental change and EA does not exist solely as an IT competency.

• Embrace this and feel good about it - many already have.
• Learn to describe architecture’s business contribution and value without using EA’s secret language.
• Deliberately avoid a highly theoretical approach to EA in favor of helping produce results.
• Describe what you can do to help versus describing EA.
• Help the broader audience of business and technology professionals use the knowledge of dependencies, implications, and constraints to improve their results.

As I said in my blog post "Is the business result more valuable than 'EA'?", the reason we care at all about the analysis techniques etc. in the EA bucket is because we want to improve business outcomes – not because we care what you call the bucket!  When you focus solely on the bucket it leads to ivory towers, ineffective processes, a lack of participation, and low stakeholder commitment. I would rather focus on the value to the business. The foundations of good architecture are disappearing into the business.  Go with the flow!

#EA #Gartner #BurtonGroup #BPM

More Pie for the Masses...

Posted by: Jack Santos

How many emails do you get daily?  I remember when my response of 50-100 per day would elicit a “yeah, right…do you get anything else done?”.

Sad to say, 50-100 per day is probably the low end of the norm for most people these days, and my work load has topped  over 150-200 a day…then add my personal email box of 50-100.

Our collaboration and content group has a lot to say on information overload. Craig Roth has for years talked about the concept of information pull, instead of push.  That is, set up a system so that you can easily get what interests you, rather than just get a torrent of unsolicited stuff that screams for attention.

One of the ways is to move some of that load to wikis or discussion groups.  The jury is still out for me on that, and my take on the use of wiki’s (for other than joint authoring, like with Wikipedia) is skeptical.  But some of the benefits of SharePoint discussion groups, or even wikis, are (as Craig pointed out):

• it enables simple subscription/unsubscription to the topic
• it maintains a historical record of how decisions were made for future justification
• it allows new employees to gain visibility to the whole thread
• it applies thread management like a tree structure
• it surfaces tribal knowledge so the corporation can maintain it (rather than this knowledge residing in our personal inboxes which are unsearchable and destroyed when we leave)

I guess so.

But it’s still yet another place to go, yet another place for MORE information, yet another place vying for your attention.  Add to that blogs, news feeds, Facebook,  Twitter…. well….its just piling on.  Where will it all lead?

We may be at a tipping point where the processes for managing information are far more valued than the delivery mechanisms.  One can only hope.  Lyn Robison (from our Data Management group) loves to rant about how business people put up with bad information from their IT departments.  No doubt. The sad thing is businesses want more. 

Like the old  shtick about the two senior citizens in the Catskills: “This  pie tastes awful!” says the first, to which the friend replies “ YES! and the pieces are too small!”

And so it goes with enterprise information…

Is BI Relevant?

posted by Jack Santos

Business Intelligence (BI) is an area that gets sporadic, almost schizophrenic funding in most business organizations.  Some businesses do it well, often led by a visionary business leader that understands the need for insight derived from real, accurate data.  Most businesses define BI departments, which become a focal point for analysis and report tools (like Cognos), or degenerate into a repository for standard reports. Data warehouse bloat is a side effect of the lack of commitment to world class BI.

Sometimes the vision for BI in an organization gets mired in the muck of data.  I have been reviewing our research into data and information management technologies – and there is a lot of good advice there (I’ll be writing about it in an upcoming EAP document).

But for a real eye-opener about data, information, and how to mine and display it (especially with readily available public sector databases) – no video does it better than this one (Thanks to Burton Group CEO Jamie Lewis for bringing it to our attention). 

In the video, Hans Rosling’s insights raises up the quality of discourse about public sector policy; he also shows off what the result of effective BI could look like for most businesses.  The tool/techniques are further explored at Gapminder.org, and really brings longitudinal studies to life.   It’s in Google spreadsheets NOW, and shows that the desktop office software market is undergoing some renewed competition and innovation, due in part to Google Docs.  No doubt the specific tool will be an add-on to Excel next year…

Good stuff.

Intelligent Business Intelligence

Posted by Chris Howard

First of all, let me be clear that I am leery of acronyms positioned as silver bullets. Business Intelligence (BI), like Service Oriented Architecture (SOA), Business Process Management (BPM), is a dimension of effective IT strategy, but must be considered within the totality of architecture. Acronyms have a way of becoming impotent when pursued as individual panaceas.

OK, now that that’s out of the way, let’s consider the drivers for BI, and explore why it is top of mind for many executives in 2009.

2009 is likely to be one of the most challenging years for global business ever. Certainly, the continuously degrading economic situation in 2008 was a warm-up act. CIOs and their peers are searching for ways to constrain and reduce spending across the board, while their business partners are facing cuts north of 30%. This has stirred a wave of interest in cloud computing, software as a service (SaaS), data center consolidation, and virtualization: anything that reduces overhead. Enterprises are refocusing their efforts on core capabilities while examining alternatives for the non-core activities. Core capabilities are those that provide competitive differentiation to the business. Non-core, or context, capabilities are non-value added processes: commodity. The interest in externalized IT — the cloud and SaaS —reflects the desire to reduce internal maintenance costs and headaches. Expert external services are seductive.

This shift from core to context and the renewed focus on differentiation cannot be undertaken blindly. The desired result is a more efficient, cost effective business model that is well-tuned to respond quickly to external economic conditions. Some companies will be facing expanded regulations and compliance requirements, requiring surgical insight into their operations and transactions. The achievement of these goals is further complicated by an increasingly hybrid environment spanning internal and external IT.

The discipline of BI can help provide insight into operations during this period of evolution. Properly architected BI solutions use data in motion and data at rest to produce reports of varying detail. Ultimately, those reports enable business leaders to adjust processes in response to market conditions and opportunities. The big assumption, however, is that the information returned is correct and actionable. In most enterprises, there is a disconnect between data and information, suggesting that information management initiatives are intricately linked to effective BI. Out Data Management team writes extensively about information management: start here for more info.

The rush to externalize IT to cloud and SaaS solutions creates another problem. Once these solutions are in place, BI scenarios are forced to cross internal and external processes to provide end to end visibility. The opacity of external IT solutions may ultimately be a barrier to thorough BI. It is essential to choose external providers that can accommodate your BI needs and can integrate with BI solutions that you use.

Another issue that hinders holistic BI is that incompatible BI solutions are often packaged within purchased solutions. As a result, an enterprise may already own several BI tools from their major vendors. In this case, holistic BI may be accomplished either by finding ways to integrate across solutions using existing APIs. A more effective architecture may involve creating a XML-based BI overlay that can extract underlying BI output and roll it up into a unified view.

BI can provide valuable insight into your operations, allowing you to tune your business to external conditions. BI solutions, however, are not without architectural complexity and must be designed to provide actionable information from disparate systems.