Appendix: Snapshot of the Information Evolution Model

Chapters 3, 4, and 5 detail the levels of the Information Evolution Model. This appendix provides a brief overview of each level. It can help you begin to define what level your organization is at now—and what the next level looks like.

THE INDIVIDUAL LEVEL: GETTING ALONG ONE DAY AT A TIME

From the 30,000-foot perspective, the Individual Level organization is focused on getting the job done—now.

• Business focus. Sustain day-to-day operations and promote the business. The focus is completely driven by the need to react to tactical and immediate business requirements. Long-term strategies for the business unit or the enterprise are not a priority.
• Data value. Data is valued by some as a source of individual power and does provide limited value at the department level but questionable value for the enterprise. As long as data is perceived as correct for operational purposes—bills are accurate, orders are filled correctly—upper-level management is content.
• Decision making. Decisions are limited to day-to-day, operational decisions, such as shipping, invoicing, sales, and collections.

  Most decisions are based on personal experience, intuition, or bravado with some reliance on information produced by Information Mavericks, typically on request.

• Globalization. The Individual Level organization's ability to operate at the global level and deal with different market conditions is very limited. This is due to the fact that the basic fundamental understanding of the organization's business and value chain is lacking at the enterprise level. Good understanding of the internal processes, the viability of the organization's products and services, and the organization's interactions and collaboration with its external partners are all essential requirements to enable the organization to operate on a global level. The inability to operate effectively at a global level may limit the organization's competitive advantage.

Infrastructure: Desktop Diversity

• IT architecture. There is no overall information architecture at the department level or the enterprise level. There may be pockets of strong operational systems such as manufacturing or production systems, but business performance information is produced by a collection of unconnected and unsophisticated desktop and personal productivity tools. As a result, there are many individual interpretations of business performance by the Mavericks. This is chaos in action.

  Individuals maintain their own data, tools, and methods. Tools used to generate reports and business metrics are rarely documented, and they may become orphaned when their creators leave the organization.

• Intelligence tools. Tool capabilities are limited to simple data extraction and reporting. Toolsets also include personal productivity tools, such as Excel and Microsoft Access. There are no technology standards at the department or enterprise level, and, therefore, sharing data is a challenge. If more sophisticated tools are used, it is only because ambitious, self-taught employees have acquired them.
• Information access. Information access is limited to those who know how to find the data and analyze it themselves or have access to an Information Maverick who can share the data. Distributing information for decision making is not a common practice. Consequently, decision makers do not always have access to reliable and consistent information and frequently rely on instinct. Multiple and inconsistent reports and business views create confusion and redundancy.
• Analytics. Very little advanced analytics technology is used. There may be infrequent use of analytics by individuals with the appropriate skills to meet ad hoc business requests.
• Data management. Data management depends on individual efforts of the Information Mavericks. Managing information is not viewed as a top business priority. As a result, there are many undocumented, unrepeatable, inconsistent data management efforts.
• New technologies. Organizations at this level are not able to take advantage of new advances in technology concepts and methodologies such as master data management, service-oriented architecture, or cloud computing. Implementing these technologies and methodologies requires an environment with a more mature level of collaboration.

Information Processes: Have It Your Way

• Degree. There is little emphasis on policies, practices, and standards around the collection, distribution, and use of information. Decision makers must rely on their own individual efforts to obtain information. In many cases, they must manually piece together information from many different individuals or sources. There is no defined or funded team with responsibility for supporting business users.
• Consistency. Consistent results, if they occur, are a fortunate accident. Two people in the same group, using the same information for much the same purpose, might do things differently. There are no departmental or organization standards. Information Mavericks have developed their own processes to get information.
• Metrics. Metrics are primarily focused on recent financial performance of the organization. The Individual Level organization does not generally collect and use other metrics such as customer satisfaction, internal efficiencies, and external market conditions. Most of the metrics are lagging metrics; that is, they focus on past performance.
• Governance. General information management governance, if it exists, is limited to operational and financial systems. IT and data quality governance are rarely observed at an Individual Level organization. People who prize autonomy appreciate the lack of standard protocol.
• Outsourcing. The culture at the Individual Level organization is heavily influenced by personal or individual objectives that greatly reduce the likelihood of outsourcing nonessential functions. Additionally, the lack of documented processes, standards, and policies introduces challenges in obtaining desired results.
• Change management. There is resistance to change at many levels within the organization. Maintaining the status quo is an acceptable and desirable approach for an Individual Level organization. The emphasis on individualism tends to squelch any out-of-the box thinking.

People: Data Stars

• Skills. The organization does not recognize the business value of hiring, motivating, and retaining individuals with critical thinking, technology, and analytical skills, except perhaps in the IT organization. Hiring practices and job categories do not typically reflect information management and analytical skills. Within business units, some people will bring information skills from their former jobs or pick them up on their own. These individuals may become Information Mavericks through their ability to analyze data and share it with decision makers.
• Motivators. Decision makers in these organizations are generally motivated by and focused on dealing with day-to-day crises within their own departments. They are not motivated to make decisions based on good quality information or consideration of other aspects of the organization.
• Dynamics. Information Mavericks may hold the enterprise hostage with their exclusive access to information. They will share their results (with their own personal interpretation), but not their process for obtaining them. Most other individuals have to base their decisions on instinct and experience.

Culture: Rugged Individualism

• Rewards. Rewards are subjective and often political, focused on individual excellence in day-to-day activities rather than contributions to corporate-level objectives. This reward structure creates internal competition for political favor and recognition, and does not reward information skills.
• Adaptability. The corporate mission and objectives are not well defined or communicated. Consequently, information management efforts are not aligned with corporate objectives.

  Change is feared and shunned unless there is personal gain involved. Information Mavericks are especially resistant to change, because they stand to lose power or influence if they must forfeit their proprietary positions.

• Collaboration. In this politically charged organization, managers exercise a lot of command and control. Although they issue edicts, the Information Mavericks hold the day-to-day power, since they hold the key to the information that managers need.

  There is little internal collaboration within or between business units. As a result, the organization's ability to respond to changes in market conditions is significantly reduced.

• Innovation. The environment is internally competitive. Thought leaders and innovators who propose anything outside the box are not encouraged or rewarded. They may, in fact, be viewed as a threat.
• Internal collaboration. Individual Level organizations are not in a position to leverage the diverse talents available in their environment because of the nature of their internal culture. These environments are very tactical and are not focused on how to maximize or improve their ability to use information and solve problems. Instead, they are occupied with the tactical nature of their day-to-day routine, and are content with very few individual efforts to manage information and provide answers to their operational concerns.
• Analytical thinking. Because information and critical-thinking skills are not readily available in all business units, decisions are often based on individual experience or gut instinct. Information management and analytical tasks are based on individual efforts that are scattered throughout the organization. These efforts are not coordinated or shared between business units, and are typically focused on tactical day-to-day operations. There is little emphasis on using analytics or nonfinancial metrics to drive decisions and set strategies.
• Social responsibility. The social pressure at an Individual Level organization is not viewed as a top priority. There is no significant organizational commitment or funding dedicated to social responsibility initiatives beyond the possibility of pet projects.

DEPARTMENTAL LEVEL: THE CONSOLIDATED ORGANIZATION

Silos of information are the hallmark of this IEM level. They are well guarded and enthusiastically supported.

• Business focus. Each individual department or business unit drives toward its own consistency and success. The focus is on meeting the short-term or tactical requirements of the business unit with little or no consideration of enterprise strategy or the performance of other business units.
• Data value. Information is valued for achieving department-level goals but rarely has an impact on a corporate decision, nor is it valued as a corporate asset. Users realize data quality is important, but they control quality only in their own domains—often by applying unique rules, manually correcting known errors, and filling in the gaps with their own knowledge. There is no big picture.
• Decision making. Decisions revolve around myopic departmental goals and requirements. Most decisions are made in departmental islands. Enterprise decisions are pushed up to higher levels where executives can add their insights.

  At the enterprise level, good decision making is hindered by the lack of consistent reporting from the departments. The available information provides differing views of performance because there are no standards or adherence to standards for data, reporting, analysis, or tools.

• Globalization. A Departmental Level organization may have limited ability to operate at a global level. The organization's ability may be limited to those business units and departments that have some control and understanding of their information management processes. Consequently, many global opportunities to leverage the organization's products and services may be missed, or explored and managed with great difficulties.

Infrastructure: Departmental Tools and Standards

• IT architecture. Hardware and networking standards have been established across the enterprise, but each department uses its own tools and data standards. Except for basic infrastructure, there are no enterprise-wide technology standards or frameworks. In fact, it is very fragmented. There might be dozens of departmental databases on servers stored in offices and maintained by individuals, most of them unknown to IT and some even unsupported by their vendors.
• Intelligence tools. Each department acquires and uses its own business intelligence tools—niche or proprietary solutions acquired to address a specific function, such as campaign management, supplier evaluation, or budgeting. These tools might be quite sophisticated but they cannot be used for broader applications outside the department without discussions and negotiations between business units. Without the oversight or control of an enterprise architecture group, redundancy of tools and applications remains a problem.
• Information access. Departmental data marts assemble data from the group's users and make it available in numerous reports, but these reports often present conflicting results across departments and provide limited context. How do the figures relate to real business issues?

  Worse, needed information might be owned by other departments, and there is no formal way of accessing it. There is some collaboration via meetings, memos, and simple file sharing, but understanding the data still requires the tribal knowledge and goodwill of information gatekeepers. There is too much time spent finding and assembling information; too little time is spent making sense of it.

• Analytics. Analytics expertise is limited to individuals or small groups contained within a department or business unit. Niche tools with specialized analytic capabilities are used, for example, in marketing or campaign optimization or cash flow forecasting, but their use cannot usually expand beyond that specialized function.
• Data management. Standards may be provided but not mandated or adhered to, so there are a lot of different departmental deployments of data management techniques. There is a lack of consistent enterprise data stewardship effort, which is why there is no consistency beyond the department level. For example, customers, suppliers, and partners are defined differently or given different account codes across departments. Although the data are available, it is very hard to get a reliable, consistent view of how the organization as a whole interacts with the customer.
• New technologies. Departments do adopt and use new technologies, but their adoption is inconsistent and limited to their department. Some departments may have the appropriate skill sets and appetite for early adoption of systems to suit their needs, while other departments are more conservative in their approach. The result is unmanaged, inconsistent, and inefficient utility of the technology.

Information Processes: Well Defined at the Departmental Level

• Degree. Information is collected, assembled, accessed, and tracked on a departmental level. Data acquisition processes are separate from analysis and reporting, and many users receive reports on a systematic basis. De facto groups may evolve to become providers of reports and analyses for the department or business unit. This responsibility emerges because there is no corporate Center of Excellence. Their perspective is limited to requirements and practices of the department.

  Data management processes are fairly well defined within each department but not across departments. Since analysis is based on a myopic view, it will not accurately reflect influences from outside the department. There is also much duplication of effort, and departmental information must be manually consolidated to get an enterprise view.

• Consistency. Although there might be uniform hardware, networks, and software in place, this infrastructure is not used consistently. Even the simplest things, such as the definition of a “customer” or “sale,” can vary by business unit. It is hard to generate an enterprise view that crosses organizational boundaries.
• Metrics. There is a heavy focus on static reporting of operational measures, such as gross margins, total revenue, total expense, or inventory on hand. Business analysts perform some interactive analysis to distill other performance measures, but only at a departmental level.
• Governance. If enforced, enterprise rules are left to interpretation by individual departments. Departmental organizations are characterized by a strong departmental autonomy and lack of emphasis on enterprise governance and policies.
• Outsourcing. The availability of documented departmental standards and processes makes it possible for individual departments to outsource functions, much like the adoption of technology. Each department may use preferred providers, but there is little corporate governance of this activity, limiting the advantages for economies of scale and consistent quality and vendor management.
• Change management. Change occurs at an inconsistent pace and depends on each department's appetite for change.

People: Subject Matter Experts and Gatekeepers

• Skills. The job of subject matter expert (or business analyst) has been established within departments, and Information Mavericks have naturally migrated to those jobs. Subject matter experts spend the majority of their time preparing and integrating information and preparing reports that put the best spin on the data.

  They are valued and paid for their information skills, even though they are not explicitly IT workers. Training, when it is provided, is done to satisfy departmental needs rather than any enterprise program for information skills training at the business unit level.

• Motivators. Team players thrive in this type of organization. They have strong managers who defend the department and create internal cohesion. Those with an interest in information management are recognized and appreciated for their skills.
• Dynamics. Team members work well together, but they are challenged when asked to work cooperatively with other departments. After all, those are competitors in the internal corporate struggle for power, recognition, and budget.

Culture: “Us versus Them”

• Rewards. Within departments, managers and subject matter experts have vested interests in controlling departmental data. Subject matter experts have emerged as the rightful owners of “good” data for their department and are rewarded for their ability to advance departmental agendas. They know how to use that data as “proof” of departmental needs and accomplishments. Incentives are based on meeting departmental goals, which may or may not be in line with the best interests of the enterprise. People are told they are empowered, but how empowered can they be if they do not have direct access to information?
• Adaptability. Change is embraced when it results in political or self-improvement gain for the department—or if it takes place in someone else's department (especially if it creates an opportunity to grab some of their resources). Change is viewed as a threat if it disrupts the department's own carefully groomed processes or if it requires disparate functional units to work together. Departments might actively resist change that benefits other groups or distracts them from their own missions, even if the organization as a whole would benefit. Even under the best of circumstances, change is poorly communicated, cautiously approached, and limited in results.
• Collaboration. Staff and funding are dedicated to departmental objectives, with the hope that the entire enterprise will be better off. However, the department focus creates an us-versus-them mentality. Every business unit protects data as its unique intellectual property. No one really wants to share. After all, to give away your knowledge is to give away some of your value and political position. In this top-down management structure with a strong team-first perspective, decisions can be very politically oriented.
• Innovation. Thanks to internal competition among departments, the culture is politically charged and somewhat distrusting. Department heads are focused on making their departments shine rather than on making the organization shine. Therefore, people who think outside the box might be tolerated. However, their good ideas might not get very far, because exploring new ideas outside the assigned department is seen as nonproductive.
• Internal collaboration. Since Departmental Level organizations are characterized as siloed environments, they can only leverage the diverse talent and skills of their workforce in each specific silo or organizational unit. Individual business units and groups will benefit when they manage to bring together different skills to focus on solving the business challenges faced by each group. However, they will miss the opportunity to benefit from the cross-functional collaboration between business units, which will benefit the entire organization.
• Analytical thinking. A more organized use of analytical thinking and analytical technology will start to emerge in some business units as they try to understand their silo business view. The development of business unit information standards and policies provides an opportunity to apply analytical thinking and use analytical technology to manage and optimize the operation of each business function. However, these organizations will miss out on the value of applying analytics to analyze business performance across functions and groups to understand more comprehensively the performance of the entire enterprise.
• Social responsibility. The commitment to social responsibility is limited to individual efforts by some business units. A tangible enterprise strategy and impact on social responsibility and sustainability may be limited due to the lack of internal collaboration between business units and functions.

THE ENTERPRISE ORGANIZATION: A COMMON SENSE OF PURPOSE

When organizations reach the Enterprise Level they are much better equipped to take advantage of data and use it to drive business decisions.

• Business focus. Enterprise business performance is the main focus and driver. There is now a set of common corporate strategies and tactics, and each group understands its role in executing those tactics and the correlation among business units. Performance is now managed based on an informed, comprehensive view of all operations across the enterprise.
• Data value. Information is seen as a critical strategic asset, just as important as tangible, operational assets. Everyone understands that integrated information is essential to run the business. The organization has managed to integrate internal and external information successfully across business units and functions to create an enterprise view of the operation.

  For the first time, the organization understands its business value chain. Managers and staff also appreciate the importance of data quality.

• Decision making. Integrated enterprise information is now available to all decision makers across the enterprise. Decisions such as engaging new suppliers or launching campaigns to support dormant markets are focused around managing the value chain.

  All decision makers have access to accurate enterprise data and are empowered to make decisions using the information assets available to them. Decision makers can identify alternatives and act on information from a truly enterprise-wide perspective, and their decisions now reflect enterprise goals and objectives.

• Globalization. The Enterprise Level marks a significant milestone that increases the organization's ability to operate at the global level. Enterprise Level organizations are in a much better position to engage in the global market because they have developed a clearer understanding of their business model and value chain.

Infrastructure: Integrated across the Enterprise

• IT architecture. Moving beyond stand-alone and black box tools in the departments, this organization has achieved an integrated enterprise information platform. An enterprise repository of integrated data stores and manages all information from disparate databases, proprietary tools, and external sources. Enterprise-standard tool sets and applications manage data extract/transform/load (ETL) processes, data quality routines, analysis, and information delivery. Processes are defined for evaluating and implementing new architecture designs and practices, like service orientation, web services, and virtualization.

  A central group has established at least a high-level enterprise data model that defines common measures, definitions, data standards, and metadata (data about data) for the whole organization. In this well-managed environment, central governance is maintained, all actions are tracked for compliance purposes, and all information assets are protected.

• Intelligence tools. This organization has made a concerted effort to manage and rationalize disparate data and tools across departments and business units. To maintain its enterprise view, the organization uses a standardized set of technologies, including data integration and management, reporting, distribution, analytics, and performance management. As a result of this effort, corporate memory, once reliant on operational processes, has now transitioned into a robust information system.
• Information access. Now that information resides in central data repositories, it is available to decision makers at all levels of organization, not just the original data “owners” or the executives. Furthermore, it has been cleansed through standard data-quality routines, so users can have confidence in the results. Decision makers now have access to information that represents “one version of the truth,” presented to them with contextual relevance.

  Users have access to the data through interfaces tailored for their specific needs and skill sets. Executive dashboards, summary information with drill-down capability for business managers, ad hoc query for business analysts, and sophisticated model development for quantitative analysts are examples of the flexibility provided. As a result, more users than ever exploit information with confidence and make more accurate decisions.

• Analytics. The use of analytics has now extended beyond the department and business unit specialization and moved to the enterprise level. Analysts from various business units now have access to integrated enterprise data and can analyze it to understand various aspects of the business and enrich the value of information used by decision makers.

  Now that the organization has integrated enterprise data available in analytical data marts, analysts can focus more on the analysis and less on finding and preparing data. With data available from across the enterprise and external sources, the results of analyses can be framed in broader context.

  Analysis and visualization methods distill meaningful insights from enterprise data, without requiring business users to become statisticians.

• Data management. Enterprise data management is driven by business requirements. The organization is considering operational business intelligence to address data latency in the context of those business requirements.

  Enterprise Level organizations have established enterprise data governance, identified data stewards, and laid the foundation for a master data management program. Processes are in place to enforce data standards. The organization is better able to comply with external reporting requirements, such as Sarbanes-Oxley, Basel II, IFRS, GAAP, SEC, Solvency II, FDA, and other regulations and regulatory bodies.

• New technologies. The adoption of new technologies is a managed process at the enterprise level. The organization is systematic in how technology is acquired, deployed, and maintained while still allowing departments to retain necessary autonomy to meet their individual business needs. This governed approach enables the organization to explore newer technology options, such as in-database processing, in-memory processing, Software as a Service, cloud computing, Advanced analytics, Big Data analytics, mobile computing, or Open Source.

Information Processes: Well-Defined across the Enterprise

• Degree. Information management concepts are applied and accepted. Data management processes are well defined, resulting in a shared view of operations and a reliable foundation for analysis. Processes to obtain information for decision making are well defined and detailed—technologies, people, plans, tasks, and responsibilities.

  Staff members can see exactly how they contribute to the business. Now that the organization has a holistic view of the enterprise, it starts to see duplicate, overlapping, and inefficient processes.

• Consistency. Enterprise governance is enforced, and data consistency is paramount. Centers of Excellence are in place to ensure consistent data definitions, data collection, data quality, analytics, and information delivery to support business objectives.

  Departmental and business unit information processes now align with enterprise objectives and with each other.

• Metrics. The organization now defines and tracks metrics related to overall business performance and the value chain. Departmental and enterprise metrics are more widely available to decision makers. Key performance indicators (KPIs) go beyond financial metrics to include measures such as comparative growth, customer satisfaction, internal process efficiency, and employee development.
• Governance. The organization has institutionalized governance to cover areas such as data quality, internal and external reporting, information life cycle management, data retention and disposition, information security and privacy policies, applications and tools, and intellectual property. These organizations have a much stronger handle on information governance.
• Outsourcing. Standards and processes are in place to use business priorities and core competencies to determine which business functions can be outsourced. Other standards determine how vendors are selected, terms are negotiated, and quality of deliverables is managed. Controls are in place for the bidirectional movement of data and information to and from vendors.
• Change management. Enterprise objectives are the drivers for change throughout the organization and within departments. Objective-driven changes are more readily adopted throughout the organization.

People: Knowledge Workers Encouraged to Work with Data

• Skills. The organization uses an up-to-date set of defined job categories to guide staffing initiatives. The organization actively seeks to recruit people with the targeted technical and information skills. The workforce contains a high percentage of knowledge workers—team players who have domain knowledge and understand corporate goals. Career development programs are widely used to keep employees current with new skills, technologies, and techniques.
• Motivators. Employees are encouraged to make fact-based decisions, based on the availability of complete and accurate information in the Enterprise Level organization. Exceptional information skills are rewarded accordingly because the organization places a high value on information.
• Dynamics. Employees at this level are aligned with enterprise goals. This alignment reduces the interdepartmental competitiveness typical in these organizations; every employee is driving toward the same destination.

Culture: All for One

• Rewards. The reward structure encourages users to comply with enterprise information standards. At this level, it is no longer acceptable to run wild and free with independent tool sets and methods. The organization especially prizes employees with exceptional skills in information management. The organization has defined career paths for information experts and provides ongoing training and organizational development to foster excellence.
• Adaptability. There is a strong drive by employees to obtain a clear and accurate view of operations, which requires a greater level of adaptability compared to the Departmental Level. Employees are now willing to share information and knowledge among themselves and across business units as long as the causes and benefits to the organization are well communicated.
• Collaboration. Multidisciplinary teams come together to solve corporate issues, and then are reshaped when the work is done. Employees may be temporarily assigned to cross-departmental teams in a way that best utilizes their skills and job functions. As a result, the workforce becomes adaptable; team members can work with anyone to get the job done.
• Innovation. Everyone is focused on the health of the enterprise and on producing high-quality data and analytics for strategic value. Employees are starting to think strategically, and a lot of ideas are being generated; more reliable information is made available. Some ideas make it to fruition, but with no real consistency because there is no formal means for evaluating or prioritizing them.
• Internal collaboration. Reaching the Enterprise Level marks the first opportunity for the organization to take advantage of its diverse collection of talent and expertise. The environment provides the opportunity for organizations to maximize the value of the collective and diverse expertise of its workforce and channel it to focus on understanding its value chain at the enterprise level. Enterprise Level organizations are willing to integrate a collection of multitalented individuals with multicultural skills covering critical thinking, technology, and analytics to focus on solving enterprise business objectives.
• Analytical thinking. Enterprise Level organizations focus on managing organizational performance based on an informed, comprehensive understanding of the enterprise value chain. The organization as a whole places more emphasis on critical thinking and analytical skills, which are made more available for cross-departmental initiatives. The availability of reliable enterprise information is feeding data-driven decision making.
• Social responsibility. The availability of comprehensive and accurate enterprise information drives organizational self-awareness. For the first time, the organization begins to establish strategies to address its social responsibility and sustainability goals.

THE OPTIMIZE LEVEL ORGANIZATION: ALIGNED AND READY

The Optimize Level organization is a well-oiled machine that has a clear picture of its value to customers and can adapt to any market change or condition with sufficient and continuous commitment. The organization has built on the integrated information environment it created at the Enterprise Level to further (and continually) optimize market alignment, business decisions, and processes.

The progression from the Enterprise Level to the Optimize Level is a fluid one, because it requires no significant overhaul on any dimension, just incremental enhancements in each. However, this level represents the point at which organizational focus can shift from collecting and integrating data to gaining genuine value and business insight from that data.

• Business focus. Organizations will start building on the integrated infrastructure developed at the Enterprise Level and the clear visibility of their value chain. They begin to optimize every aspect of their business function by driving the cost out and maximizing profit. The organization becomes more in touch with external market conditions and can foresee the slightest shift in expectations and realign the organization accordingly—while always improving the efficiency and effectiveness of related processes.
• Data value. Information is tightly woven into the fabric of the business and is highly valued as a strategic asset. Integrated enterprise information is essential to identifying potential areas of efficiency gain.

  There is an appetite for more data than ever because the organization monitors and analyzes structured and unstructured data from many sources: markets, customers, partners, suppliers, and even newer social networking sources like blogs and wikis.

• Decision making. Decision makers use integrated enterprise data to optimize their value chain. For example, decisions focus on optimizing how the organization is dealing with its suppliers, customers, and partners.

  Decision makers at various levels focus on optimizing the business function they are responsible for with a clear understanding of the impact of their decisions on other business units. The decision-making environment is so agile that it can react quickly to the nonstop changes that happen in today's economy.

• Globalization. Optimizing the organization value chain represents the main focus of a Level 4 organization. The optimization process spans all aspects of the organization including its operations in various markets. Level 4 organizations are not only able to operate very efficiently in the global market, but also able to improve their bottom line in every market.

Infrastructure: Anywhere, Anytime Intelligence

• IT architecture. A Level 4 organization will evaluate and optimize its IT infrastructure to eliminate duplicate functions and processes. There are concerted efforts to identify and separate IT infrastructure functions that should be centralized from those that should be left to the business units. The objective is to increase the autonomy and flexibility for decision makers in business units while maintaining control over areas that should be governed by enterprise-wide rules and standards, such as security, data quality, and governance.

  The organization also expands its IT infrastructure to increase collaboration with partners and customers, allowing them access to certain organizational data. The infrastructure is more open to integrate external data and contact channels to optimize insights for decision makers.

  The infrastructure is reliable and fault tolerant, and data quality processes are widespread. The metadata model documents the entire business process, value, and strategy. Everything is transparent. A “closed-loop” infrastructure feeds results back into the system to create a continuous learning environment.

• Intelligence tools. The use of business intelligence tools goes way beyond drill, sort, filter, and rank—the calculations and tallies that are often mistakenly called analytics. Extending the value of the Enterprise Level analytical tools, users can predict future outcomes of interest; explore and understand complex relationships in data; and model customer behaviors and processes.

  Business intelligence tools model work-flow interactions to develop new and improved business processes. They monitor cause-and-effect relationships to continue finding opportunities to improve. They examine customer information to detect patterns that predict future behavior. And they get answers in real time, or close to it.

  In fact, information has become so automated and integral to the business that it is just something employees expect to be there when they need it, just like their desks and chairs.

• Information access. Organizations have an increased focus on information personalization. They make concerted efforts to determine the type and format of information needed by each information consumer category. Furthermore, special attention is given to the method and technology used to deliver that information. The objective is to match the information needs and skill level of users with the delivery method and content. Streamlining this process is essential to accelerate the optimization effort that characterizes a Level 4 organization.

  Critical external partners now have access to organizational data that enables them to work more collaboratively with the organization. Organizations provide their customers with more information to optimize and personalize the relationship.

• Analytics. The IT infrastructure is able to provide advance analytical capabilities such as optimization, forecasting, and predictive capabilities. The Level 4 organization is now focused on combining domain and analytical skills with these technical capabilities to optimize business performance and drive out cost and inefficiencies in the process.
• Data management. Additional enterprise data management effort is driven by optimization requirements that center on how the organization works with partners, customers, and suppliers. A strong focus on optimizing the organization value chain leads business users and decision makers to produce new data management practices constantly. Dynamic data management processes are in place to address the changing requirements. Centers of Excellence may play a significant role in enabling a Level 4 organization to be agile enough to meet new data management requirements.
• New technologies. The optimized nature of the Level 4 organizations accelerates their adoption of new technologies and concepts, especially those technologies that strengthen the relationships with customers, partners, and suppliers. Furthermore, Level 4 organizations are more aware and concerned about social networking media and may be more willing to incorporate insights from these media into their corporate database. Text analytics and social media analytics are used to extract insights from these media as part of the optimization process. The governed approach established in the Enterprise Level to evaluate the adoption of emerging technologies becomes more critical to continue to support optimization objectives.

Knowledge Process: Continuous Improvement

• Degree. Information processes established at the Enterprise Level are now expanded to provide a closed-loop feedback to enable optimization of internal and external functions. Best practices are captured to prevent repeated mistakes. This is the true “learning organization.” Project experience is captured and cataloged, and new project teams start by checking out these corporate experiences.

  Level 4 organizations put in place new information processes that govern how external information sources are integrated with organizational data. External information sources include suppliers, partners, social media, distribution channels, and, more importantly, customers.

• Consistency. Level 4 organizations make wider use of Centers of Excellence, which now focus primarily on optimization and enterprise information management in addition to data integration and quality.

  Consistent processes, tools, and information enable business units and decision makers to better analyze the relationships and dependencies between various business functions, which is essential for optimizing the value chain. For example, if combining two items on a promotional web page doubled sales of the cross-sell item, that knowledge can be quickly applied to in-store displays.

• Metrics. Because value chain optimization is the driving goal, a Level 4 organization's metrics reflect a more outward focus than ever before. The organization defines and tracks measures across time periods for the entire business value chain, such as employee productivity, sales growth rate, customer satisfaction, time to market, and adoption rate of new products and customers.

  Furthermore, there is an increased emphasis on analyzing the cause-and-effect relationships among performance metrics. To optimize, the Level 4 organization must dedicate an increased level of effort toward understanding root causes and key drivers of its performance.

• Governance. The strong governance framework established at the Enterprise Level has expanded to include relationships, information exchange, and processes with partners, customers, and suppliers.
• Outsourcing. Better understanding of the value chain and the strong emphasis on optimizing their business performance enables the Level 4 organization to define its core competencies and identify functions that can be outsourced. This effort enables the organization to focus on outsourcing functions that are not core to its business.
• Change management. Now that change is a core competency of the organization, new processes are put in place around optimizing the enterprise performance. The organization models work-flow interactions and analyzes results in the context for continuous process improvement.

People: Self-Managing Knowledge Workers

• Skills. A Level 4 organization enriches its job family with new categories that focus on analytics, forward thinking, and performance management with wide-spanning authority and accountability. Critical thinking skills are vitally important, to monitor market data and analyze what it means to the organization's entire value chain.

  Not surprisingly, the Optimize Level organizations face challenges in recruiting and retaining the right resources and skills. They often make significant investments in training and retaining their workforce. In many roles, information management and analytical thinking skills are required for advancement.

• Motivators. A Level 4 organization permits more autonomy and empowerment among its skilled employees. Clear rewards are offered for employees who can think out of the box to achieve greater optimization. For an achievement-oriented individual, these organizations can be very gratifying places to work.
• Dynamics. Level 4 knowledge workers are very focused on incremental process improvement. There is a strong commitment to process improvement and optimization. Peer groups are formalized across departments; these groups get together for brainstorming sessions that can lead the entire organization into new market dynamics. Employees and decision makers leverage information and use analysis, trending, pattern analysis, and predictive results to increase effectiveness and market share.

Culture: Thriving on Change

• Rewards. The compensation system is structured primarily around improving business performance. The organization expects employees to apply critical thinking, perform validation of assumptions, and determine root causes as bases for decisions. A well-communicated reward system is in place to reward employees who operate in this manner.
• Adaptability. Change is a core competency and is viewed as an opportunity, not a threat. The information architecture is adaptive, and so are job descriptions, accountabilities, organizational structure, work flow, and processes. That is a good thing, because change is rapid, iterative, and continuous—just as it is in the markets the organization serves.
• Collaboration. The environment promotes widespread sharing of internal and external information across business units and functions, providing a broad context for communities of interest to share their experiences and fine-tune the business. This culture of community now extends outside the organization to include customers, suppliers, and partners.
• Innovation. With a participative management style, the culture is very collaborative and supportive. Strategic thinkers are prized as visionaries, and their ideas are given a chance to fly. Some of these ideas will flop, but mistakes are not punished; they are viewed as learning experiences. The culture embraces the permission to fail when exploring new hypotheses and assumptions. The organization is so agile that missteps can be easily foreseen or overcome—and prevented from recurring.

  This supportive attitude works both ways. People are willing to accept the concept of compromise for the good of the organization if they know the organization is willing to compromise for them.

• Internal collaboration. To tackle difficult business problems, Level 4 organizations form diverse teams, combining expertise from various business functions in ways they've never done before. Critical analytical, business, and technical skills are leveraged to focus on optimizing the enterprise value chain. Level 4 organizations managed to identify, document, and distribute information about their enterprise value chain in the previous level. The process of mobilizing diverse talent may be facilitated by enterprise information management Centers of Excellence. These centers make that talent available to all business units.
• Analytical thinking. There is a higher focus on the value and use of analytics to optimize the current enterprise value chain established in the previous level. Decisions are always based on analytics that not only explain what was but reliably predict what will be, using quantitative and qualitative inputs. “Should we invest in this new product?” “Will this process improvement be worth it?” Answers to such questions emerge from sophisticated decision support tools, such as predictive modeling using activity-based costing to calculate the return on investment (ROI) of process changes and risk management to determine whether to chase a new opportunity.
• Social responsibility. Level 4 organizations are in a much better position to implement effectively their strategies to address their social responsibility and sustainability goals. Executing their strategies is facilitated as a component of their commitment and focus to optimize their enterprise performance and value chain.

THE INNOVATE LEVEL: SPAWNING AND SUPPORTING NEW IDEAS

The Innovate Level organization extends the value of previous evolutionary stages. This organization spawns new ideas as a matter of course and institutionalizes innovation in a manner similar to a think tank. This organization understands what it does well and applies this expertise to new areas of opportunity. There seem to be no limits to the new ideas that employees put forth, ideas that bring revenues from new sources. Some of the most inventive ideas are gleaned from other industries and unlikely inspirations.

• Business focus. There is a deliberate effort to sustain growth by constant innovation by maximizing the organization's competencies, intellectual property, and resources. Top-line revenues grow by applying core competencies to new products, markets, and business models—which propels the organization to market leadership. They have the agility to respond to change in markets.
• Data value. The Innovate Level organization demands more value from the data than what is offered by its own internal data. The data value is an essential tool for uncovering and exploring new opportunities and driving innovation. The organization explores data not only from its own operations and markets, but from other spheres where innovation might be found. The organization has confidence in its data and is able to use it to accurately model likely outcomes and effectively manage risk as it explores new products and markets.
• Decision making. An increased focus on innovation characterizes the types of decisions made by these organizations. Decision makers at various levels put an increasing effort on differentiating their products and services from their competitors, and on expanding into new markets and product lines.

  Everyone in the organization is encouraged to offer up new ideas constantly, which are routinely modeled in a simulated environment to identify the ones that will drive the organization forward. Groups with various competencies are formed to analyze and prototype new products and services. Go/no-go decisions are based on sophisticated descriptive and predictive analytics that include data from the entire value chain—from sources inside and outside the organization.

• Globalization. A principal focus of organizations at this level is innovation that is driven by a well-defined and aggressive internal process that encourages prototyping, piloting, and exploration in new markets. These organizations dominate their industries in market share, and are very successful competitors in the global market.

Infrastructure: A Support Network for Innovation

• IT architecture. The integrated, enterprise-wide IT architecture serves as a support network for creativity. It includes systems to assemble any type of internal and external information that could spawn new ideas, manage the pipeline of new ideas, and implement ideas that are deemed worthy to pursue. The infrastructure accepts structured and unstructured data in a variety of media and languages, such as databases, text documents, graphics, e-mail, and digitized voice communications.

  Proposals and pilot projects are documented, categorized, and easily accessible for reference and use. Post pilot reviews are documented and made available to all who might learn from them.

• Intelligence tools. Predictive analytics are used extensively to model the future—to identify potential ideas quickly, rule them out or approve them, and minimize the risk of moving forward with any of them. “What if” becomes a daily question, and analytics provide reliable answers based on quality information. Risk management systems and human capital management systems take on new life. The organization also adds an integrated application to manage the pipeline of new projects.
• Information access. User access at the Innovate Level depends on role. Many employees will focus on maintaining Enterprise and Optimize Level efficiencies. A smaller number will focus on creating change—identifying and seizing on new opportunities. These people will have widespread access to many data sources from a broad selection of industries, areas of interest, and backgrounds.
• Analytics. Innovate Level organizations focus on exploring new ideas, products, and services, and use many different types of analytical technologies and methods. These capabilities are used to conduct different types of analysis such as cost benefit analysis, customer behaviors and propensity to buy products and services, external market data, and so forth.
• Data management. The data management environment and effort are very dynamic and set up to expect and facilitate the need to analyze and explore new business and market opportunities. Data management efforts enable analysts to regroup and restructure products and services data in different ways to analyze future opportunities.
• New technologies. Innovate Level organizations have a strong commitment to explore new market opportunities. This commitment provides them with more flexibility in exploring new cutting edge technologies, pushing the envelope of existing capabilities, and pioneering their own new methodologies and concepts.

Knowledge Process: Managing Constant Renewal

• Degree. In addition to the well-defined processes that provide cross-functional collaboration at the Enterprise Level and optimization at the next level, the Innovate Level organization adds new processes and policies for managing innovation.

  All information types, measures, and experiences are applied to develop insights that lead to innovation. A project incubation process ensures the growth of many new ideas and moves them quickly into prototype and pilot stages. The results of innovation are routinely managed, evaluated, and communicated. The innovation pipeline is analyzed just like a portfolio of risk. The organization always understands such issues as technology readiness, potential barriers, and the impact of a new project on existing processes.

• Consistency. Alignment with enterprise goals is a given by now. Beyond mere consistency, Innovate Level organization processes are self-learning and self-tuning, able to automatically capture and share best practices, benchmarks, and experience. Only by understanding the full context and impact of historical actions can an organization identify early indicators of success or failure, and collaborate on options by tapping the knowledge of the entire organization. Individuals make effective decisions that apply past knowledge as part of a strategic learning loop. Innovation Centers of Excellence are common to support the organization's aggressive innovation strategy.
• Metrics. New metrics reflect the importance of innovation, such as revenue from new ventures, the number of ideas at various stages of the development process, the time from idea to launch, and the projected value of new ideas in the pipeline.
• Governance. Innovate Level organizations have a more comprehensive and mature set of governance policies because their information management requirements are greater and more dynamic than any other level.
• Outsourcing. These organizations have a strong focus on evaluating their existing line of products and services and exploring new business opportunities. This process will enable them to explore outsourcing as one of many options to restructure their current offerings, or in developing their new products and services.
• Change management. Innovate Level organizations are very adaptive and willing to change course as they are driven by the innovation and the need to explore new business opportunities. This attitude creates a culture that not only expects change, but also embraces it.

People: Creative Collaborators

• Skills. In addition to the people needed to run and optimize the business, the organization attracts and rewards individuals who can synthesize information and ideas from multiple industries and interpret these to propose new and viable ideas. In short, people are expected to think like entrepreneurs: Hungry ones. These people are hard to find, but the organization has made an ongoing commitment to hiring and retaining them.
• Motivators. This organization provides a stimulating environment for creative thinkers who like to challenge old paradigms and work outside the box. In this dynamic environment, anyone in the organization can bring a new idea to the table.
• Dynamics. The Innovate Level is truly a melting pot—efficiency experts mixed with creative thinkers. However, differences in background, experience, and knowledge are embraced and encouraged. Collaboration is all the richer when the participants bring unique perspectives to the table. Cross-functional peer groups continue to play a key role in an individual's day. Peer groups are always looking to broaden the diversity of the team—all the better for the most vibrant brainstorming sessions and the most creative ideas.

Culture: Entrepreneurial Innovation

• Rewards. Individual intuition and innovation are supported by a culture of inquiry, cooperation, and experience. The culture rewards creativity and drive and does not punish failures. Perhaps only 1 idea in 10 will be funded for further development and 1 in 100 of those actually brought to market, but that idea will be brought quickly from concept to fruition. This momentum provides a gratifying work experience for achievement-oriented teams.
• Adaptability. Proactive change—even “revolutionary” cultural change—is constant. There is an atmosphere of business tension in which competitive and market information constantly stimulates inventive thinking and action. The Innovate Level environment requires employees, customers, and suppliers to continuously contribute and evaluate new ideas. As with Optimize Level organizations, change is fundamental—not only accepted, but expected.
• Collaboration. Self-managed teams dominate the landscape. Collaboration is sophisticated. Diversity of experiences among these cross-functional teams leads to great originality. The culture of innovation accepts that failures are inevitable and used as learning experiences. The results of these learning experiences are documented and shared as enterprise knowledge, further developing the corporate culture.
• Innovation. Strategic thinking is viewed as visionary at the Optimize Level. It is expected at the Innovate Level. People think like out-of-the-box geniuses but act like team contributors with a common end goal. The organization embraces even the most outrageous new ideas, because it can accurately forecast the potential of new ideas and manage risk to within tolerable levels—while continuing to manage existing business.
• Internal collaboration. Innovate Level organizations are even more aggressive and dedicated to leveraging their collective talents and skills just like organizations. The difference is in the primary focus. In Innovate organizations, collective talents and skills are not only used to solve business problems, but also to explore new ideas, products, and services. These organizations strongly encourage the employees and business units to mobilize their collective talents to look for new market opportunities to launch new products and services. Key stakeholders from a variety of disciplines frequently participate in innovation Centers of Excellence to combine their collective talent to support innovation.
• Analytical thinking. The use of analytics is an essential core component at this level as the organization focuses on exploring new products, services, and markets. Analytics are used to understand customer needs, behaviors, and propensity to buy new products and services. External market information is integrated with internal data to provide comprehensive information to enable the application and validation of assumptions, models, and predictions. Information from partners and suppliers is also analyzed to connect the dots and produce a comprehensive analysis of potential new products and services.
• Social responsibility. Innovate Level organizations are not only able to execute their strategies to address their social responsibility and sustainability, but also have the opportunity to address their social responsibility and sustainability goals in the design, development, and marketing of new products and services. Furthermore, these organizations may use their customers' awareness of social responsibility and sustainability concerns to identify new products and services.