Section 2. The Smart Enough Systems Manifesto

The business world has never been more complex or changing more rapidly than it is today. Organizations trying to survive and thrive must act smarter, yet their information systems are not smart enough. They fail to make the right decisions or fail to make any decisions at all, exposing the organization to risks and causing it to miss opportunities. This dilemma leads to the manifesto, a cry for systems that are smart enough for today’s business world and the even more complex one coming tomorrow.

Operational Decisions Are Important

Organizations¹ are perceived through the lens of the decisions they make.

• Some decisions are major (which countries to do business in) and some are minor (what to offer as a cross-sell to a customer on the phone).

• Organizations make far more decisions than they think because they mistake a collection of minor decisions for a single, more major decision.

• An organization interacts with an associate² (customer, supplier, distribution agent) and makes a decision about that interaction every time it sends a letter or an e-mail, makes a phone call, serves a Web page, prices a product, and so on.

• These operational decisions are made in huge volumes by all but the smallest organizations, whenever and wherever those organizations operate.

Lots of small decisions add up.

• Small improvements in the way minor decisions are made have a major effect over the course of many decisions.

• Organizations are much better at recognizing major decisions than minor ones.

• Organizations often spend a lot of time and effort making sure they make major decisions correctly.

• Nevertheless, the cumulative effect of many minor decisions can mean the difference between success and failure.

• Organizations are often unwilling to invest in improving a set of minor decisions, at least in part because they don’t recognize the value of those decisions.

All decisions an organization makes should be managed as though they are deliberate.

• The recipient of an organization’s action regards the action as the result of a deliberate decision the organization has made.

• Regardless of whether recipients like or dislike a decision, they assume it was deliberate.

• Most organizations don’t act as though this is the case, allowing decisions to be made at random by aging information systems or poorly trained and informed staff.

• Loyalty to, and a good opinion of, an organization—as well as the quality of experience when interacting with an organization—are affected by these decisions.

Operational Decisions Can and Should Be Automated

High-volume, operational decisions can and should be automated.

• High-volume operational decisions can be identified and automated successfully.

• Automated decisions can be

• Precise, because they include expert judgment and learn from past successes and failures

• Consistent across channels, geographies, time, and associates

• Agile, in that they can be changed to react to new ideas and new opportunities

• Carried out quickly to speed processes and allow organizations to operate at the pace their associates demand

• Made for the minimum cost required to make good decisions

• None of this automation requires science-fiction technology. You can do this and you work with organizations that do it already.

Traditional technology approaches won’t succeed in automating decisions.

• Current business intelligence is focused on delivering reports and hindsight to knowledge workers, not on making better decisions at the point of contact.

• Existing “legacy” systems with hard-coded decisions are too hard to modify quickly in a rapidly changing world.

• Business users can’t control or even understand the decisions embedded in systems built with standard programming tools and approaches.

• Enterprise applications don’t focus coherently on decisions and don’t allow the decisions they do automate to be managed effectively.

• Business process management systems, event-driven architectures, and service orientation aren’t sufficient to properly automate decisions, as they lack a coherent focus on those decisions.

The overall effectiveness of automated decisions must be measured, tracked, and improved over time.

• No organization is static, no market is static, no customer base is static, and no competitor is static.

• In a rapidly changing world, no decision remains optimal indefinitely, no matter how much has been invested in making it.

• Only measurement, constant improvement, and ongoing revision of decisions in the face of changing conditions can be relied on to ensure effective operations in the future.

Taking Control of Operational Decisions Is Increasingly a Source of Competitive Advantage

• As the world becomes flatter—that is, more global—the connections between organizations, their suppliers, and partners must become more automated. Therefore, organizations that can automate good decisions will have an advantage.

• As the era of mass-market products makes way for massive Internet-enabled choice, organizations must manage their business at a more finely grained level, giving an advantage to those that can focus on micro decisions.

• As baby boomers retire, organizations that can capture their expertise will have an edge over those that can’t. More of the day-to-day work will have to be automated, along with the decisions that need to be made.

• As business processes and supply chains become more electronic, using Internet technologies and electronic data capture systems such as radio frequency identification (RFID), organizations that can decide faster can move faster.

• As social networks become more important, and consumers are better informed and have more power to influence an organization’s success or failure, organizations must react more quickly and effectively to the information about them on these networks.

• Consumers, employees, and partners increasingly want to do more for themselves—to self-serve—meaning that organizations wanting to deliver excellent service must make decisions when their associates want to, not when the organizations wants to.

• The pace of change keeps increasing. Therefore, successful organizations will be those more adept at changing their behavior quickly, so the way they make decisions can’t be static.

• As organizations become more electronically connected, data volumes continue to grow. Organizations that find ways to turn that data into useful insights and improve their decisions will outperform those that don’t.

• As an always-on, interconnected world becomes a reality, organizations must operate so that decisions are made and appropriate actions are taken around the clock.

• As competition becomes fiercer and profit margins smaller, successful organizations can squeeze value from their transactions by managing risk and opportunity more effectively and at a more granular level.

• As government regulations and social justice issues grow more complex and more important, so organizations must demonstrate compliance in all their decisions.