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Why are enterprise applications so dumb?

(Posted by guest blogger, James Taylor)

In general Enterprise Applications rely on human intelligence - Humans must use dashboards and reports to learn from their data, most decisions are managed with work lists, someone has to log on and act-on work list items before a process continues, and most alerting and monitoring functions are focused on telling someone what has happened rather than on doing something about it. These applications have been built around a mindset that automates the data collection and dissemination an organization requires and not much more – decisions are left to people.

When Enterprise Applications are designed to automate a decision, this automation is typically limited in scope, hard to configure to a company’s unique approach, frail in that change tends to break it and difficult to verify or regulate.

This reliance on people for all decision-making is a serious limiting factor for the long term growth of Enterprise Applications.

  • It severely limits the ability to attain straight through processing in any but the most simple processes
  • It means that 24x7 operation requires 24x7 staffing
  • It means that improving operational, high-volume transactions with analytic insight is almost impossible.

In addition current investments in Complex Event Processing/Business Activity Monitoring will not realize widespread ROI unless systems can respond intelligently and automatically to most events and this means making decisions about how to act without this reliance on people.

Not only do these limitations prevent companies from maximizing the value of their enterprise applications, where industries already have high levels of decision automation (such as in insurance underwriting or claims, marketing, credit originations, fraud detection) enterprise applications will struggle to attain penetration without strong decision automation.

If your business uses mainstream Enterprise Applications today, you should be investigating Enterprise Decision Management for tomorrow.

JT

Visit my Smart (Enough) Systems Blog(RSS) or my ebizQ blog (RSS). Buy the book or visit the companion wiki.

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Comments

Gordon Taylor

Hi James,

Good post, but I think you have your pants on backwards. People _are_ the enterprise. They make the decisions because that's what they get paid to do. Do we really want bigger, larger and more automated enterprise software applications?

Perhaps the problems you identify in the first paragraph are problems with workflow and BPM - not problems with people.

Gordon :)

George Van Antwerp

James - I think you make good points in several of these posts about data and intelligence. That certainly was the vision for Business Process Management (BPM) and Business Activity Monitoring (BAM). In theory, you should be able to create a Balanced Scorecard, define your acceptable upper and lower control limits, define business rules if the metric is out of the range, and initiate a process.

Of course people are involved, but there are plenty of first and second level actions that can be automated especially in high transaction processes.

The other key is blending all of this with knowledge management to capture process improvement and best practices and translate those into new rules and new learnings. I have not seen many companies attacking that yet.

Timo Elliott

James,

Saying "this reliance on people for all decision-making is a serious limiting factor for the long term growth of Enterprise Applications" is a bit like saying "reliance on people is a serious limiting factor on running your business". It's true -- but it's not a very useful statement.

Will technology improvements and new techniques (like EDM) improve efficiency and automation, allowing more work to be done faster, by fewer people? Well, it has done for the last few thousand years, so it would be strange if it stopped now...

Now and in the future, "reliance on people" will be essential for the survival of the business. The more processes get automated, the more important people become.

The next generation of enterprise applications, designed specifically for business people's unstructured, non-linear processes, will improve automation by involving people MORE (e.g. using collaboration and "collective intelligence" to determine default behavior), rather than trying to eliminate them.

www.timoelliott.com

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