Concepts from the book, The Sentient Enterprise: The Evolution of Business Decision Making
Digital transformation within any organization is a constant process of changing and growing. You grow, you add capabilities, you mature, and you keep on learning. The Sentient Enterprise: The Evolution of Business Decision Making by is a new book by Oliver Ratzesberger and Mohan Sawhney, describing how organizations can accelerate that digital maturation process, gaining the capacity to capture, share, and leverage data to support better business decision making.
Ratzesberger has spent much of his professional career driving digital transformation at tech firms like eBay and Teradata. Sawhney is the Director of the Center for Research in Technology and Innovation at Northwestern’s Kellogg School of Management. The Sentient Enterprise combines the practical insights of a veteran business practitioner with the strong theoretical approach of a renowned academic researcher. The book works well as a short, highly-accessible primer for digital transformation of the enterprise.
As the book’s introduction explains, The Sentient Enterprise is “about how the right combination of technology and culture can transform the use of data and analytics, so that even the largest organizations achieve newfound levels of agility, insight, and value from their information sources.”
A Framework for Digital Transformation at Scale
Much of The Sentient Enterprise focuses on the importance of good governance and scalable architecture as foundations for ongoing digital maturation that can scale. Organizations can’t simply “bolt on” digital capabilities to existing, legacy data systems and expect anything but failure. To gain agility, organizations need a core system and architecture (abas ERP provides just that) that continually supports agility at scale. Otherwise, you get a “spaghetti system” of unconnected silos that leave organizations confused and lost.
Here are the five steps to digital transformation described by the authors. Of course, all organizations are different and have unique systems and legacies that will inform their digital transformation efforts:
1. An Agile Data Platform
Organizations need to make room for new ways of working by first pushing out the old, removing data silos and eliminating outmoded data warehouse structures. The old ways of “doing data” need to be retired, replaced by new mindsets and systems. If your teams are taking data out of systems and putting it into their own, non-integrated systems (data marts), and using that data to make decisions for the organization, you have a silo problem. All your people need “a single source of truth.” To get there, system architecture needs to enable data sharing, even in decentralized ways, without creating silos within the enterprise.
Data integration should offer users the freedom to iterate on data or test hypotheses, possibly through a virtual sandbox or virtual data mart, without making copies of that data. Begin by busting silos that create confusion among staff about which data is relevant and updated.
2. A Behavioral Data Platform
This next step toward digital maturation is about the type of data you collect. If you seek to become a customer-centric organization (and most businesses want to do so), you must develop the ability to capture data that’s relevant to your customers’ journey and customer experience (CX). Capturing CX data, such as social media chatter, will allow you to improve the customer experience and drive business growth.
“As we build this [behavioral data] platform,” the authors explain, “Net Promoter Scores [an evaluation of CX] and other measures of customer sentiment and behavior get elevated to mission-critical importance for the enterprise.” With behavioral data capabilities, customer-centrism and CX can become the North Star by which you navigate your business data.
Focus on a few early wins and success stories that will then inspire more adopters
3. A Collaborative Ideation Platform
The people within your organization need to share and access data in ways that allow them to develop actionable insights, supporting better decisions. You’ll want data to be crowdsourced throughout your business in a way that enables effective, data-driven collaboration. Everyone should participate in deciding what data has priority.
The authors recommend the development of digital social sharing platforms within companies. These internal social platforms might look like LinkedIn or Facebook, and they facilitate shared conversations about data. They suggest building pilot projects as a way for enterprises to learn what works, and do more of it. “Focus on a few early wins and success stories that will then inspire more adopters,” they write.
4. An Analytical Application Platform
The focus here is on analytics, getting people to access and use analytics across the entire organization. The authors bemoan the present reality where only a “select few” are given the opportunity to analyze and apply data in decision making. They call for the democratization of data analytics in the enterprise, which will require making data analytics as easy for people to access as opening up an app on your mobile phone.
We “need to bring an app-style economy from the consumer world into the enterprise,” they write. They envision a menu of data tools available to all employees that looks like the Apple store -- people can download whatever digital tools/apps they need to do their work better.
5. An Autonomous Decisioning Platform
Here we reach the final step of leveraging data for better business decisions. In a mature data operation, say the authors, many business decisions will be made by AI and algorithms while others will be flagged for human decision (with a package of relevant data sent along to support the human decisioning process).
By sharing the decision process between AI and humans, explain the authors, “people can put more focus on strategic planning and major decisions. In this platform, we go beyond predictive technologies and increasingly deploy algorithms, machine learning, and even artificial intelligence (AI) at scale.” Decisions that are best made by algorithms will be made by algorithms, while more complex, nuanced decisions will get channeled to people.
The Sentient Enterprise provides a practical, actionable framework for driving digital transformation. As in all change management processes, achieving digital maturity is about having the right people, processes, and systems aligned behind the change. Some organizations are further along the digital maturity spectrum than others, but all need to keep moving forward. Having expert partners like abas ERP can support your agility and digital transformation, but having a roadmap to take you there will help. The Sentient Enterprise offers just that roadmap.
Ready for your own digital transformation? Download our whitepaper, ERP and the Digitization of Industrial Machinery Manufacturing or contact us at [email protected]