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Beyond Systems of Record to Systems of Engagement

by Stephanie Buscemi | SAPinsider

October 1, 2011

A company's information has always been one of its most precious resources. But the way companies tap into and interact with that information must change. In the past, businesses invested in "systems of record" to house their structured data in databases. Now, with a growing need to be able to easily and flexibly access up-to-date information, companies need to switch to "systems of engagement," in which users can create and share data views, interacting with the information within them. In this article, you'll learn about systems of engagement and how they support the evolution of business analytics.
 

Every day, we encounter critical “moments of engagement” — points at which it’s vital to interact with others, access information, analyze it, share it, and have meaningful discussions about the decisions we make as a result of it. We encounter these moments regularly, in both our personal and professional lives. Consider two examples.

Two Days in a Business Manager’s Life

Saturday: Jill needs to buy a new car. She types her preferred carmaker’s name into her favorite search engine. This leads her to the carmaker’s website, where she can design the car of her dreams and see a price based on the manufacturer’s list value. The price is beyond her budget, so she reaches out to some friends via IM and Facebook to see if anyone has received a better deal. An old friend recommends a discussion forum for car aficionados. There, she sees an online ad for something very close to what she wants — at a much better price. She then navigates to her bank’s website to see what kind of loan she can prequalify for. Only then, fully armed with information, does Jill enter the dealership, ready to negotiate.

Wednesday: During Jill’s work week, she’s about to meet with one of her key customers to discuss a major deal. For bargaining leverage, Jill would like to know exactly how much business her company already does with this customer. Unfortunately, she has no easy way to get that information. Jill also knows that the customer’s firm just hired a new CFO who has done business with her company before. Jill would like to know if anyone in her organization has an existing relationship with that CFO. But she has no easy way of getting that information either. Jill also heard that this customer has had several service issues that require senior executive involvement, but has no systematic way to find out which executives were involved or whether these issues were resolved to the customer’s satisfaction. Jill has access to the customer relationship management (CRM) system, but short of wading through every service request and opportunity record, she can’t determine what information is still relevant. She thinks there’s an analyst in sales operations who can track down all of this information for her, but not before she’s due to meet the customer. Across the board, Jill struggles to get the information she needs.

These two scenarios demonstrate a major challenge — and a giant opportunity — for enterprise IT. In the past, businesses invested in deploying “systems of record” for structured data in databases. To tap into this information, they built massive warehouses of offline data from which they once hoped to mine nuggets of insight, but which are now too outdated to do anything but support scheduled reporting and standard dashboards. Moreover, the UI technologies that have been deployed in parallel with these systems of record were designed prior to the explosion of consumer IT tools, so there is a gap between Jill’s powerful experience as a consumer and her frustrating interactions as a business manager. 

To bridge this gap, businesses need to move beyond systems of record to systems of engagement. In a system of engagement, users can create views of data and share those views, indicating whether the information within them is factual or directional in nature. A system of engagement allows you to look at all relevant information, consider its value and trustworthiness, and make recommendations accordingly. In this new paradigm, business users become fully empowered to gather and analyze their own data, but with corporate infrastructure and safeguards. 

So how will this evolution happen?

Business Trends That Will Force Change

Two business trends will force enterprises to renovate their IT resources. The first is the rise of the Internet and social media, which affects where and how companies engage with customers. In today’s digitally mediated environment, companies have just a brief window of opportunity to modify the transaction and make it more productive. All successful digital franchises make heavy use of algorithms to increase their return on these digital interactions. For example, Amazon.com presents “frequently bought together” items to increase the total number of items sold. While this is not a new trend for consumer sites, we now see a flurry of offerings arriving in the market trying to address this issue for enterprise IT.

The second trend is collaboration, which affects how enterprises interact with each other. Enterprises want to empower their tactical and operational business users to make more consequential decisions during critical moments of engagement. This drives the acceleration of analytics toward real-time, situation-specific analytics. This helps business users to collaborate internally and externally with customers and suppliers, and to make critical decisions at the point of contact. Moving forward, all companies will need this level of real-time data access to drive decision making.

The opportunity for enterprise IT, then, is to make this real-time data available to all business users while reducing risk and latency. The challenge is finding those moments of engagement that have the most immediate impact on your business, and working with business leaders to support those moments first (see sidebar).

Here's a quick look at some example moments of engagement in which IT can help ensure success through systems of engagement:

  • When executive management makes business-wide decisions around portfolio investment priorities, mergers and acquisitions, staffing levels, and organizational structures
  • When line-of-business managers determine spending priorities for the coming year, make investment decisions, optimize supplier engagements, react to market changes, or reallocate headcount
  • When front-line managers make decisions around operational exceptions, direct production planning, personnel recruitment, pricing/discounting optimizations, and supplier negotiations

What Does SAP Bring to the Table?

SAP is committed to delivering the first systems of engagement to help users collaborate, decide, adapt, and operate better with tools that leverage existing systems of record and are optimally delivered. We do this with a three-pronged approach:

  • Collaboration capabilities enable teams across business networks to address the ad hoc work needed to drive real-time problem solving, strategizing, and decision making.
  • The process suite overlays workflows with a precise set of analytic metrics to support performance improvement and risk management.
  • The analytics suite focuses on the full breadth of analytical capabilities — from basic reporting to sophisticated statistical modeling and proactive alert delivery — which in turn drives yields in high-volume transaction processes.

On top of this, SAP will add and extend its newest collection of capabilities that focus on social networking and unstructured processes. The SAP StreamWork application, for example, will provide a standard interface so that both SAP and third-party applications can connect to a user’s business context in a way that aligns with his or her work.

To learn how one company is embracing the power of business analytics, see “Celestica Stretches Its Business Analytics Capabilities” in the October-December 2011 issue of insiderPROFILES.

It Starts Now

Evolving from business intelligence to business analytics starts with understanding what’s happening now, what’s the next best action to take, and what is likely to happen as a result. Remember Jill? With business analytics, she can have the same experience in the office on Wednesday as she did buying a car on the weekend. The time is ripe to invest in your organization’s long-term growth. By providing a system of engagement, you’ll enable your users to make key decisions in real time. Start looking at the technology requirements and invest in a business analytics foundation now, before your competition does. Learn more at www.sap.com/index.epx#/solutions/business-analytics. 1

Stephanie Buscemi (stephanie.buscemi@sap.com) is the Group Vice President of Marketing for Business Analytics at SAP. Stephanie is responsible for go-to-market plans and product strategy for SAP BusinessObjects business analytics solutions. Her recent book, Driven to Perform, is a resource for all business professionals, showing them how to “close the loop” on strategy, execution, measurement, and improvement. Stephanie holds a Bachelor of Arts degree from UCLA.

1Note: This article is derived from “Speeding Insight, Decisions, and Action at Critical Moments of Engagement: Boosting Performance through Business Analytics” by Philip Lay and Geoffrey Moore of TCG Advisors, LLC. [back]

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