Enterprise resource planning may not be going the way of eight-track tape but its days leading corporate planning may be numbered. Newer, more responsive strategies are taking over, according to a senior analyst with Forrester Research Inc.
The new approach, according to Frank Gillett, is called frontline decision making. During his presentation at the CIO Summit in Toronto in early November, Gillett spoke about the need for businesses to respond and make decisions more quickly to maintain a competitive advantage.
Essentially, the strategy entails automating “frontline” decisions. Forrester defines this as “self-service access to information-rich decision processes that optimizes business operations and relationships.” Decisions would be made at all management levels but with increased interactivity between them. While overall strategic planning will still be done at the executive level, decisions that enforce strategic policy would be made by knowledge workers, business analysts and department managers. Operational fine-tuning would be performed by line managers, associates and clerks; people with closer day-to-day relationships with customers.
This will allow conclusions to be reached on the spot, instead of collecting information in one place and going elsewhere to make the decision. Gillett said this will keep strategy in tune with today’s fast-paced Internet economy.
There is a need, across entire enterprise structures, to increase workers’ ability to act “on the fly” and to respond to customers needs and demands, he said. “They (line managers, associates and clerks) will have the most current information and be able to respond on the fly and not just rely on their long experience and happenstance knowledge,” he said. “[Frontline decision making] will have the ability to support not just finding information but making the right decisions in the right context,” he added.
“We believe in optimizing a business – not just finding out what is happening but is happening in context to what your (corporate) goals are and what the choices are for taking action,” Gillett said. The goal is for companies to make the right decisions at the right time.
Internet and e-business has accelerated an already fast moving business environment, according to Forrester. This change of pace means strategic plans go out of date within months. “You want to be able to make sure that the strategic plans that the executives set are rolled back into the operational level so that everyone in your organization understands what the goals are, how their daily actions can influence [business, so they can] take action appropriately, even as the business context changes, rather than once a year as strategic plans roll out that are set in stone.”
Data analysis applications will drive frontline decision making, but it will be two to four years before the software is fully developed to fill this new role, Gillett said.
“What analytic apps, in their current form today, do is put the analysis in a business context, like planning, like personnel allocations, like customer service levels, and make it possible for companies to just take this standardized analysis application, plug it into their existing data and immediately see their data expressed through specific analysis reports,” Gillett said in a subsequent interview.
Today’s analytic applications have value because they can get a company to focus on a specific problem quickly, Gillett added. Turning that process into frontline decision making will add the ability to take action in a given situation. For example, resources for a specific project could be increased or a delinquent customer could be cut-off.
Asked if this will be a tough sell to senior executives tired of hearing about one more software panacea, Gillett responded, “Sure, the cynicism will be there for a while but I think analytic apps, out of the box, start in a better situation because they are a solution, better than traditional data warehousing, even better than ERP.”
And ERP’s future? “ERP, while important, recedes into the background as a basic business enabler.”