Magazine Spring 2011 Research Feature

How Fast and Flexible Do You Want Your Information, Really?

Almost all executives want more and faster information, and almost all companies are racing to provide it. What many of them overlook, though, is that the real aim should be not faster information but faster decision making — and those aren’t the same things.

Thomas H. Davenport and Jim Hagemann Snabe Reading Time: 17 min 

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Fast Information
We should aim not for faster information but faster decision making — not the same things.

In an era in which we can search the entire Internet in less than a second, expectations for the speed and flexibility of information retrieval within companies have risen dramatically. However, access to corporate data in organizations is rarely as rapid as an Internet search. “Why can’t I get information on our sales just as quickly as I can search the Internet?” is a frequently overheard complaint. That frustration has led many organizations to try to speed up the delivery of data and analysis, particularly in the context of decision making (typically described as “business intelligence,” or BI). But few organizations have reached an optimum with regard to how fast important information reaches in boxes, desks and brains.

Lack of information flexibility is another common problem. While standard reports can still be useful, as the amount of information in companies grows it becomes increasingly difficult to anticipate all information desires and delivery frequencies ahead of the need. Consulting companies that study information consumption routinely find that more than half of all standard reports aren’t being used by anyone anymore. Inflexible standard reporting means not only that paper is wasted, but that an even more valuable resource — executive attention — is misdirected.

Slow and inflexible information formats aren’t just minor annoyances. They can lead to major business problems. If organizations don’t find out quickly that, for example, a decline in sales has occurred with respect to a particular product or geographic region, they can’t address the problem quickly. If they don’t know that they have an issue with manufacturing quality, they can’t fix the production line. Slow information also can lead to issues of accountability and morale. As one European CEO told us, “If we have faster information we can make faster decisions. If we make faster decisions the performance increases — and it did in our company when we speeded up the information. But people lose interest when the lag time is long.”

To understand the problem and some potential solutions to it, we conducted both in-depth interviews and a survey of senior executives. (See “About the Research.”) Not surprisingly, many said they wanted their information faster.

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About the Authors

Thomas H. Davenport is the President’s Distinguished Professor of Information Technology and Management at Babson College in Babson Park, Massachusetts, and research director of the International Institute for Analytics. Jim Hagemann Snabe is co-CEO of SAP AG, where he oversees its strategy, governance, corporate development, innovation, products and solutions development as well as communications and marketing.

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Comments (7)
alsawafi
In my view the article addressed very important topic that most of companies neglect it.

The section which talks about why internal information can be slow and flexible, the author talks about a lot of factors which affect the information delivery time.  One of the most important factors that could affect is the security process involved in delivering the right information. Every corporate has a policy which entitles a individual to access a restricted set of data and only those data can be and should be accessed by them. So the process in identifying the privileges a individual or a team has on a particular set of data often delays the process of delivering data on time.

Another aspect of information delay is due to the underlying infrastructure which is not covered in this article. A poor infrastructure could be lack of technical resources, right people involved and the skill set of the people responsible for retrieving data is another important factor that affects information delivery.
David Miller
Fast data is useful/required when the decision-making process is already established. 
Fast decisions are required when new easily-quantifiable critical information is uncovered.
Fast decisions should not result from complex or new data availibility, as this must be digested and validated. 
A systematic approach to action shoud be utilized when new data analytics appear.
Luis Sisamon
The article hits a nerve. I am always amazed when meeting a client to discuss our offering (analytical marketing services) and we are told "But we already prepare 700 reports to marketing" (I am not making that number)
 
Availability of reporting tools has "polluted" managers' life on a similar way to email; it costs very little or nothing to automatically prepare a report (or write an email) that reaches tens or hundreds of people but it takes time (sometimes substantial amounts) to follow on it and act.This is the downside of digitalization of our lives.
 
Few managers are prepared to follow a Zen approach where less is more, and focus on the outputs of the analytical process and not on the inputs. These are nothing else than the signs of a bureaucratic organization. 

We may be getting close to a Schumpeterian revolution where the defining factor will be an organization's ability to focus on what it really matters and filter out the noise.
jeff johnston
Key operational and strategic information IS available at search speeds.  The key point is not all source data elements. Analysis. Metrics or insights have the same value.  Traditional BI approaches treat all queries with equal value.  NOT SO! Business decision makers have struggled far too long with obsolete data provisioning technologies requiring extended implementation cycles.  

We are deploying advanced decision insight solutions incorporating internal and external data in a fraction of the time traditional BI solutions take. Business users need to stop accepting the status quo from their IT departments.
Gerardo Luis Rivera
This article help me in my MBA projects. Thanks to the authors and the magazine.
Tom Davenport
Bill,
I agree that BI reports often only contain internal information, and are less useful as a result. In the survey in the article, we found that some of the information that managers wanted more frequently was externally-created--e.g., customer and employee satisfaction surveys. Those are often done by external organizations. I think the key is to get important externally-sourced information into the data warehouse so it can be combined with internal data.
Bill Cabiro
There is a big difference between corporate information and Strategic Knowledge.

Corporate information usually consists of internal raw data while Strategic Knowledge is the business wisdom necessary to achieve profitable growth consistently. 

Although internal data is necessary to manage logistic or tactical areas like, supply chain, manufacturing, accounts receivable, transportation, accounts payable or customer service; it’s far from enough to perform marketing and sales management jobs effectively, namely increasing market share, revenue and ultimately net profit. 

The reason is simple, internal data is a by-product of the order entry system (ERP), designed to ship orders on time; not to build a strategic data base for marketing use. 

Unfortunately, most Business Intelligence implementations populate sophisticated BI software with just internal raw data from the ERP.  This is only half of the story because ERP data does not usually contain competitive or market intelligence. 

This is the reason why BI usually does not provide the immediate strategic analysis and direction necessary to grow the businesses, leaving Management, Marketing and Sales teams struggling to find the information they need to increase profitability.

Transforming raw ERP data into Strategic Knowledge is a slow process that most companies perform manually by exporting queries and reports into spreadsheets to run the last analytical mile.  In my experience this is one of the principal causes of the fast data / slow decision syndrome.  Fortunately it's not too difficult to fix.

Regards, Bill Cabiro