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Software // Information Management

Building Bedrock

Successful performance management hinges on strong integration and information management.

To align business process outsourcing with performance management, build on a foundation of integration and information management.

Reducing costs and creating long-term value by improving performance are the focus of every CIO and IT department. In an attempt to reduce costs, companies are increasingly turning to business-process outsourcing (BPO), but this approach makes performance-management initiatives more difficult by adding complexity to its two technology cornerstones, integration management and information management.

Integration management is the discipline, practices, and technologies that leverage EAI, EII, and data, event, ETL, and legacy systems in batch or on-demand methods.

Integration management is under the larger umbrella of information management, which focuses on enabling the access and use of information for business purposes. It involves the entire information life cycle — from sourcing, ongoing use, and maintenance, through access and delivery management, and all the way to information modeling, quality, privacy, and profiling. The combination of integration and information management is a cornerstone of the performance-management foundation.

I have worked with many companies embarking on performance-management initiatives and discovered they don't have fundamentally sound information and integration-management strategies to begin with. At a recent discussion I moderated among more than 60 CIOs and COOs, the majority overwhelmingly believed the single biggest challenge to successfully instituting performance management was the inadequate state of their information-management systems. When you add in BPO, business processes that now reside and generate data from outside the enterprise, assessing real performance data is even more difficult.

This reality creates new challenges for the CIO and IT department responding to the performance-driven business culture that's demanding access to more information. To meet this need, IT must integrate systems. But with BPO, a significant source of information now resides outside the enterprise. This situation makes the CIO's most important asset, information, even more scattered and harder to corral. Integration management and information management must be methodically designed and managed enterprisewide if improving internal or outsourced business processes is the company's goal.

Centers of Excellence?

To address the inadequate integration and information management systems, many companies I've seen are building "centers of excellence" (using varying names). These efforts are intended to create real business value by building new business and IT "habits" that include leveraging centralized efforts and best practices to manage existing and new technology systems within the enterprise. By creating the centers, a company can reduce costs by sharing resources across divisions to execute projects more efficiently with an expert team dedicated to every IT project.

Although this approach appears commonsensical, most companies don't undertake such centers of excellence enterprisewide (if at all); instead, separate IT groups (systems architecture, business intelligence and data warehouse, application development, and application systems) continue to implement different integration and information strategies.

No Easy Task

The explosion of new systems within your IT environment since the buildup to Y2K makes methodic and strategic information and integration management tricky. Even though many organizations have simplified their online transaction processing (OLTP) and consolidated their ERP and CRM systems, the nuances of different systems and versions across an enterprise create complexities for synchronizing and integrating data efficiently.

Unfortunately, the drain on resources to maintain these systems and provide an adequate level of integration is a drag on IT organizations and defeats the competitive edge companies are trying to achieve from their performance-management initiatives. For this reason, companies are outsourcing these systems as quickly as possible. This strategy creates a bit of a catch-22 as the outsourced systems further drive a wedge between the transactional automation systems and the information systems required to manage a business.

Companies shouldn't layer all their information and performance management needs into their automated transactional systems. Organizations adopting this strategy further complicate the challenges that they already face in managing performance across business processes, departments, and organizations.

Unlocking Success Factors

Bridging the business and IT divide to improve performance isn't a simple task; cost reduction through activities such as BPO is still a priority. I advise those of you trying to determine where your IT strategy meets your business objectives to first ensure that your information-management strategy is in order. Many vendors are aligning their marketing activities in this direction, which can help when assessing current strategies.

In the area of integration management, Ventana Research is continuing to see a consolidation and simplification of required capabilities. This is more than just data integration; it also includes leveraging common methods in the same framework for batch and on-demand access to application and information sources that move beyond the traditional data warehouse environments.

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