Thursday, July 29, 2010

Designing, Creating and Managing An "Information Supply Chain"

"Great companies need to design, build and manage how data will be consumed within their organization and then structure everything else around that," says Todd L. Michaud in StorefrontBackTalk ("Information Supply Chain, What It Is And Why You Need To Start Talking About It"). "Companies are starting to dip their toes into an 'Integrated Information Supply Chain.' But I am not currently aware of anyone doing it on a massive scale. Why aren’t companies moving faster? How do you take billions of retail transactions, millions of billions of social media interactions, millions of marketing impressions and hundreds of thousands of operational statistics and merge them into a set of tools that provide the right people with the information required to maximize their impact on the business? That is the million dollar question." Read Michaud's entire editorial to see where he is going with this.

You may disagree that no one is effectively tackling this challenge yet, but it certainly raises issues that transcend the normal realm "Business Intelligence" in the sense that Michaud is arguing for a much more comprehensive approach. Eric T. Peterson, Senior Partner at Web Analytics Demystified, speaking at the Internet Retailer Conference & Exhibition in Chicago this past June, stated that companies gather vast amounts of data about the activity on their eCommerce sites which must then be translated into real information that can yield insights into what works and what doesn’t in order to be useful - essentially Michaud's point, as well. But to be useful, this information must yield insights that show how well what’s working achieves results, which can ultimately lead to what top managers actually want, which is recommendations for action (see pyramid chart).
The associates to whom the analysts report (see chart below) will tend to use the data and information in spreadsheets and OLAP platforms (with everything preformatted), while the analysts themselves will use much more sophisticated statistical tools, as shown in this diagram:
But as Michaud asks, "Is it even possible to design a system where the reports [you need] can be run in a reasonable period of time?"
Most of the technology needed to create an effective "information supply chain already exist." It's finding the best ways to implement them cost-effectively and in a productive environment that remain a challenge. As Michaud admits, "For the past few months I have devoted a significant amount of my time to designing a holistic information architecture and Information Supply Chain for FOCUS Brands. Even in a midsize company like FOCUS Brands, this task has proven to be extremely difficult. It basically means we are defining each data element within the organization, who owns it (systems and/or persons), who needs it (systems and/or persons) and how change will be managed. Once we have that aspect completed, the next challenge will be in designing systems and processes to enable that information architecture."

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