Next up in this transformations series is the sixth enabler: sense and respond systems. These systems are critical to the transformation agenda, as most of the disruptive technologies likely to impact the enterprise in the next decade have data at its core. The resulting data explosion promises to complicate information management for most companies. As the speed of business accelerates and the amount of data flowing through company ecosystems expands, the need to sense stimuli and enable a real time response intensifies. Fortunately, rapid advancements in the price and performance of technology make realizing this sense and respond paradigm achievable and economical for a wide range of use cases – but this is arguably one of the most difficult components of transformation road maps.

With the growth in available data comes an unprecedented ability to drive business outcomes. But a linkage must be made between data and the insight required to drive those outcomes. This data-to-insight-to-outcome mapping is a critical first step in building sense and respond systems. With this mapping defined, advanced analytic technology will drive levels of sophistication, speed and accuracy previously unachievable. The drivers behind the need for sense and respond systems are:

• The overwhelming availability of insight shifts competitive advantage to those that harness it – the insight potential of data flowing from unstructured sources, social channels, cars, appliances, etc., provides an unprecedented ability to drive effectiveness, efficiency and outcomes. Leaders will harness this insight to create competitive advantage and a competitive pressure for others to follow

• The timeliness of decision and action is growing more critical – over the next decade, sense and respond is driven by the need to make rapid and optimal decisions, take timely action, and effectively engage with the ecosystem. Whether it’s failing fast, closing a deal, course correcting in real time, or delighting a customer, this critical driver is at the heart of many transformation agendas

• The complexity of value ecosystems and the need for effectiveness – as ecosystems grow more complex and value creation involves more stakeholders, effectiveness is an imperative. The overwhelming amount of data flowing through these ecosystems is challenging to harness and further complicates efforts to operate with speed and agility

• The growing need for fast and agile Enterprises – future operations require a speed and agility not found in most traditional companies, pushing transformation programs to enable digital enterprise characteristics. The enterprise will embrace sense and respond systems as a foundational piece of future systems of engagement

• Actionable insight is growing more critical – companies are struggling to find actionable insight. Much of the data-to-insight work is delivering nice to know information, but not the type of insight that can be acted upon. Harnessing insight and enabling action is critical to driving the growth agenda, enabling future differentiation through next generation experiences, and realizing higher levels of optimization and effectiveness. This places emphasis in the next several years on more advanced forms of analytics that can deliver better, more actionable insight

These drivers will intensify over time, increasing the pressure on companies to use vast amounts of data in ways that deliver business outcomes and competitive advantage. At its core, the enterprise must shift from gut-based decisions to a data-driven culture that allows insight to guide decision making and actions. As information management moves towards a Google-like paradigm, where questions are posed and answers delivered, speed to insight is accelerated. This speed enables a sense and respond paradigm and allows for automated closed loop systems that quickly find insight and connect it to action, powering a next-best-action approach. The sense and respond component of the transformation program should address these key tactics:

• Harness real-time data flows for insights that improve decision making and outcomes – the Internet of things and the social ecosystem are two examples of real time data flows that if tapped, can improve the decisions you make, the actions you take and ultimately outcomes. This sense and respond paradigm can best be described using an IBM Watson medical example. Watson senses that a patient is showing signs of stroke and enables an immediate and proactive response. These real time data flows will grow over the next decade, as more sensors are deployed and social and mobile innovation expands

• Build the intelligent filtering required to get from data to insight – large volumes of data amount to noise unless you can quickly harness insight. Over the next decade, an ability to intelligently filter data to generate insight will evolve. Companies should focus on evolving their analytics towards a future that addresses this level of filtering. Domain expertise must be captured in a way that allows for the automated application of knowledge

• Expand the information management portfolio – when asked to describe where they are on their analytic journey, the majority of companies believe they are still at the descriptive analytics level; that is reporting on the past. The move from hindsight to insight to foresight requires speed, an expanded use of advanced analytics, and an ability to cost effectively store a larger base of data. Therefore, the information management portfolio must expand to include advanced analytics, Big Data technologies, and in-memory capabilities. This expanded portfolio drives analytic maturity to a prescriptive analytics level that satisfies the right-time requirements of sense and respond systems

• Instill a data-driven culture – easy to say, very hard to do. Companies need to evolve from gut and instinct driven decision making, to insight-driven decision making. A sense and respond system depends upon a level of trust in the insight delivered. Edge interactions will increasingly rely on this type of trust-oriented cultural shift. A change initiative should focus on this softer side of the sense and respond program

• Make unstructured and third party data a bigger piece of the insight equation – It is now common knowledge that over 80% of all data is unstructured, yet historically, companies have relied on the structured data residing in their databases to drive decision and action. Increasingly, companies must leverage the wealth of insight sitting in unstructured data. Additionally, more third party data is likely to emerge as companies consider monetizing their data assets to create new revenue streams and provide a new source of insight for the ecosystem. New and traditional sources of third party data should be considered to enhance the data-to-insight-to-outcome process

• Move towards architectures that deliver right-time insight – enterprise architectures that enable right time insight must evolve. The starting point is an event-driven SOA (also called SOA 2.0) that enables a right-time paradigm by combining service orientation and event processing with technologies such as business process management, business activity monitoring and enterprise service buses. Effective right-time interactions require context at the point of interaction, a move towards this architecture enables the delivery of this context

• Develop automated closed loop systems – computers are increasingly capable of doing jobs that were once assumed to be the exclusive realm of humans. Said another way, computers can increasingly do many of the tasks that are now done by knowledge workers. As knowledge work is automated, so too are closed-loop systems. These systems leverage knowledge and insight to automate the action side of the insight-action equation. Sense and respond systems will increasingly be represented in the form of automated closed-loop systems

• Instrument – sense and respond will be greatly enabled by the expanding Internet of Things. The use of sensors and other instruments will provide real time access to data that can be acted upon. Where feasible, companies should seek to leverage instrumentation has an enabling mechanism

• Tear down organization and data silos – I have maintained that the pace of technology innovation has driven more organizational and data silos. Sense and respond can only be effective with a holistic view of data. Informed interactions require interaction histories that in most cases are fragmented across the company. One of the key tactics in any sense and respond program is the elimination of these silos

That’s a look at the sixth enabler. For a review of this transformation series to date, here are the links to each of the prior posts:

Forcing Functions:

• Growth
• Effectiveness and Efficiency
• Differentiation
• Societal Change
• Digital DNA

Enablers:

• Structural Change
• Edge-Driven Design
• Value Ecosystems
• Next Generation Experiences
• Systems of Engagement