ERP is mostly a transactional technology; it keeps track of where your inventory is, who your customers are and so on. Optimisation of your supply chain is analytics. Some ERP vendors have begun over the last several years to supply some optimisation tools, and advanced planning. However, it doesn't mean you don't need people to help address those issues. A lot of companies have found that when they put in supply chain optimisation tools, they didn't really have the skills to manage the models effectively and tune them for their own situation.
Is business analytics an offshoot of knowledge management?
I always view the two as very much related. I think of analytics as a kind of knowledge derived from data, a very important aspect of knowledge to address, but I think it's fair to say, most of the people who do KM within organisations are not the same people who do analytics and they don't really think of it themselves as being involved in analytics. KM is textual; it's kind of like lessons learned, sort of stuff. Analytics is more data-oriented and the two don't come together in more cases.
What should CIOs be prepared for?
There's a variety of roles they can play. At the minimum - they're the primary custodians of data - they're going to be asked, "Can you supply more data for analytics?" Which gets you into issues around data governance and master data management and all those very difficult problems that IT organisations are wrestling with. I think the other extreme is, you have organisations like Proctor & Gamble where the IT function effectively owns the analytical human resources of the organisation. It doesn't have to be that way, but it's a perfectly viable place for analytical people to reside, if you're trying to take an enterprise perspective on analytics. That probably means that you've got to pull people together, at least create a centre of excellence for analytics, and in a number of cases that report to the IT organisation. In P&G, they've renamed IT to - I think they call it "information and decision solutions" now - which suggests they are supporting decisions in much more ways than they used to, and at the same time they outsourced their basic provision of IT to other party which in turn frees them up to concentrate on how people use the information effectively. I think we'll see more and more of that happen. Certainly at the minimum, the companies that I work with, who are analytical competitors, there's always very strong partnership between the business side and the IT side on analytics-related topics.
So, should the CIO be someone who also wears a business analytics hat?
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