In Information Revolution: Using the Information Revolution Model to Grow Your Business, authors Jim Davis, Gloria Miller, and Allan Russell introduce the idea of the Information Evolution Model. As I discussed in my last blog, Modeling Innovation With BI, they propose four dimensions — infrastructure, process, people, and culture — as guides for evaluating your organization’s ability to leverage information in an effort to achieve your business goals. Here, I’ll take a deeper look at these four dimensions, framing them in context of the five-level Information Evolution Model.
The model’s five levels — operational, consolidation, integration, optimization, and innovation — are hierarchical and reflect aspects of maturity across the four dimensions. Generally, companies fluctuate within different levels across the four dimensions during this evolution.
Level 1: The operational enterprise
The most common type of organization at this level is the startup. However, many small businesses and large siloed businesses operate at this level as well. The following describes key Level 1 characteristics:
- Level 1 knowledge process focuses on day-to-day tactics. This results in high variability in the access, analysis, and use of information.
- Level 1 people tend to thrive in unstructured environments. The information technicians are often self-motivated and risk-takers. They tend to strive for differentiation and recognition, which might serve a company still operating at an entrepreneurial level. However, they resist change and loss of control, which may inhibit maturing to the next level.
- Level 1 culture is well-suited for charismatic leaders and self-starters. Information management positions are structured to compete, allowing for the emergence of “information mavericks.” Job security is gained through individual control.
The manner in which Level 1 organizations share and use information is highly inconsistent. With the right talent, a business can thrive at this level up to a certain point or in a limited market. As it tries to grow, the individual focus can lead to inefficiencies, redundancies, and errors. Since little intention gets paid to coordinate silos, alignment does not play an important role. Skills in social interaction and teamwork are of little value.
Level 2: The consolidated enterprise
Organizations at this level have integrated information management within a silo or department. Typically, they’ve optimized knowledge processes to support operations within the functional areas.
- Level 2 infrastructure features all data management hardware and software designed to optimize information and decision processes at a departmental level. Departmental discrepancies and duplication of effort are common pitfalls.
- Level 2 knowledge process supports decision-making at the department level. This may result in inconsistencies and suboptimal results on an enterprise level.
- Level 2 human capital and culture dimensions aren’t managed with an intention toward integration. Teamwork may be encouraged in small, homogenous areas, but strategic and interdepartmental collaborative efforts are challenged by the organization’s competitive structure. Communication also may be challenging without the benefit of a shared vision or enterprise-level goals.
Level 3: The integrated enterprise
An enterprise-wide approach to data management and decision-making characterizes organizations at this level. Integrated knowledge systems generate value by standardizing processes that promote coordinated marketing efforts. Resources are mobilized around market and customer relationships that optimize long-term value.
- Level 3 infrastructure features a seamless, enterprisewide system of hardware, software, and networking that supports data reporting, analysis, and auditing while delivering a single version of the truth.
- Level 3 knowledge process enables the company to optimize reporting and analysis to meet enterprise-wide goals and objectives. The focus shifts from a product to a customer or market focus with emphasis on relationships and long-term value. All information access and quality is aligned and standardized. Performance management is automated. This level of interdepartmental cooperation requires highly developed communication and collaboration skills.
- Level 3 people balance departmental goals with those of the enterprise. Their holistic view and emotional intelligence allows them to contribute to and champion enterprise efforts.
- Level 3 culture views business intelligence as a corporate asset and essential strategy. Training and organizational development focus on the importance of enterprise-wide access and intelligent use of information.
As the organization realizes gains of rapid decision-making, enhanced customer relationships, and shorter time-to-market, alignment becomes crucial for departments striving to coordinate actions and achieve enterprise goals. As the enterprise promotes cross-functional collaboration, competencies in the areas of communication and collaboration are increasingly important.
Level 4: The optimized enterprise
Adaptability is the distinguishing competency of organizations at this level. The ability for constant realignment with changing markets allows Level 4 organizations to maintain a competitive edge.
- Level 4 infrastructure enhances Level 3 by linking internal business systems across the supply chain, from back-office functions through customer touch points. This enhances communications, data exchange, and connection to partners and customers across functional areas.
- Level 4 knowledge process focuses on bringing the information systems to a higher level of quality, access, and relevance. All workflow patterns are modeled across the entire information value chain to optimize continuous measurement, decision-making, and real-time analytics leading to consistent and immediate customer response. Closed-loop feedback processes ensure continuous evaluation and improvement.
- Level 4 people have many similarities to those in Level 1. They are independent, adaptable, innovative, and driven, and take calculated risks. However, their approach to the organization is more holistic. They, along with their peers, are focused on enterprise-level goals. So along with being innovative and adaptable, they must be highly skilled in the areas of communication and collaboration.
- Level 4 culture empowers individuals across the organization to take on leadership roles. Along with access to rich quantitative information, they are given the autonomy to fine-tune the business model as needed by making incremental improvements. Doing this requires clear communication of the goals and vision from top management as well as the willingness and skills to collaborate and share ideas across departments. Change-readiness is an inherent part of the culture.
Level 5: The adaptive, innovating enterprise
Innovation is the distinguishing competency of organizations at this level. These organizations continuously seek ways to reinvent and transform their value propositions. This proactive model, based on BI and creative energy, lets organizations stay competitive continuously.
- Level 5 infrastructure features an “intelligence architecture” capable of integrating and expanding quickly and seamlessly based on organizational needs. An advanced combination of analytic tools allows organizations to test and perfect new ideas in virtual environments, thus reducing time to market. Innovation is systematically fostered and supported through information access and sharing.
- Level 5 knowledge process encourages innovation at the highest levels. Extensive analytics provide the ability to model the future while minimizing risk. As a way of stimulating new ideas, organizations encourage and facilitate collaboration on an enterprise-wide basis. The entire innovation process is documented, analyzed, and communicated throughout the organization.
- Level 5 people are holistic thinkers. With a keen eye for the bottom line, they are also proactive, creative thinkers. They thrive on juggling many roles and activities. They actually enjoy change and get bored if the business becomes stagnant. They know their competitors are able to reach Level 4 with cutting-edge technology. But at Level 5, they can always outpace their competitors by continuing to innovate.
- Level 5 culture embraces holistic thinking. All ideas, even the most absurd, are examined. Processes aim to facilitate creativity and support an intuitive flow of ideas. Constant change is the norm. To support innovation, inquiry, feedback, and collaboration are embedded in all aspects of the Information Evolution Model.
According to Davis, Miller, and Russell, no organization has truly reached Level 5. Some have pockets of Level 5 competencies, but most organizations find it difficult to thrive during constant change.
Conclusions
The skills needed for success in our high-tech, global, interconnected economy are moving from the technical to the human realm. Organizations are automating or outsourcing all linear processes. Enterprise BI based on accurate, accessible, useful data is a driving force behind this shift. Innovation as a core competency lies in an organization’s ability to align its infrastructure, processes, people, and culture to progress through the Information Evolution Model.
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In today’s digital economy, if it’s linear, it’s usually automated or outsourced! Think about it: What were you doing 10 years ago that’s now accomplishable at the push of a button? Campaign management? Performance analytics? Data management and storage? Do you see a trend? So where are we headed?
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