Is decision intelligence the new ERP?
When I tell people I work as a product manager for a decision intelligence product, I’m often asked what it is. After some initial explanation a very common question is, “So… is it like a new ERP?”
Well, kind of.
But there’s a lot more to it than that.
How digitisation of paper records changed the world
We forget about it now, but computing truly revolutionised the world of business. Perhaps more than anything else, the emergence of electronic paper record systems changed the game fundamentally.
Unlike the decision makers running organisations in times gone by, we no longer needed to rely on endless paper records and ledgers that can easily be lost, misrecorded or defrauded. What the manufacturers of the 1950s or even management as far back as the Romans (!) would have given for computers that allowed them to keep reliable, clear records that could be accessed from anywhere and kept secure from fraudsters.
Enterprise Resource Planning (ERP) is perhaps the best example of this. It tracks all of a business’s resources, cash, assets, and liabilities, creating a single source of information, so businesses can streamline and automate large swathes of their operations.
Just as a Customer Relationship Management (CRM) system streamlines and improves customer interactions by capturing touchpoints and a Human Capital Management (HCM) system improves hiring by keeping all employee records in one place, an ERP system does the same for the financial and operational side of a business.
What is an ERP, really?
Fundamentally, an ERP – or a CRM or a HCM – system are two things at their core:
- A series of business processes codified in software, so users can execute processes efficiently, reliably and consistently;
- A database that stores every single transaction across each business process and enables those records to be retrieved, whether for analysis or downstream processes.
In the early days of the 1960s and 70s lots of companies started off innovating themselves and building ERP-style solutions to fit their specific business needs. But over time, software companies specialised in building ERP, CRM, and HCM systems that are widely used across the world today.
Why do decision makers need something more?
ERP, CRM, and HCM are all about helping people to run their organisations by making sure there are reliable records that can be accessed, analysed, and used to execute core business processes. Over time the major players have focused more and more on helping with decision making, for example by building in analytics modules, planning and consolidation systems, etc. etc.
But they can’t fix every issue, not least because it’s not what they’re designed to do.
There are two accelerating trends that existing systems are not well-suited to solve…
The first trend is the modern cliché of the exponential growth of data.
There are two actual problems with this.
One, the data that’s available is often disparate and disconnected. This is because existing systems like ERPs, CRMs, and HCMs tend only to be interested in making use of the data they themselves create. As such they only allow for departmental rather than holistic, organisation-wide analysis.
And two, the fact that there is so much data available means, almost by definition, that it’s hard to know what to pay attention to. Data is only useful in so far as it helps test some hypothesis, theory or explanatory model of the world. What the trend of exponentially growing data volumes has revealed is that focusing on the data first is actually getting it backwards. We need to focus on the decision first – the theory or hypothesis to be tested – and then to use this starting point to figure out what data will be most useful.
The second trend is the increasingly disorderly world in which organisations operate, with more geopolitical, social, environmental, economic and medical risks than ever. Organisations need more agility and resourcefulness to succeed in the fast-changing operating environment they find themselves in. Existing software systems don’t do enough to address these challenges, limiting the ability for leaders to make sound decisions in today’s increasingly complex world.
Faced with this set of challenges, most organisations are now seeking out ways to become more antifragile in order that they might flip this situation on its head and start to benefit instead of suffer from the inevitable uncertainty they will face.
This is where decision intelligence comes in.
What is decision intelligence?
Decision intelligence uses artificial intelligence and the modern data stack to solve today’s most pressing concerns.
Gartner defines decision intelligence as encompassing “ a wide range of decision-making techniques bringing multiple traditional and advanced disciplines together to design, model, align, execute, monitor, and tune decision models and processes.”
So no, it’s not accurate to call decision intelligence the new ERP.
It’s an additional layer on top of existing systems that helps organisations make better decisions. It does this by providing the capabilities to enable teams to:
Decision intelligence is taking advantage of advanced AI technologies to solve problems created by the digital age. Think of it as the next step beyond ERP, CRM and HCM systems in the use of data to manage organisations more effectively.
At Faculty, we’re at the cutting edge of decision intelligence, helping to make organisations antifragile for the challenges of the 21st century.
It’s our firm belief that no business can thrive in the modern world, let alone the world to come, without decision intelligence. Get in touch today to learn more and discover how you can use it to stay competitive.