Wednesday, February 13, 2008

Decision Management is all about People

I have seen people comparing Enterprise Decision Management (EDM) with Enterprise Resource Planning (ERP). Some question me about how can DM system add value when some one already have ERP in place. And the answer is simple, DM adds more value when there is ERP already implemented as EDM complement ERP and not compete.

ERP by its name itself suggest the planning of existing resource. It is Resource Management Business while EDM is about using the resource smartly by taking optimal decision. So DM is a Knowledge Business.

Here I am trying to challenge his hypothesis that exist in the market.

"EDM can be implemented like ERP"

This will be a great mistake. Better Software can be chosen for ERP but for EDM to be successful that is not enough. You need better people.
Many of the companies tend to buy Enterprise Analytics Software and EDM Tool, and establish a in-house Analytics division straightaway with out experienced people. This is creating two type of problems in the industry -

1. Lack of Technical Know-how
The teams are not at all capable of Analyzing Data and fail to prove the significance of the team. A good analytics team should have people with business knowledge, statistical knowledge and the relevant analytics functional experience. If one lacks, the result is unlikely to be positive.

2. Over Expectation from Board
When people don't have enough knowledge about what can be done and what cannot be done, they tend to over expect.
Most of the time, people in the Management board decide to go with EDM system to get some advantage of the system and implement it. But they are unaware of the unavailability of the good data collection system. This creates huge tension to the Analyst, if he is not well equipped with proper knowledge of Data necessity and the Analytical functions. So he fails and the team too.

So be careful while forming a BI Team, have people first and software second. Else ready for the negative ROI from the BI Team.

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