The emerging capabilities of these applications are crucial to closing the gap between strategy and operations in pursuit of agility.
Confronted with accelerating change in the business environment, all enterprises aspire to become agile. But a big barrier to agility at most companies is the divide between strategy and operations. This gap exists, in part, because the enterprise applications that companies rely on to run many of their processes focus on operations, not on strategy.
While these operational applications contribute greatly to the automation, efficiency, scalability, and standardization of processes, they separate users from business strategy. Changes in strategy are not quickly reflected in operations, and changes in operations are not always aligned with strategy. Operational applications do not have the flexibility to meet the demands of a frequently changing business environment.
However, a recent trend portends new directions for enterprise applications. Considerable vendor consolidation has occurred in business intelligence (BI), performance management, and decision support. Vendors of financial, human resources, supply chain, and other traditional enterprise applications have sought to broaden their footprint by acquiring companies in the BI and performance management market. IBM acquired Cognos; Oracle acquired Hyperion, Interlace Systems, Primavera, and others; and SAP acquired Business Objects, OutlookSoft, Pilot Software, and others. PwC believes this acquisition activity, the emerging focus on strategy management, and efforts by enterprises to use software to close the strategy and operations gap are leading to the rise of a new class of applications that we call business management applications.
Business management applications are distinct from operational applications. Instead of focusing on efficiency, business management applications focus on effectiveness by aligning with strategy. Instead of handling only structured data and processes, these applications handle unstructured information and messy processes. Instead of being standardized, they’re flexible, enabling the anticipation, experimentation, analysis, modeling, and management of changes, and thereby shielding operational applications from frequent changes.
Business management applications and operational applications complement each other. And with proper mediation between them, they will increasingly provide the basis for operationalizing agility. This article describes some of the technical developments that enable this trend.
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