Business Event Processing
Build an event-driven business culture to move toward 'right-time' operations
By Peter Schooff, Contributing Editor, ebizQ
EDITOR'S NOTE: In this Q & A, analyst Janelle B. Hill speaks with Peter Schooff on how and why to establish an event-driven business culture. Hill is a vice president and distinguished analyst at Gartner Inc.; Schooff is contributing editor at ebizQ. Their conversation, excerpted from an accompanying podcast, has been edited for length, clarity and editorial style.
ebizQ: To start, how important is it for companies to develop event-driven business cultures?
I think it's quite important for a lot of different industries. It really depends on to what extent the business itself, the daily operations, are really subjected to more disruption--especially from external events these days--than they used to be.
So for some organizations, I think, the issue may be more pressing than others. But overall, in today's global economy, where companies are very geographically dispersed, we're really running more and more towards 24/7 real-time
operations, which almost by definition means there are many more events that are going to hit you all the time.
ebizQ: What would you say are the keys for a company to achieve an event-driven culture?
That's probably the hardest part to change.
For example, the way managers work today is not real-time. They're largely managing by looking in the rearview mirror at reports that are old. They might be only an hour old. But generally, our managers rely on information that's already past and completed, which means that they're only reacting at best, and can't get into a proactive approach and anticipate impacts by seeing events earlier and anticipating what the impacts of those events are going to be.
Beyond just changing how we generate information from just traditional [business intelligence] and reporting type of techniques, and getting into more proactive and predictive technologies, from a cultural perspective, I think there's some education that has to happen to help our managers realize how hampered they actually are to function in a more event-driven environment…
The overall culture really should change from a very command-and-control, top-down prescribed approach to one that is much more collaborative, much more empowerment-oriented. [This is] where the line workers, those individuals that face our customers or our partners day-to-day and directly touch the customers day-to-day, should be more empowered to make operational decisions in response to events to better impact overall outcomes.
Fostering that kind of behavioral change is going to be a big cultural challenge. I'm pretty convinced that motivational posters on the wall are not going to do it. One of the more interesting techniques that surfaced over the last couple of years to drive a culture of empowerment is gamification.
ebizQ: Very interesting. What role is analytics going to play in this event driven culture?
will play multiple roles. Analytics may initially provide the evidence for building a business case to business leaders themselves for why becoming event-driven is even important.
Our senior managers may not really know quantitatively how many exceptions there are in any process domain, and certainly not in an aggregated view. What we collect today are exceptions.
Even just looking at the normal exceptions from our software applications and highlighting that to management will give them a better idea as to what the state of operations is today, to what extent our processes are out-of-date, out-of-sync with the reality of daily operations. Then, by the way, how are we handling all those exceptions, and what about the exceptions we don't even know about? So, for me, that's really the first role of analytics.
The second opportunity for analytics is really using them to do actual pattern recognition. [You] set up listeners, essentially, on your business processes and then use analytics to aggregate, correlate, filter, sort that data to surface up what might be a pattern that warrants some real-time attention to really surface up the event and maybe present it to a decision-maker or a line worker who can proactively take some action on that.
ebizQ: You've already touched on this a bit, but how important, then, is real-time in an event-driven company?
At Gartner, we use the term "real-time" a little bit loosely. I might call it "right-time." It's definitely relative to the industry, and to the process domain, and it really has to be gauged to the normal cycle time within that process.
For example, if we're in stock trading, if we're in that business, real-time is really pretty close to real time. And if you were instrumenting your environmental to listen for security breaches or hackers, for example, then the window of opportunity to respond to that event is pretty small. In a different business, the same event--the hacking or a security breach--the window of opportunity to respond and minimize the disruption might actually be bigger.
ebizQ: What would you say are the best practices for adopting business processes to support real-time operations?
The first best practice is really to understand how you are measuring the performance of the process, not just the activities. Are you measuring the end-to-end process performance? And then secondly, look at and start to classify what are the events that can disrupt operations in such a way as to negatively impact that outcome, that goal, that performance metric. Look at your known exceptions and find out how many there are.
I've seen many industries where it seems like the exception has become the norm, not the "happy path." If we took, for example, a mortgage origination, I think every mortgage now is an exception. Every single one, every single request. is dealt with in a unique fashion, not through a standardized routine process.
Then once you have an understanding of how disruptive the process is, then you can began to use some of the newer technologies to instrument your process, to get the signals, to apply the analytics. You can really start coordinating the flow of work across your organizational silos for a more integrated holistic picture and [then] decide what's the appropriate actions that would be taken given particular circumstances.
Some of our research talks about the idea of creating business scenarios [saying] "Should this event occur, invoke Scenario A as the appropriate response," or "Should a different event occur, invoke Scenario B." You have those potentially automated workflows as scenarios of actions to take literally stored in a repository to, again, accelerate the response time within the organization.
That's all great if your process is already largely automated. If your process is very manual, it's going to be a lot more difficult. Ironically, the smallest companies, where processes are largely manual, are the most adept at doing event-driven operations. Size matters when it's 20 people in a company. It's the order of magnitude, obviously, to coordinate the response among that many people versus 20,000 employees.
ebizQ: Indeed. Now can you give me some real-world examples of companies benefitting from this?
Sure. There are a couple we've written up in a variety of formats. One is TXU Energy, a utility provider, who's instrumented a number of processes for better insight into real-time operations.
Another one is the British Airways Authority, which is using, again, a lot of instrumentation on their real-time operations to better handle incoming flights and the coordination of the crew and the food and other aspects of operations. They even now have better visibility from when a plane is just entering the airspace and they can actually see it arriving. Again, they can see much earlier where it's coming so that they can begin to better coordinate the ground resources.
There's actually quite a view published case studies. I'd recommend even looking at the websites of some of the leading vendors in operational intelligence or what Gartner calls "intelligent BPM suites." Operational intelligence involves technologies more focused on the instrumentation, listening to your existing automated processes, correlating, aggregating the data, presenting a dashboard.
In contrast, an intelligent BPM suite brings the analytics into the context of the workflow management. But either one of those groups of vendors, their websites have a number of published case studies.
Do you work in an event-driven business environment. If so, how's it working? If not, why not? Let ebizQ's editors know what you think. Contact us at editor@ebizQ.net.
About the Author
Peter Schooff is a former contributing editor for ebizQ, where he also managed the ebizQ Forum for several years. Previously, Peter managed the database operations for a major cigar company, served as writer/editor of an early Internet entertainment site and developed a computer accounting system for several retail stores. Peter can be reached at email@example.com.More by Peter Schooff
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