Why does your organisation use Information? There are two reasons: supporting your core business and compliance. How do you differentiate between these different purposes? How do you measure not just compliance but compliance efficiency?
First let’s quickly step back and set the Information Flow context for this discussion. LINQ is an Information Flow Modelling platform. Our customers use LINQ to eliminate Information Waste in the Information Supply Chains that connect sources of data to Business Outcomes. In this previous post I explained the significance of Information Waste in terms of the journey towards a transformed business.
For any organisation, the different Information Supply Chains overlap and criss-cross in quite a complex way. Depiction at a high level looks like this:
Core Business Information Supply Chains
The Information Supply Chains that support the organisation’s core business underpin the very purpose of the organisation. They should represent a key competitive advantage and must evolve to defend against disruptive competitors. So what do your Core Business ISCs actually look like? We typically see one of two main scenarios:
- ISCs that represent the way we’ve always done things… so paper and manual processes dominate. That’s particularly the case in traditional industries… so no surprises that disruptive start-ups are having a field day in industries such as the financial sector, manufacturing, utilities and transport.
- Legacy systems clogging ISCs… where the organisation has lost the ability to see the purpose and the Information Waste has risen to unacceptable (but hidden) levels. These organisations can explain what their various systems (ERP, CRM etc) do… but can’t explain how they contribute to the core ISCs
LINQ can depict these core business ISCs with clarity. Cost and Latency along these ISCs represent competitive disadvantage. The CIO of one of our customers put it this way “If we were a disruptive start-up, what would our Information Supply Chains look like? Because that’s what I want us to aspire to”.
Compliance Efficiency
Any organisation has to comply with rules and regulations. Examples of rules are things like “Generally Accepted Accounting Principles” (GAAP) that tell an organisation how to do fiscal management. Regulations might include national and industry legislation that must be complied with.
Traditional approaches to compliance are binary: you’re either compliant, or not. LINQ allows a more sophisticated approach that measures compliance efficiency.
LINQ can represent a rule set or legislation as a ‘Minimally Compliant Information Supply Chain’ without needing to see an implementation. For example, the diagram below represents the minimally compliant GAAP ISC for a small business:
The minimally compliant ISC has zero cost (because we assume each Action can be automated) and zero latency (because we can assume that each Action takes no time). Therefore an organisation can use this as an ‘aspirational state’. They can measure the current state cost and latency using LINQ and then measure the elimination of Information Waste towards this zero-cost ideal. Don’t worry that it isn’t possible to achieve the minimally compliant state – a baseline for measuring improvement doesn’t have to be attainable.
Combined Information Supply Chains
A start-up such as Lyft or Uber has the opportunity to create minimalist Information Supply Chains. They don’t have the complications of legacy systems and processes which create Information Waste.
A key aspect of this minimalist approach is to ensure maximum overlap between the different types of Information Supply Chain. A traditional taxi company for example will have almost entirely separate ISCs for ordering a taxi and taking payment. Uber and Lyft have merged the ordering and GAAP ISCs to the maximum possible extent. This eliminates Information Waste – there’s no duplication of activities and greatly reduced latency for the customer and business.
LINQ users can tag the specific ISCs that different assets (Information, Action, System and People) participate in, helping to understand how the organisation is plumbed for different types of ISC. This can then form the basis of a continuous improvement plan to streamline each type of ISC and combine them to the maximum possible extent.
