Operational Intelligence: how data-driven companies achieve operational excellence.

What is operational intelligence?

The term operational intelligence was recently coined by Andreessen Horowitz partner Jad Naous in a discussion with Frank Chen on the future of decision making (April 2019). In this fireside chat, Jad describes how businesses need to “re-tool” the way in which they make decisions now that they have started automating business processes with data (a.k.a. digital transformation). This data-driven approach was pioneered by marketing, product and engineering teams at technology companies, and is now expected to transform most other industries as well.

Let's look at an example: marketers used to conduct customer surveys and send promotions manually. Today, data-driven marketers can just connect a number of SaaS tools to get real-time insight into their user segments, as well as automate workflows based on the key events that happen (e.g. if a frequent shopper abandons his/her shopping cart, then send a discount code after 5 minutes via email). Thanks to data and automation, marketing is now one of the most efficient and valuable teams in the modern enterprise.

How does digital transformation impact your current operations?

When you start automating your business with data, you are basically changing the way you work. Your operations teams' day-to-day shifts from doing the actual tasks to overseeing the now automated completion tasks based on metrics. Next to this, operational teams now also make a lot more "micro decisions" every day. For example, if a marketing team notices that one of their competitors started a fire-sale at 6 AM, then how quickly can they react and what's the cost of that response to our business? These circumstances require frequent and granular decision making support, as well as organized communication to align with other teams and decision makers. Many data leaders (CTOs, CDOs, ...) are now actively investigating new ways to support this process of continuous decision making in support of the growing number of data consumers.

How can your organization increase its operational intelligence?

Now that we've established that organisations can drive growth, reduce costs and control risks by capturing core business events in real-time, and automating (codify) their response to these events (business processes), the question arises: how do we go about this? What should we focus on and how do we organize for this? We'll address these question in a series of follow-up blog posts so stay tuned!