Information Supply ChainNov 23, 2009
This is not a new thought. Over the years many people have thought about the information moving within an enterprise and created analogies to supply chains. This is an attempt to think independently on information supply chain.
Information Supply Chain, in my opinion, is to look at enterprise information from the perspective of a supply chain professional, with data replacing materials and goods. Once the supply chain is visualized and defined, it is possible to analyze value additions, optimize information flow and implement better governance.
From this perspective, applications in an enterprise IT landscape performs three functions. They produce data, consume data and exchange data. All applications in an enterprise perform at least one of these functions. There are two ideal scenarios possible. First, a self-contained enterprise application, in which the application performs all three functions (probably exchange is redundant here), and does not require data from any other application. ERP software typically try to achieve this ideal state, but falls short often. Second, all applications perform exactly one function. Some applications only produce data, some consume, and some applications are created to facilitate exchange between producers and consumers. This will help to achieve a simple one way flow of information from producers to consumers through agent applications. Unfortunately this too is not a practical scenario.
‘Enterprise applications can thus perform the role of a producer, agent or consumer. In most enterprises the information supply chain is a secondary supply chain. Unlike a manufacturing or retail supply chain, information supply chain does not produce value directly (an exception would be those companies whose primary business is to move, integrate, process and distribute data). Production of data therefore does not require to be stimulated, it is produced as part of business activities. Here is the second difference between a traditional supply chain and information supply chain. In most cases data is produced without an explicit demand.
Demand and supply are two of the key concepts in supply chain. In the case of information supply chain demand becomes the key driver, as the production of data is not controlled. The logistics aspect of the supply then becomes important in an information supply chain. Enterprise information flow diagrams can reveal the data flow between different applications and help plan streamlining. Once the data movement and data processing costs are worked out, it is easy to optimize the information supply chain, decide on warehousing and archiving strategies and define impact and service levels for data availability for various consumers.
Data can also be categorized, such as raw data and processed data. Once the processes and transformations of data are identified at the enterprise level, it is then possible to centralize such common transformations and distribute processed data to consumers. Data linking, standardization, cleansing, enrichment are examples for such transformations. Such transformations are, in a way, value additions to the raw data and there is a cost associated with those.
Information Supply Chain is only a perspective. It does not bring in anything new, but a different way of looking at how the data is produced, exchanged and consumed. This perspective will help visualize the information flow, reveal a few bottlenecks and improve efficiency information technology implementation in an enterprise. There will be a logical and intuitive way to look at the flow of information which will improve the visibility into the maze of IT systems and thereby better governance.