The Intelligence of Business

Originally posted on on 08/03/2007.

I use this slide (Figure 1) for presentations on SCL to explain where it fits in.

Figure 1 - The Intelligence of Business. Human/Machine intelligence continuum.
As I mentioned in my previous blog on Business Performance Management, corporations must be seen as orgamisms and treated as organisms. They have an intelligence like all creatures (mostly animals) which control a body that interacts with the physical world, and it takes in resources (revenue) to keep itself running and hopefully having excess (profit) to support other creatures (the stockholders) as well.
The attached slide depicts four stages of the intelligence of business from the least advanced on the left progressing to the most advanced on the right. The third, circled in red, shows where we are today. The blue part of the bar represents the part of the intelligence of business that is human and the green represents the part that is machine. The green is differentiated into light and dark green, representing pure data and rules, respectively. But, not only are the bars showing the percentage that is human and machine, but the width of the bars represents the size of the business.
Before computers or other recording devices such as paper, the intelligence of the business creature was 100% human. One or more humans made all the decisions for the business based on whatever was in their collective heads. With the advent of paper and adding machines, humans now had tools to assist their memories in finding patterns. This is represented by the left-most bar. However, that level of assistance is miniscule compared to the logical power provided by the human brain. Notice that the small green part is dark green, meaning the part of the intelligence of business that is machine is all data. The width of the bar is very narrow too, depicting a small business.
The early days of computers brought on a way to store and retrieve massive amounts of data (the bar second from the left). This ability significantly increased the percentage of the intelligence of business that is machine, even though it is still primarily just data. But the massive amounts of data and the ability to effectively access it greatly enhanced the effectiveness of the logical human brain. Consequently, the scale of the business grew significantly as the wider girth of the bar indicates. This is where business has been for the past twenty or thirty years.
The third bar (circled in red) is where we are headed today with Business Performance Management. We see for the first time a light green part which represents rules stored in computers as opposed to just plain data. Such electronic rules has been around, but represented a small part of the intelligence of business compared to the human part. Rules existed primarily as hard-coded logic in rigid software applications. Soft-coded rules were confined to things like configuration files, even though such files contained just "soft-coded parameters".
Now, soft-coded rules are more widespread, encoded using many technologies such as Windows Workflow, BizTalk orchestration, and especially "Semantic Web" technologies such as RDF. There are also pockets of artificial intelligence (AI) out there such as risk management at financial institutions. The proliferation of BPM adds rules through its fundamental concepts of strategy maps and key performance indicators (KPI). KPIs are business rules. They are rules that tell human (or machine) workers when they are doing well or poorly.
With BPM, the scale of business can grow significantly with encoded rules making and executing simple and not so simple decisions more efficiently and tirelessly (machines don't get bored) than most humans. The heavy logical lifting is still in the realm of humans, but now humans are freed from many mundane tasks to focus on bigger impact tasks.
The right-most bar depicts business once a widely accepted form of AI is deployed. Such a technology would be like XML on steroids. My take on this technology is in my SCL language, I mention above. In this bar, we see that the intelligence of business is now about a third each of human, data, and rules.
To elaborate on the statement "XML on steroids", I'll briefly describe what XML has done. XML truly revolutionized software architecture. It is the basis of Service-Oriented Architecture (SOA) which enables millions of servers to easily exchange messages. It's the backbone of e-commerce. The problem is that these messages (SOAP) are rigid in nature. Another application of XML, RDF, is designed to add semantics by allowing annotation of XML elements so we can recognize that one XML document is a type of document. For example, an XML document represents an invoice and this particular element is the customer name.
SCL and RDF overlap a great deal at this time (that wasn't so three years ago). RDF is now the data source for query languages capable of inference. In any case, once technologies such as RDF and SCL gain widespread acceptable across a wide range of applications, it will kick off another revolution as XML did, but much more profound. There is an article on my SCL site on SCL Web Services that introduce the topic.
SCL also runs in an environment that implements a few concepts I'm in the process of laying down in text. I expect to have this done in a couple of weeks and will announce it here when it's done.