Back in 2008, when the credit crunch was at the height of its disruptive power, analysts at IT advisory Gartner noticed what they perceived to be a significant change in the information requirements of business leaders.
“In the wake of the recession, business leaders were saying, ‘I need to be able to see things before they impact me’,” recalls Yvonne Genovese, research vice president at the company. “And they weren’t talking about events six months down the line; they wanted to know if their sales pipeline was going to cave in the next couple of weeks.”
These leaders knew the information they needed was available somewhere, Genovese says, but not necessarily in their enterprise applications or business intelligence systems. “If my sales pipeline is going to collapse, then the sales reps who understand what is going on with the clients probably already know that,” she explains.
However, the processes and technologies required to access that information were in most cases absent, which Genovese argues prevented organisations from taking precautions that might have dampened the impact of the recession.
To decide how best to define this problem, and to devise a strategic approach with which to address it, Gartner pulled together analysts from across all of its practice areas for a brainstorming session. The result of that session was the idea of ‘pattern-based strategy’.
Pattern-based strategy, put simply, is the act of seeking out patterns in information (whether it relates to market conditions, the financial climate or internal operations), building an understanding of how those patterns affect the organisation, and changing operations accordingly. These three components of a pattern-based strategy are defined by Gartner as “seek, model and adapt”.
Genovese acknowledges that this might seem like a new name for what businesses have always done – looking for trends and reacting to them – but there are some important distinctions, she insists.
Firstly, she says, a ‘pattern’ is not the same as a ‘trend’. “A trend could be a weak signal, or something not very concrete. But a pattern means that something is really happening,” she argues.
Secondly, seeking and adapting is not the same as reacting, Genovese says. “We’re in a sense and respond society. What we’re saying is be proactive, and seek out patterns outside of the conventional data set.
There is, perhaps unsurprisingly, a long list of technologies that Gartner claims can help organisations achieve and execute a pattern-based strategy.
Data visualisation is on that list. “Visualisation techniques enable humans to recognise patterns, because pattern recognition is very visual in nature,” explains Genovese. Also on the list is social media analysis, which allows businesses to use patterns in customer sentiment as a lead indicator for changes in commercial activity, and predictive analytics.
Business process optimisation is another relevant technology, as it allows organisations to model patterns in their own operations. “When you’re looking to improve your processes, you’re basically looking for patterns around what works and what doesn’t,” says Genovese.
Lanner is a British business process optimisation software vendor, whose tools let users model their processes using a graphical interface, and simulate the impact of any change to those processes. Customers include Nottingham Police, which used Lanner’s technology to model its emergency response call centre workflow. “Gartner told us we’ve been doing pattern-based strategy all this time,” says Lanner chief executive David Jones, with some bemusement.
Organisations that have successfully adopted a pattern-based strategy, in Gartner’s estimation, include US-based online DVD rental service Netflix. Netflix has developed an algorithmic recommendation engine based on user reviews that not only suggests films that customers might enjoy, but also allows the company to reduce its inventory by only stocking films for which there is demand.
Another, an unnamed US financial services company, has built pattern recognition into the process of strategic planning. “They have a ‘weak signals’ team, which reports directly into the CEO,” Genovese explains. “That team produces a weekly report that looks across all forms of information, like social media, internal transactions and investor relations, and identifies the patterns that may impact their strategic initiatives.”
Genovese says that ultimately, the ‘pattern-based strategy’ concept is a way to express the capabilities of a new generation of technologies – ones that are visual and predictive in nature, and which can be applied to unstructured as well as structured data – to a business audience. “People think in terms of patterns, so it’s something that business leaders can identify with,” she claims.