Legendary UCLA basketball coach John Wooden once said, "It's the little details that are vital. Little things make big things happen." The same philosophy could be applied to data.

It's not the vastness of data accumulation that has value, it's what can be done with specific data - the tiny details - that can bring value to a business.

To understand the relationship between data and its value, we need to look back a few years and consider data storage and the role of enterprise software. It wasn't so long ago that enterprise software revolved around a doctrine dubbed Systems of Record information storage systems.

The System of Record mindset prioritized the value of an authoritative data source. Very quickly, proponents of data storage, such as Salesforce, Workday and Intuit, were all the rage.

Since 2011, IT has prioritized applications and devices, rather than the data itself. The concept, known as the System of Engagement, was first outlined by management consultant and author Geoffrey Moore in a 2011 white paper.

The two concepts are, of course, affiliated. Data is acquired through these applications, such as an inventory, accounting or document management systems, and makes up the information in the "System of Record."

Capitalizing on a System of Engagement presumes that enterprise companies need to engage directly with their customers to succeed, which they do in real-time through social media and other communications technologies, all the while gleaning user data. The challenge is integration of so many disparate sources of data, mostly now achieved through cloud-based platform technologies. But, what of all this data that's being captured and stored? Is it being exploited to its fullest?

According to Moore, despite the accolades for big data and all it can do, there's actually a lot of "trapped value" in all that data. Accordingly, we're now on the cusp of the next generation of enterprise software: Systems of Intelligence. The phrase was coined by Jerry Chen, a partner at Silicon Valley Venture Capital Greylock Partners, which has invested in some of the best known enterprise SaaS applications, and cloud, data, and application infrastructure.

Systems of Intelligence, put simply, are the those which bring value to businesses by correlating silos of enterprise data through artificial intelligence techniques to predict the future. The concept is likely to define enterprise software for the near future.

More precisely, Systems of Intelligence are platforms which utilize big data, machine learning, and artificial intelligence to uncover powerful insights. Around 40% of enterprise executives are already beginning to dabble in Systems of Intelligence, but truly innovative software is only now beginning to be available to the public.

This new generation of enterprise software is being used to:

  • Automate sales processes

  • Create more effective sales interactions

  • Craft more meaningful marketing interactions

  • Improve support experiences for customers

  • Reduce costs of operations

It's important to remember that just as Systems of Engagement didn't replace Systems of Record but rather complemented it, the same will happen with Systems of Intelligence. Systems of Intelligence will serve to enhance the value of Systems of Engagement and Systems of Record, helping companies gain a powerful competitive advantage over their peers by putting data to work.

It's not just the service sector that's going to benefit. Salesforce, best known for its Customer Relationship Management platform, for instance, is developing a solution of its own called Einstein, that in the future may grow to become a System of Intelligence.

This artificial intelligence is specifically targeted to business technology applications. Salesforce says Einstein will be able to "discover relevant patterns based on your data without having to build the sophisticated data models required by traditional business analysis tools and data analysis software."

Parting Words

Many business have difficulty responding to new business models. But, industry experts estimate we only have a few years before the importance of the System of Intelligence overshadows a reliance on a System of Engagement.

The powerful insights provided by Systems of Intelligence, combined with your expert employees, will help your organization thrive in the coming years. Like Coach Wooden once said, "Failure is not fatal, but failure to change might be."

Published on: Jan 23, 2018
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.