Myles Suer

Myles Suer
Mr. Suer is a senior manager of solutions marketing at Informatica Corporation. Much of Mr. Suer’s experience has been as a BI practitioner. At HP and Peregrine, Mr. Suer led the product management team applying BI and Scorecard technology to these company’s IT management products. Prior to HP, Mr. Suer led new product initiatives at start-ups and large companies. This included doing a restart of a Business Activity Monitoring Company. Mr. Suer has, also, been a software industry analyst. Mr. Suer holds a Master of Science degree from UC Irvine and a 2nd Masters in Business Administration in Strategic Planning from the University of Southern California.

Analytics Stories: A Banking Case Study

Right to winAs I have shared within other post within this series, businesses are using analytics to improve their internal and external facing business processes and to strengthen their “right to win” within the markets that they operate. In banking, the right to win increasingly comes from improving two core sets of business capabilities—risk management and customer service.

Significant change has occurred in risk management over the last few years following theAnalytics subprime crisis and the subsequent credit crunch. These environmental changes have put increased regulatory pressure upon banks around the world. Among other things, banks need to comply with measures aimed at limiting the overvaluation of real estate assets and at preventing money laundering. A key element of handling these is to ensuring that go forward business decisions are made consistently using the most accurate business data available. It seems clear that data consistency can determine the quality of business operations especially business risk.

At the same time as banks need to strengthen their business capabilities around operations, and in particular risk management, they also need to use better data to improve the loyalty of their existing customer base.

Banco Popular launches itself into the banking vanguard

Banco Popular is an early responder regarding the need for better banking data consistency. Its leadership created a Quality of Information Office (the Office uniquely is not based within IT but instead with the Office of the President) with the mandate of delivering on two business objectives:

  1. Ensuring compliance with governmental regulations occurs
  2. Improving customer satisfaction based on accurate and up-to-date information

Part of the second objective is aimed at ensuring that each of Banco Popular’s customers was offered the ideal products for their specific circumstances. This is interesting because by its nature it assists in obtainment of the first objective. To validate it achieves both mandates, the Office started by creating an “Information Quality Index”. The Index is created using many different types of data relating to each of the bank’s six million customers–including addresses, contact details, socioeconomic data, occupation data, and banking activity data. The index is expressed in percentage terms, which reflects the quality of the information collected for each individual customer. The overarching target set for the organization is a score of 90 percent—presently, the figure sits at 75 percent. There is room to grow and improve!

Current data management systems limit obtainment of its business goals

Unfortunately, the millions of records needed by the Quality Information Office are spread across different tables in the organization’s central computing system and must be combined into one information file for each customer to be useful to business users. The problem is that they had depended on third parties to manually pull and clean up this data. This approach with the above mandates proved too slow to be executed in timely fashion. This, in turn, has impacted the quality of their business capabilities for risk and customer service. According to Banco Popular, their approach did not create the index and other analyses “with the frequency that we wanted and examining the variables of interest to us,” explains Federico Solana, an analyst at the Banco Popular Quality of Information Office.

Creating the Quality Index was just too time consuming and costly. But not improving data delivery performance had a direct impact on decision making.

Automation proves key to better business processes

TrustTo speed up delivery of its Quality Index, Banco Popular determined it needed to automate it’s creation of great data—data which is trustworthy and timely. According to Tom Davenport, “you can’t be analytical without data and you can’t be really good at analytics without really good data”. (Analytics at Work, 2010, Harvard Business Press, Page 23). Banco Popular felt that automating the tasks of analyzing and comparing variables would increase the value of data at lower cost and ensuring a faster return on data.

In addition to fixing the Quality Index, Banco Popular needed to improve its business capabilities around risk and customer service automation. This aimed at improving the analysis of mortgages while reducing the cost of data, accelerating the return on data, and boosting business and IT productivity.

Everything, however, needed to start with the Quality Index. After the Quality Index was created for individuals, Banco Popular created a Quality of Information Index for Legal Entities and is planning to extend the return on data by creating indexes for Products and Activities. For the Quality Index related to legal entities, the bank included variables that aimed at preventing the consumption of capital as well as other variables used to calculate the probability of underpayments and Basel models. Variables are classified as essential, required, and desirable. This evaluation of data quality allows for the subsequent definition of new policies and initiatives for transactions, the network of branches, and internal processes, among other aspects. In addition, the bank is also working on the in-depth analysis of quality variables for improving its critical business processes including mortgages.

Some Parting Remarks

In the end, Banco Popular has shown the way forward for analytics. In banking the measures of performance are often known, however, what is problematic is ensuring the consistency of decision making across braches and locations. By working first on data quality, Banco Popular ensured that the quality of data measures are consistent and therefore, it can now focus its attentions on improving underling business effectiveness and efficiency.

Related links

Related Blogs

Analytics Stories: A Financial Services Case Study
Analytics Stories: A Healthcare Case Study
Who Owns Enterprise Analytics and Data?
Competing on Analytics: A Follow Up to Thomas H. Davenport’s Post in HBR
Thomas Davenport Book “Competing On Analytics”

Solution Brief: The Intelligent Data Platform

Author Twitter: @MylesSuer

 

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Who Owns Enterprise Analytics and Data?

processing dataWith the increasing importance of enterprise analytics, the question becomes who should own the analytics and data agenda. This question really matters today because, according to Thomas Davenport, “business processes are among the last remaining points of differentiation.” For this reason, Davenport even suggests that businesses that create a sustainable right to win use analytics to “wring every last drop of value from their processes”.

The CFO is the logical choice?

enterpriseIn talking with CIOs about both enterprise analytics and data, they are clear that they do not want to become their company’s data steward. They insist instead that they want to be an enabler of the analytics and data function. So what business function then should own enterprise analytics and data? Last week an interesting answer came from a CFO Magazine Article by Frank Friedman. Frank contends that CFOs are “the logical choice to own analytics and put them to work to serve the organization’s needs”.

To justify his position, Frank made the following claims:

  1. CFOs own most of the unprecedented quantities of data that businesses create from supply chains, product processes, and customer interactions
  2. Many CFOs already use analytics to address their organization’s strategic issues
  3. CFOs uniquely can act as a steward of value and an impartial guardian of truth across the organizations. This fact gives them the credibility and trust needed when analytics produce insights that effectively debunk currently accepted wisdom

Frank contends as well that owning the analytics agenda is a good thing because it allows CFOs to expand their strategic leadership role in doing the following:

  • Growing top line revenue
  • Strengthening their business ties
  • Expanding the CFO’s influence outside the finance function.

Frank suggests as well that analytics empowers the CFO to exercise more centralized control of operational business decision making. The question is what do other CFOs think about Frank’s position?

CFOs clearly have an opinion about enterprise analytics and data

A major Retail CFO says that finance needs to own “the facts for the organization”—the metrics and KPIs. And while he honestly admits that finance organizations in the past have not used data well, he claims finance departments need to make the time to become truly data centric. He said “I do not consider myself a data expert, but finance needs to own enterprise data and the integrity of this data”. This CFO claims as well that “finance needs to use data to make sure that resources are focused on the right things; decisions are based on facts; and metrics are simple and understandable”. A Food and Beverage CFO agrees with the Retail CFO by saying that almost every piece of data is financial in one way or another. CFOs need to manage all of this data since they own operational performance for the enterprise. CFOs should own the key performance indicators of the business.

CIOs should own data, data interconnect, and system selection

A Healthcare CFO said he wants, however, the CIO to own data systems, data interconnect, and system selection. However, he believes that the finance organization is the recipient of data. “CFOs have a major stake in data. CFOs need to dig into operational data to be able to relate operations to internal accounting and to analyze things like costs versus price”. He said that “the CFOs can’t function without good operational data”.

An Accounting Firm CFO agreed with the Healthcare CFO by saying that CIOs are a means to get data. She said that CFOs need to make sense out of data in their performance management role. CFOs, therefore, are big consumers of both business intelligence and analytics. An Insurance CFO concurred by saying CIOs should own how data is delivered.

CFOs should be data validators

Data AnalysisThe Insurance CFOs said, however, CFOs need to be validators of data and reports. They should, as a result, in his opinion be very knowledgeable on BI and Analytics. In other words, CFOs need to be the Underwriters Laboratory (UL) for corporate data.

Now it is your chance

So the question is what do you believe? Does the CFO own analytics, data, and data quality as a part of their operational performance role? Or is it a group of people within the organization? Please share your opinions below.

Related links

Solution Brief: The Intelligent Data Platform

Related Blogs

CFOs Move to Chief Profitability Officer
CFOs Discuss Their Technology Priorities
The CFO Viewpoint upon Data
How CFOs can change the conversation with their CIO?
New type of CFO represents a potent CIO ally
Competing on Analytics
The Business Case for Better Data Connectivity

Twitter: @MylesSuer

 

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CFO Rising: CFO’s Show They Are Increasingly Business Oriented

The Rising CFO is Increasingly Business Oriented

CFO risingAt the CFO Rising West Conference on October 30th and 31st, there were sessions on managing capital expenditures, completing an IPO, and even managing margin and cash flow. However, the keynote presenters did not spend much of time on these topics. Instead, they focused on how CFOs need to help their firms execute better. Here is a quick summary of the suggestions made from CFOs in broadcasting, consumer goods, retail, healthcare, and medical devices.

The Modern CFO is Strategic

CFO risingThe Broadcasting CFO started his talk by saying he was not at the conference to share why CFOs need to move from being “bean counters to strategic advisors”. He said “let’s face it the modern CFO is a strategic CFO”. Agreeing with this viewpoint, the Consumer Goods CFO said that finance organizations have a major role to play in business transformation. He said that finance after all is the place to drive corporate improvement as well as business productivity and business efficiency.

CFOs Talked About Their Business’ Issues

CFO risingThe Retailer CFO talked like he was a marketing person. He said retail today is all about driving a multichannel customer experience. To do this, finance increasingly needs to provide real business value. He said, therefore, that data is critical to the retailer’s ability to serve customers better. He claimed that customers are changing how they buy, what they want to buy, and when they want to buy. We are being disrupted and it is better to understand and respond to these trends. We are trying, therefore, to build a better model of ecommerce.

Meanwhile, the Medical Devices CFO said that as a supplier to medical device vendors “what we do is compete with our customers engineering staffs”. And the Consumer Goods CFO added the importance of finance driving sustained business transformation.

CFOs Want To Improve Their Business’ Ability To Execute

CFO risingThe Medical Devices CFO said CFOs need to look for “earlier execution points”. They need to look for the drivers of behavior change. As a key element of this, he suggested that CFOs need to develop “early warning indicators”. He said CFOs need to actively look at the ability to achieve objectives. With sales, we need to ask what deals do we have in the pipe? At what size are these deals? And at what success rate will these deals be closed? Only with this information, can the CFO derive an expected company growth rate. He then asked CFOs in the room to identify themselves. With their hands in the air, he asked them are they helping to create a company that executes or not. He laid down the gauntlet for the CFOs in the room by then asserting that if you are not creating a company that executes then are going to be looking at cutting costs sooner rather than later.

The retailer CFO agreed with this CFO. He said today we need to focus on how to win a market. We need to be asking business questions including:

  • How should we deploy resources to deliver against our firm’s value proposition?
  • How do we know when we win?

CFOs Claim Ownership For Enterprise Performance Measurement

Data AnalysisThe Retail CFO said that finance needs to own “the facts for the organization”—the metrics and KPIs. This is how he claims CFOs will earn their seat at the CEOs table. He said in the past the CFO have tended to be stoic, but this now needs to change.

The Medical Devices CFO agreed and said enterprises shouldn’t be tracking 150 things—they need to pare it down to 12-15 things. They need to answer with what you measure—who, what, and when. He said in an execution culture people need to know the targets. They need measurable goals. And he asserted that business metrics are needed over financial metrics. The Consumer Goods CFO agreed by saying financial measures alone would find that “a house is on fire after half the house had already burned down”. The Healthcare CFO picked up on this idea and talked about the importance of finance driving value scorecards and monthly benchmarks of performance improvement. The broadcaster CFO went further and suggested the CFO’s role is one of a value optimizer.

CFOs Own The Data and Drive a Fact-based, Strategic Company Culture

FixThe Retail CFOs discussed the need to drive a culture of insight. This means that data absolutely matters to the CFO. Now, he honestly admits that finance organizations have not used data well enough but he claims finance needs to make the time to truly become data centric. He said I do not consider myself a data expert, but finance needs to own “enterprise data and the integrity of this data”. He said as well that finance needs to ensure there are no data silos. He summarized by saying finance needs to use data to make sure that resources are focused on the right things; decisions are based on facts; and metrics are simple and understandable. “In finance, we need use data to increasingly drive business outcomes”.

CFOs Need to Drive a Culture That Executes for Today and the Future

Honestly, I never thought that I would hear this from a group of CFOs. The Retail CFO said we need to ensure that the big ideas do not get lost. We need to speed-up the prosecuting of business activities. We need to drive more exponential things (this means we need to position our assets and resources) and we need, at the same time, to drive the linear things which can drive a 1% improvement in execution or a 1% reduction in cost. Meanwhile, our Medical Device CFO discussed the present value, for example, of a liability for rework, lawsuits, and warranty costs. He said that finance leaders need to ensure things are done right today so the business doesn’t have problems a year from today. “If you give doing it right the first time a priority, you can reduce warranty reserve and this can directly impact corporate operating income”.

CFOs need to lead on ethics and compliance

The Medical Devices CFO said that CFOs, also, need to have high ethics and drive compliance. The Retail CFO discussed how finance needs to make the business transparent. Finance needs to be transparent about what is working and what is not working. The role of the CFO, at the same time, needs to ensure the integrity of the organization. The Broadcaster CFO asserted the same thing by saying that CFOs need to take a stakeholder approach to how they do business.

Final remarks

In whole, CFOs at CFO Rising are showing the way forward for the modern CFOs. This CFO is all about the data to drive present and future performance, ethics and compliance, and business transparency. This is a big change from the historical controller approach and mentality. I once asked a boss about what I needed to be promoted to a Vice President; my boss said that I needed to move from a technical specialist to a business person. Today’s CFOs clearly show that they are a business person first.

Related links

Solution Brief: The Intelligent Data Platform

Related Blogs
CFOs Move to Chief Profitability Officer
CFOs Discuss Their Technology Priorities
The CFO Viewpoint upon Data
How CFOs can change the conversation with their CIO?
New type of CFO represents a potent CIO ally
Competing on Analytics
The Business Case for Better Data Connectivity
Twitter: @MylesSuer

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Analytics Stories: A Financial Services Case Study

As I indicated in my last case study regarding competing on analytics, Thomas H. Davenport believes “business processes are among the last remaining points of differentiation.” For this reason, Davenport contends that businesses that create a sustainable right to win use analytics to “wring every last drop of value from their processes”. For financial services, the mission critical areas needing process improvement center are around improving the consistency of decision making and making the management of regulatory and compliance more efficient and effective.

Why does Fannie Mae need to compete on analytics?

Fannie MaeFannie Mae is in the business of enabling people to buy, refinance, or rent homes. As a part of this, Fannie Mae says it is all about keeping people in their homes and getting people into new homes. Foundational to this mission is the accurate collection and reporting of data for decision making and risk management. According to Tracy Stephan at Fannie Mae, their “business needs to have the data to make decisions in a more real time basis. Today, this is all about getting the right data to the right people at the right time”.

Fannie Mae claims when the mortgage crisis hit, a lot of the big banks stopped lending and this meant that Fannie Mae among others needed to pick up the slack. Their action here, however, caused the Federal Government to require them to report monthly and quarterly against goals that the Federal Government set for it. “This meant that there was not room for error in how data gets reported”. In the end, Fannie Mae says three business imperatives drove it’s need to improve its reporting and its business processes:

  1. To ensure that go forward business decisions were made consistently using the most accurate business data available
  2. To avoid penalties by adhering to Dodd-Frank and other regulatory requirements established for it after the 2008 Global Financial Crisis
  3. To comply with reporting to Federal Reserve and Wall Street regarding overall business risk as a function of: data quality and accuracy, credit-worthiness of loans, and risk levels of investment positions.

Delivering required Fannie Mae to change how it managed data

AnalyticsGiven these business imperatives, IT leadership quickly realized it needed to enable the business to use data to truly drive better business processes from end to end of the organization. However, this meant enabling Fannie Mae’s business operations teams to more effectively and efficiently manage data. This caused Fannie Mae to determine that it needed a single source of truth whether it was for mortgage applications or the passing of information securely to investors. This need required Fannie Mae to establish the ability to share the same data across every Fannie Mae repository.

But there was a problem. Fannie Mae needed clean and correct data collected and integrated from more than 100 data sources. Fannie Mae determined that doing so with its current data processes could not scale. And as well, it determined that its data processes would not allow it to meet its compliance reporting requirements. At the same time, Fannie Mae needed to deliver more proactive management of compliance. This required that it know how critical business data enters and flows through each of its systems. This includes how data was changed by multiple internal processing and reporting applications. As well, Fannie Mae leadership felt that this was critical to ensure traceability to the individual user.

The solution

analyticsPer its discussions with business customers, Fannie Mae’s IT leadership determined that it needed to get real time, trustworthy data to improve its business operations and to improve its business processes and decision making. As said, these requirements could not be met with its historical approaches to integrating and managing data.

Fannie Mae determined that it needed to create a platform that was high availability, scalable, and largely automating its management of data quality management.  At the same time, the platform needed to provide the ability to create a set of business glossaries with clear data lineages. Fannie Mae determined it needed effectively a single source of truth across all of its business systems. According to Tracy Stephan, IT Director, Fannie Mae, “Data quality is the key to the success of Fannie Mae’s mission of getting the right people into the right homes. Now all our systems look at the same data – that one source of truth – which gives us great comfort.” To learn more specifics about how Fannie Mae improved its business processes and demonstrated that it is truly “data driven”, please click on this video of their IT leadership.

Related links
Solution Brief: The Intelligent Data Platform
Related Blogs
Thomas Davenport Book “Competing On Analytics”
Competing on Analytics
The Business Case for Better Data Connectivity
The CFO Viewpoint upon Data
What an enlightened healthcare CEO should tell their CIO?

Twitter: @MylesSuer

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Analytics Stories: A Healthcare Case Study

As I indicated in Competing on Analytics, if you ask CIOs today about the importance of data to their enterprises, they will likely tell you about their business’ need to “compete on analytics”, to deliver better business insights, and to drive faster business decision making. These have a high place on the business and CIO agendas, according to Thomas H. Davenport, because “at a time when firms in many industries offer similar products and use comparable technologies, business processes are among the last remaining points of differentiation.” For this reason, Davenport claims timely analytics enables companies to “wring every last drop of value from their processes”.

So is anyone showing the way on how to compete on analytics?

healthcareUMass Memorial Health Care is a great example of an enterprise that is using analytics to “wring every last drop of value from their processes”. However, before UMass could compete on data, it needed to create data that could be trusted by its leadership team.

Competing on analytics requires trustworthy data

TrustworthyAt UMass, they found that they could not accurately measure the size of their patient care population. This is a critical metric for growing market share. Think about how hard it would be to operate any business without an accurate count of how many customers are being served. Lacking this information hindered UMass’ ability to make strategic market decisions and drive key business and clinical imperatives.

A key need at UMASS was to determine a number of critical success factors for its business. This included obviously the size of the patient population but it also included the composition of the patient population and the number of unique patients served by primary care physician providers across each of its business locations. Without this knowledge, UMASS found itself struggling to make effective decisions regarding its strategic direction, its clinical policies, and even its financial management. And all of these factors really matter in an era of healthcare reform.

Things proved particularly complex at UMass since they act as what is called a “complex integrated delivery network”. This means that portions of its business effectively operated under different business models. This, however, creates a data challenge in healthcare. Unlike other diversified enterprises, UMASS needs an operating model–“the necessary level of business process integration and standardization for delivering its services to customers”[1]– that could support different elements of its business but be unified for integrative analysis. This matters because in UMass’ case, there is a single denominator, the patient. And to be clear, while each of UMASS’ organizations could depend on their data to meet their needs, UMASS lacked an integrative view into patients.

Departmental Data may be good for a department but not for the Enterprise

Data AnalysisUMass had adequate data for each organization, such as delivering patient care or billing for a specific department or hospital, but it was inadequate for system wide measures. And aggregation and analytics, which needed to combine data across systems and organizations was stymied by data inconsistencies, incomplete population of fields, or other types of data quality problems between each system. These issues made it impossible to provide the analytics UMass’ senior managers needed. For example, UMass’ aggregated data contained duplicate patients—people who had been treated at different sites and had different medical record numbers, but who were in fact the same patients.

A key need for UMass creating the ability to compete on analytics was to measure and report on the number of primary care patients being treated across their entire healthcare system. UMass leadership saw this as a key planning and strategy metric because primary care patients today are the focus of investments in wellness and prevention programs, as well as a key source of specialty visits and inpatients. According to George Brenckle, Senior Vice President and CIO, they “had an urgent need for improved clinical and business intelligence across all our operations, we needed an integrated view of patient information, encounters, providers, and UMass Memorial locations to support improved decision making, advance the quality of patient care, and increase patient loyalty. To put the problem into perspective, we have more than 100 applications—some critical, some not so critical—and our ultimate ambition was to integrate all of these areas of business, leverage analytics, and drive clinical and operational excellence.”

The UMASS Solution

solutionThe UMass solved the above issues by creating an integrated way to view of patient information, encounters, providers, and UMass Memorial locations. This allowed UMass to compute the number of primary care physician patients cared for. In order to make this work, the solution merged data from the core hospital information applications and processed this data for quality issue that prevented UMass from deriving the primary care patient count. Armed with this, data integration helped UMass Memorial improve its clinical outcomes, grow its patient population, increase process efficiency, and ultimately maximize its return on data. As well UMASS gained a reliable measure of its primary care patient population, UMASS now was able to determine an accurate counts for unique patients served by its hospitals (3.2 million), active patients (i.e., those treated within the last three years—approximately 1.7 million), and unique providers (approximately 24,000).

According to Brenckle, data integration transformed their analytical capabilities and decision making. “We know who our primary care patients are and how many there are of them, whether the volume of patients is rising or decreasing, how many we are treating in an ambulatory or acute care setting, and what happens to those patients as they move through the healthcare system. We are able to examine which providers they saw and at which location. This data is vital to improving clinical outcomes, growing the patient population, and increasing efficiency.”

Related links

Solution Brief: The Intelligent Data Platform
Details on the UMASS Solution

Related Blogs

Thomas Davenport Book “Competing On Analytics”
Competing on Analytics
The Business Case for Better Data Connectivity
CIO explains the importance of Big Data to Healthcare
The CFO Viewpoint upon Data
What an enlightened healthcare CEO should tell their CIO?
Twitter: @MylesSuer

 


 

[1] Enterprise Architecture as Business Strategy, Jeanne Ross, Harvard Business School Press, Page 8
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IT Is All About Data!

AboutDataIs this how you think about IT? Or do you think of IT in terms of the technology it deploys instead? I recently was interviewing a CIO at Fortune 50 Company about the changing role of CIOs. When I asked him about which technology issues were most important, this CIO said something that surprised me.

He said, “IT is all about data. Think about it. What we do in IT is all about the intake of data, the processing of data, the store of data, and the analyzing of data. And we need, from data, to increasingly provide the intelligence to make better decisions”.

How many view the function of the IT organization with such clarity?

This was the question that I had after hearing this CIO. And how many IT organizations view IT as really a data system? It must not be very many. Jeanne Ross from MIT CISR contends in her book that company data “one of its most important assets, is patchy, error-prone, and not up-to-date” (Enterprise Architecture as Strategy, Jeanne Ross, page 7). Jeanne contends as well that companies having a data centric view “have higher profitability, experience faster time to market, and get more value from their IT investments” (Enterprise Architecture as Strategy, Jeanne Ross, page 2).

What then do you need to do to get your data house in order?

What then should IT organizations do to move their data from something that is “patchy, error-prone, and not up-to-date” to something that is trustworthy and timely? I would contend our CIO friend had it right. We need to manage all four elements of our data process better.

1.     Input Data Correctly

data inputYou need start by making sure that the data you produced is done so consistently and correctly.  I liken the need here to a problem that I had with my electronic bill pay a few years ago. My bank when it changed bill payment service providers started sending my payments to a set of out of date payee addresses. This caused me to receive late fees and for my credit score to actually go down. The same kind of thing can happen to a business when there are duplicate customers or customer addresses are entered incorrectly. So much of marketing today is about increasing customer intimacy. It is hard to improve customer intimacy when you bug the same customer too much or never connect with a customer because you had a bad address for them.

2.     Process Data to Produce Meaningful Results

processing dataYou need to collect and manipulate data to derive meaningful information. This is largely about processing data so it results produce meaningful analysis. To do this well, you need to take out the data quality issues from the data that is produced. We want, in this step, to make data is “trustworthy” to business users.

With this, data can be consolidated into a single view of customer, financial account, etc. A CFO explained the importance of this step by saying the following:

“We often have redundancies in each system and within the chart of accounts the names and numbers can differ from system to system. And as you establish a bigger and bigger set of systems, you need to, in accounting parlance, to roll-up the charter of accounts”.

Once data is consistently put together, then you need to consolidate it so that it can be used by business users. This means that aggregates need to be created for business analysis. These should support dimensional analysis so that business users can truly answer why something happened. For finance organizations, timely aggregated data with supporting dimensional analysis enables them to establish themselves as “a business person versus a bean counting historically oriented CPA”. Having this data answers questions like the following:

  • Why are sales not being achieved? Which regions or products are failing to be delivered?
  • Or why is the projected income statement not in conformance with plan? Which expense categories should be we cut in order to ensure the income statement is in line with business expectation?

3.     Store Data Where it is Most Appropriate

Cloud StorageData storage needs to be able to occur today in many ways. It can be in applications, a data warehouse, or even, a Hadoop cluster. You need here to have an overriding data architecture that considers the entire lifecycle of data. A key element of doing this well involves archiving data as it becomes inactive and protecting data across its entire lifecycle. The former can involve as well the disposing of information. And the latter requires the ability to audit, block, and dynamically mask sensitive production data to prevent unauthorized access.

4.      Enable analysis including the discovery, testing, and putting of data together

Data AnalysisAnalysis today is not just about the analysis tools. It is about enabling users to discover, test, and put data together. CFOs that we have talked to say they want analysis to expose earlier potential business problems. They want, for example, to know about metrics like average selling price and gross margins by account or by product. They want as well to see when they have seasonality affects.

Increasingly, CFOs need to use this information to help predict what the future of their business will look like. CFOs say that they want at the same time to help their businesses make better decisions from data. Limiting them today from doing this are disparate systems that cannot talk to each other. CFOs complain about their enterprise hodgepodge of systems that do not talk to one another. And yet to report, CFOs need to traverse between front office to back office systems.

One CIO said to us that the end of any analysis layer should be the ability to trust data and make dependable business decisions. And once dependable data exists, business users say that they want “access to data when they need it. They want to get data when and where you need it”. One CIO likened what is need here to orchestration when he said:

“Users want to be able to self-service. They want to be able to assembly data and put it together and do it from different sources at different times. I want them to be able to have no preconceived process. I want them to be able discover data across all sources”.

Parting thoughts

So as we said at the beginning of this post, IT is all about the data. And with mobile systems of engagement, IT’s customers are wanting increasingly their data at their fingertips.  This means that business users need to be able to trust that the data they use for business analysis is timely and accurate. This demands that IT organizations get better at managing their core function—data.

Solution Brief: The Intelligent Data Platform
Great Data by Design
The Power of a Data Centric Mindset
Data is it your competitive advantage?

Related Blogs

Competing on Analytics
The CFO Viewpoint of Data
Is Big Data Destined To Become Small And Vertical?
Big Data Why?
The Business Case for Better Data Connectivity
What is big data and why should your business care?
Twitter: @MylesSuer

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Hacking: How Ready Is Your Enterprise?

 
Recent corporate data security challenges require companies to ask hard questions about enterprise readiness:

1)      How do you know if your firm is next in line?
2)      How well will your Information Technology team respond to an attempted breach?

Is your firm ready?

HackingOver the last year, a number of high profile data security breaches have taken place at major US corporations. However, as a business person, how do you know the answers to the above questions.  Do you know what is at risk? And as well with big data gathering so much attention these days, isn’t it kind of like putting all the eggs into one basket? According to the management scholar, Theodore Levitt, part of being a manager is the ability to ask questions. My goal today is to arm business managers with the questions to ask so they can determine the answers to both of the above questions.

Is your Big Data secure?

HackingBig Data is all the buzz today. How safe are your Big Data spaces? Do you know what is going into each of them? Judith Hurwitz, the President and CEO of Hurwitz & Associates, says that she worries about big data security. Judith even suggests that big data “introduces security risks into the company, unintended consequences can endanger the company”. According to Judith, these risks come in two forms:

1)      Big data sources can contain viruses as well as other forms of business risk
2)      Big data lakes if unprotected represent a major business risk from hacking

Clearly, protecting your big data comprehensively requires diligence, including data encryption. But just remember, big data may seem like a science project in the back room, but it puts in one place a significant volume of data that could damage your enterprise if exposed to the outside world.

Do you need better tools or better business processes?

SecurityWhile many of the discussions about recent hacks have focused on the importance of having the right and up to date tools in place, it is just as important to have the right business processes in place if you want to minimize the possibility of a breach and minimizes losses when a breach occurs.

From an accessibility and security prospective, security processes look at the extent to which access to information is restricted appropriately to authorized parties. Next, from an information management perspective, they should consider the entire information life cycle. Information should be protected during all phases of its life cycle. Security should start at the information planning phase, and for many, this implies different protection mechanisms for storing, sharing, and disposition of information.

To determine what questions a business person should be asking their security professionals, I went to COBIT 5. For those who do not know, COBIT is the standard your auditors use to evaluate your company’s technology per Sarbanes Oxley. Understanding what it recommends matters because CFOs that we have talked to say that after the recent hacks they believe they are about to get increased scrutiny from their auditors. If you want to understand what auditors will look for, you should study COBIT 5. COBIT 5 has even linked its security policy guidance to what your IT security management team should be running against—one more term, ISO/IEC 27000 standard. Want to impress your security management professionals? Ask them whether they are in compliance with ISO/IEC 27000.

Good information security requires policies and procedures

Now, let’s explore what COBIT 5 recommends for information governance and security. The first thing it recommends is that good information security requires policies and procedures are created and put in place. This sounds pretty reasonable. However, COBIT next insists—something that we all know is true as managers– enterprise culture and ethics are critical to making “security policies and procedures effective”.

What metrics then should business people use to judge whether their firm is managing information security appropriately. COBIT 5 suggest that you look for two things right off the top.

1)      How recently did your IT organization conduct a risk assessment for the services that it provides?
2)      Does your IT organization have a current security plan which is accepted and communication throughout the enterprise?

For the first, it is important that you then ask what percentage of IT services and programs are covered by a risk assessment and what percentage of security incidents taking place were not identified in the risk assessment. The first question tells you how actively your IT is managing security and the second tells you whether there a gaps and risks. Your goal here should be to ensure that “IT-related enterprise risk does not exceed your risk appetite and your risk tolerance”.

With regards to the security plan, you should be asking your IT leadership (your CIO or CISO) about the number of key security roles that have been clearly defined and about the number of security related incidents over time. As important, find out how many security solutions currently deviate from plan?  A timely review of these could clearly impact your probability of getting your systems hacked.

As a manager, you know that teams need policies and procedures to limit errors from happening and to manage them when they occur. So ask what are the procedures for managing through a security event? As important, ask about the percentage of services are confirmed to have alignment with the security plan. At the same time, you want to know about the number of security incidents caused by non-adherence to the security plan. For the future, you want to make sure as well that all new solutions being developed have from launch confirmed their alignment to the security plan.

Other critical things to consider include the number of security incidents that have caused financial loss, business disruption, and public embarrassment. This of course is a big one that should be small in number. Then ask about the number of IT services with outstanding security requirements? Next, what is the time required to grant, change, and remove access privileges and the frequency of security assessment against the latest standards and guidelines.

Concluding Remarks

Security is one area that you really need IT-Business Alignment. It is important, as a business professional, that you do your best to ensure that IT builds policies and procedures that conform to your corporate risk appetite. As well you need to assure that the governance, policies, and procedures for your IT organization run against are kept current and update. This includes ensuring that the data is governed from end to end in the IT environment.

Related links

Solutions: Enterprise Level Data Security
The State of Data Centric Security
Gambling With Your Customer’s Financial Data
Twitter: @MylesSuer

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Gambling With Your Customer’s Financial Data

CIOs and CFOs both dig data security

Financial dataIn my discussions with CIOs over the last couple of months, I asked them about the importance of a series of topics. All of them placed data security at the top of their IT priority list. Even their CFO counterparts, with whom they do not always see eye to eye, said they were very concerned about the business risk for corporate data. These CFOs said that they touch, as a part of owning business risk, security — especially from hacking. One CFO said that he worried, as well, about the impact of data security for compliance issues, including HIPAA and SOX. Another said this: “The security of data is becoming more and more important. The auditors are going after this. CFOs, for this reason, are really worried about getting hacked. This is a whole new direction, but some of the highly publicized recent hacks have scared a lot of folks and they combined represent to many of us a watershed event.”

Editor of CFO Magazine

According to David W. Owens the editor of CFO Magazine, even if you are using “secure” storage, such as internal drives and private clouds, the access to these areas can be anything but secure. Practically any employee can be carrying around sensitive financial and performance data in his or her pocket, at any time.” Obviously, new forms of data access have created new forms of data risk.

Are some retailers really leaving the keys in the ignition?

If I only hadGiven the like mind set from CIOs and CFOs, I was shocked to learn that some of the recently hacked retailers had been using outdated security software, which may have given hackers easier access company payment data systems. Most amazingly, some retailers had not even encrypted their customer payment data. Because of this, hackers were able to hide on the network for months and steal payment data, as customers continued to use their credit cards at the company’s point of sale locations.

Why weren’t these transactions encrypted or masked? In my 1998 financial information start-up, we encrypted our databases to protect against hacks of our customers’ personal financial data. One answer came from a discussion with a Fortune 100 Insurance CIO. This CIO said “CIO’s/CTO’s/CISO’s struggle with selling the value of these investment because the C Suite is only interested in hearing about investments with a direct impact on business outcomes and benefits”.

Enterprise security drives enterprise brand today

Brand ValueSo how should leaders better argue the business case for security investments? I want to suggest that the value of IT is its “brand promise”. For retailers, in particular, if a past purchase decision creates a perceived personal data security risk, IT becomes a liability to their corporations brand equity and potentially creates a negative impact on future sales. Increasingly how these factors are managed either supports or not the value of a company’s brand.

My message is this: Spend whatever it takes to protect your brand equity; Otherwise a security issue will become a revenue issue.

In sum, this means organizations that want to differentiate themselves and avoid becoming a brand liability need to further invest in their data centric security strategy and of course, encryption. The game is no longer just about securing particular applications. IT organizations need to take a data centric approach to securing customer data and other types of enterprise data. Enterprise level data governance rules needs to be a requirement. A data centric approach can mitigate business risk by helping organizations to understand where sensitive data is and to protect it in motion and at rest. 

Related links

Solutions: Enterprise Level Data Security
The State of Data Centric Security
How Is The CIO Role Starting To Change?
The CFO viewpoint on data
CFOs discuss their technology priorities
Twitter: @MylesSuer

 

 

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The Secret To Being A Successful CIO

The Number 1 Enterprise Priority

CIOInformation Week reported last week upon the latest IT Trends Study. Once again this study had IT-business alignment as the No. 1 priority for enterprises. The article’s author even exclaimed within his piece isn’t this topic becoming “a bit “passé”. We have confirmed in our interviews of CIOs that they place connecting what IT is doing to business strategy higher than things like technical orchestration and overall process excellence. Hunter and Westerman say in The Real Value of IT that doing IT-Business Alignment well involves “showing the value of IT as an investment in business performance—operationally and financially”.

CIOs Need The Businesses Help With IT Demand Management

CIOOne CIO that we talked to suggested that accomplishing what Hunter and Westerman suggest starts with better IT demand management. “IT leaders increasingly need to get control over their IT demand management. After all, they have limited dollars, limited space, and limited people. They need to partner with the business to get the prioritization done”. This CIO suggests it is especially important to get this right these days because of the pace at which the tech landscape is changing.

The explosion of technologies is certainly making the need for IT-business alignment even more critical. This CIO has Mobile, Cloud, Social, and Big Data all key priorities at the same time. How does one select between them without having their customers in the room with you?

Another CIO suggests that IT-business alignment is increasingly about three things:

  1. Getting the CFO to understand technology is not a cost center
  2. Getting the business to understand that IT isn’t separate
  3. Getting business leaders to understand technology better. “I want business leaders to start asking for digital services that support their product and service offerings”.

A New Type Of CIO Needed?

TeamworkClearly, if CFOs are part of the alignment equation, CIOs should be looking at their tech priority list carefully. Some CIOs suggest that the emphasis on IT-business alignment brings to the forefront skills like collaboration and teamwork. And this change may require a different kind of CIO. The CIO role today is clearly becoming more about understanding the business than understanding technology. It is becoming more about business alignment than technology alignment. This means the biggest value added from the CIO still will be that they can align business needs with the technology fabric required to deliver it.

Presentations Need To Be About A Business Need

The Language of BusinessSeveral CIOs, in fact told me that they will not take a vendor presentation on a purely techie topic anymore. If they take a meeting from a vendor, they will almost always involve their business partner. They won’t do it alone. Given this, the topic needs to change. “Business partners will be suspicious of a meeting request filled with technical terms. They do not want a solution looking for a problem. They want to be looking for a solution to their problem”. Given this, to involve the CIO today, you need to have a business value proposition.

Even COBIT 5 Suggests That Alignment Matters

Even COBIT 5 in fact suggests says that IT organizations should be measured by their alignment of IT and business strategy. COBIT 5 even provides multiple KPIs that dig in on the topic. Given this, it may be “a bit “passé” but it is core to creating a successful IT organization for today and for the future.

Related links

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Driving IT Business Alignment: One CIOs Journey

CIO MagazineCIO Magazine says marketing matters to business alignment

In our interviews of CIOs, they have told us that connecting what IT is doing to business strategy has become a higher priority than even things like improving technical orchestration and overall process excellence. Being CIO today has become much more about business alignment than technology alignment. This means that CIOs and their teams need to understand their firm’s business problems almost as well as they understand their implementations of information technology. One area where CIOs say they are trying to do a better job of alignment is in working with their firm’s Chief Marketing Officer. Confirming this is a recent CIO Magazine Survey that found initiatives around revenue, customer acquisition, and customer retention receiving top IT priority these days.

CIOGeiger IT solves a persistent business problem by aligning with the marketing team

One CIO that that has really taken this to heart is the Dale Denham who is the CIO at Geiger. Dale and his IT team decided that they needed to get closer to their firm’s marketing organization and by doing so was able to go after a persistent business problem and change the IT-business relationship in the process.

At Geiger, their marketing team was limited in their ability to add new products. Competitively, the marketing team needed to improve their product selection. However, they were hitting the wall in updating and maintaining their product mix. Geiger provides its customers with more than 5,000 products, each having as many as 350 variations.  This translates to a 175,000 product permutations to price and manage. At the same time, Geiger sells its products through 500 Sales Partners—this, in turn, can create an additional layer of permutation.

The source of this business problem was that Geiger’s ERP and Website systems that required the users to manipulate multiple screens to get to product data and product codes into the system. The system was difficult enough that it took about six weeks to train someone to input product data. Think about the time needed to then do this this across all products, product permutations, and channel partners.

To fix things, Dale and his team partnered with the business. Doing it together rather than separately enabled the IT organization and the business to collaborate and to build a better and more permanent partnership. Dale says, “We have really enjoyed implementing the solution, because the business units are now working very closely with IT”. Dale claims as well the relationship with their business units has gotten to be a very solid, trusting relationship with them, and very collaborative. They have learned to trust IT’s input, and IT has learned a lot from the business units about how they operate and like to operate.”

automationThe impact of working together is clear

The solution that the business and IT derived cut the time to train people in half. In fact, Dale says that new system users are relatively productive within a week, because the solution is faster and easier to use. Dale says that the time per product entry went down from an hour and half to thirty minutes. For this reason, marketing teams are more efficient. Overall, it reduced the process from two months to one week for them to update the customer facing website. By automating the process, they were able to speed up marketing processes. This means marketing can now add and extend to the existing marketing mix and increase customer satisfaction and potential increase customer upsell and cross sell.

The historical the process created a lot of efficiencies for marketing. Marketing staff is now much more focused on what they’re doing from day to day. They have the ability to update products faster from prices and this has stabilized business margins. At the same time, marketing was able to reduce invoice discrepancies. Given all of this, marketing staff is more engaged that they are able to get the job done in a timely manner and to be able to get to market faster with the products.

The solution took the data entry process down from ninety minutes to thirty minutes. And now with this increased efficiency, the marketing staff has focused more of its time on the quality of copy for the product and on getting the graphics of the images up to websites. This has improved overall customer experience. And of course they were able to expand their product offering. They now have three times the throughput capacity, which is what is going to allow Geiger to grow in the future as it provides more product options to customers.

Already they have found that customers are happier with the immediate larger breadth of product to choose from. Lastly, their leadership team is happier because they are able to get more opportunities to grow the business. And this gives them much more ability to satisfy customers and provide for the additional growth they need in the future.

Closing remarks

Clearly business and IT alignment is all the rage today. But it starts and ends with a team that solves meaningful business problems. Geiger is a great of example of how to do this right. If you want to learn more about what Geiger did and how they solved their marketing problems, please click this hyperlink.

Related links

Watch Dale Denham talk about Geiger’s success

How Is The CIO Role Starting To Change?

The CIO Challenged

How CFOs can change the conversation with their CIO?

The CFO viewpoint on data

CFOs discuss their technology priorities

Twitter: @MylesSuer

 

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