Great data drives profits
We live in an age where technology is intertwined with our personal and business lives. Our machines, devices, and activities on social networks and the web are generating an explosion of data. It is this trove of big data that most executives in commercial or public enterprises believe hold the keys to untold insights. In fact, a study from Economist Intelligence Unit, reports that some 97% of executives believe that unlocking the value from this data is a strategic priority.
This is confirmed strongly in the CIO’s annual survey in 2014 with 72% of respondents stating “data use” as their top priority. To fully grasp the importance of this data, you need to consider what this data potentially represents for the business. And that requires a little journey back in our computing history.
Back-office and front-office automation
The first generations of software were focused primarily on automating back-office functions such as finance, manufacturing, and procurement. Data was pretty much reflected an event or, more accurately, a transaction.
The same was generally the case for the next wave of front-office applications, such as CRM. Data remained a by-product and was analyzed from time to time to provide trends and insights to optimize business processes. The value though was as it helped organizations to achieve the most profitable outcomes. In this age of productivity, we used it to analyze where we sold best, what products we sold most of, what was the most profitable region, division, region, etc.
Enter the age of engagement
The last decade has given rise to new technologies and applications that operated in a different fashion. Social platforms like Facebook or mobile phone data no longer represent transactions or events only, but reflect actual records and behaviors. It shows what you like or dislike – where you are – who are the members of your household or circle of friends. Most people refer to this as data.
This engagement data has potentially massive value when you can combine it with the traditional data landscape. If you are interacting with a company (e.g., shopping on a web site), it can feed you relevant pieces of information at the right time, shaping the outcome in a direction they desire. For example, if you shop on Amazon, you likely start with a regular search. But then things change compared to a normal Google search. Suddenly you get recommendations, reviews, alternative products, add-on products, special offers. And every time you click on a link, ensuing recommendations become more personalized and targeted, with new suggestions and offers designed to lead you toward a desired outcome – in their case a purchase.
At the heart of this experience is data — engagement data has become the fuel to deliver the most engaging experience and nudge the user towards a desired outcome. Of course this is not limited to retail, but is applied in every industry.
Companies are racing to unlock the value from the mass of data they collect in order to build new data-centric products and start fueling their own customer engagements. And to do so faster and better than the competition. But the “Data Directive” study makes a sobering statement in this regard: Only 12% of the executives thought they were highly effective at this and 15% thought they were better than the competition.
The imperative to design for great data
The reason many companies fall short on their strategic intent with data is locked up in our historical approach to data. Data was never the centerpiece of our thinking. The applications were. The relative few applications representing our back-office and even front-office applications looked pretty similar with similar data structures and concepts. But to fuel these types of engagements when they happen requires different thinking and potentially different technologies. The most fundamental aspect is how good the data needs to be to be successful.
Let’s consider two examples:
- The Google self-driving car has the same functional systems as a normal car to turn, brake, and accelerate. However, the thing that makes the care drive and steer in a (hopefully) proper manner is data — engagement data — data from the navigation system, sensors, and cameras. How accurate does this data need to be though?
- And revisiting our Amazon example, what are the chances of you selecting the recommended product if you already purchased that product last week when you were on the site?
There is an imperative for great data: To be able to design our environment in such a way that we can deliver great data continuously to any place or person that needs it. Great data is simply data that is clean, safe, and connected.
- Clean: Data that is accurate, de-duplicated, timely, and complete.
- Safe: Data that is treated with the appropriate level of security and confidentiality based on the policies regulating your business or industry.
- Connected: Data that links all the silos to reflect the whole truth consistently.
The challenge for most companies is that they can deliver clean, safe, and connected data for a single project at a time through the heroic efforts of scare IT resources. And this process is restarted every time a new request is received.
More often than not, each new project is executed by different teams, using different technologies resulting in poor ROI and slow time–to-value. If we are going to broadly unlock the value in our data to drive the next wave of profits, it is time to think of systematic ways to deliver great data to every process, person, or application. Or risk becoming one of the 85% of companies that lag their competitors in the ability to unlock the strategic value of data.
Some parting thoughts
Consider the following three practical themes as you develop your own great data strategy:
- Designing a system of integration that can continuously deliver great data requires you standardize across all your uses cases, all your projects, and all data types — whether on-premise or in the cloud or both.
- Establishing end-to-end metadata that is shared across your entire data system. If our data tells us about our business, metadata tells us about our data system.
- Designing for self-service and business-IT collaboration. Data is the responsibility of everyone in the company – not just IT.
For more on the imperative of putting data at the center of your organization’s future efforts, read the ebook, Data Drives Profit.
No, really, you do.
When it comes to data strategy, there is a growing divide between IT leaders and IT practitioners. New research from Informatica reveals a deep disconnect between IT executives and rank-and-file workers.
- 61% of IT executives believe that improving data management strategy will help them be more responsive to customers. In contrast, only 42% of IT workers feel the same way.
- 63% of IT executives say that effective data use enhances business agility. Only 41% of their IT workers agree.
- 55% of IT executives regularly consult with business leaders on data management strategies. Only 17% of their IT staff do the same.
Why does this matter? Because if you can’t come together, it will hurt your business. Organizations that are smarter about data perform better financially. According to recent research by the Economist, organizations that use data strategically have a significantly higher EBITA (earnings before interest, taxes, and amortization) than those who do not.
Better data strategy? Better bottom line.
To drive revenue, IT executives and workers need to align around their data strategy. The Informatica ebook “Research: Data Drives Profit,” outlines all the evidence. In this eBook, we share four practices that fuel the strategic use of data.
Right Data, Right Time, Right Way
We now live in a data-centric world. When the right data is available and used at the right time, every application and every process becomes smarter than it was before. This, in turn, makes every person “smarter” as they make their daily business decisions.
In order to unleash your organization’s full potential, it is critical to think differently about your data:
- Data can no longer be defined by its source or application. Instead, data needs to be managed as an interconnected ecosystem spanning all applications, processes, computing platforms, devices, users and use cases.
- The data technology landscape will never again be a static standardized architecture. Instead, it will be constantly changing and adapting to incorporate new technologies or applications;
- With the consumerization of IT, companies are sitting on an ever-growing pool of data and technology skills, in both IT as well as the business. It is vital to harness all of this for the combined good of the company.
We want to know what you think. Reply in the comments and let us know whether you agree or disagree with the above statement and whether you think there’s alignment around it within your IT organization. (If you care to share your title or categorize yourself as an IT executive or IT staff member, that’d be helpful, too.) I’ll review the results and report out in a future blog post.
By 1874, Western Union President William Orton called telegraph messaging traffic “the nervous system of commerce.” In 1877 Western Union entered the telephone market using Alexander Graham Bell’s invention. And the rest, as they say, is history.
What do Western Union, Bell, and the telephone have to do with a discussion about data integration? A lot! Those early days laid the foundations for today’s connected world of business. Earlier today, Informatica released an announcement that I believe is of similar importance in unleashing the potential of the technology landscape we live in.
The speed of business is faster than ever before, fueled by technology innovations such as cloud, mobile, big data, and social. The barriers to entry into new markets are lower than ever before – big companies can act nimble and small, while small companies can appear large and achieve global reach.
McKinsey & Company recently published a study estimating the spate of technological disruptions (cloud, mobile, internet of things, etc.) will generate between $14 and $33 trillion of economic value by 2025. Implementing specific initiatives to use these technologies for greater economic value will require better harnessing the data and information around you – supporting faster decisions, building smarter applications, and transforming businesses. It is said that the new Boeing 787 generates around 1 terabyte of data per flight per engine. Then there are approximately 500 gigabytes generated by the rest of the plane’s systems each flight. Consider how airlines can use this information to make flights safer, more efficient and more enjoyable?
One of the primary barriers to unleashing this potential is that IT requires time to adopt new technologies. For example, for airlines to unleash the value of this new information generated in-flight, they need to collect and store the data utilizing new big data technologies. Then they need to combine the data with other systems like booking and maintenance, and deliver it to some specific application. This involves new technologies which IT needs to master. Our business ideas are now outpacing our technical readiness.
The Informatica VibeTM virtual data machine can help solve these challenges. In short, Vibe allows you to break data management tasks into two parts – (1) a visual mapping of the business logic for integrating and managing data and (2) the executable plan which is optimized and then generated to perform the data integration tasks on a variety of computing platforms. This separation of logic from physical execution allows you to map once and then deploy anywhere – over and over – without the need for recoding. Vibe seamlessly shields you from changes in the underlying technologies, programming languages, data sources, etc. If your computing platform is Oracle today and Hadoop tomorrow, no problem. Vibe lets you change deployment platforms via a simple configuration change—the virtual data machine handles the detailed changes in language and execution plan underneath. No programming skills required.
While Vibe is a technology component, it has the ability to deliver great business impact by enabling you to unleash the value in your data and information.
Deliver new initiatives 5x faster. By allowing developers to focus on the mapping, cleansing, and management of data, and allowing Vibe to generate the optimal execution code, the development effort is substantially reduced. Add to this the ease with which we can add new technologies (data sources, computing platforms, data types) without requiring a deep investment in having to learn new programming skills.
Use ALL your data for your next business idea. The next wave of applications business will pursue is not in the back office (finance, payroll), but rather at the points of interaction with customers, employees or citizens. For example, the McKinsey study suggests up to $10.8 trillion in economic impact from the mobile internet. The key value in many mobile applications comes from rapidly mashing up data from a variety of sources to enable a rich customer interaction on the device. For instance, a number of retail-oriented apps are now combining your loyalty information, in-store promotions, your location, and local competitor discounts to offer you specials when you are in the store or nearby.
Reduce cost. Everyone wants to deliver IT cheaper. In addition to the speed with which your developers can develop new applications, Vibe also allows you to embrace lower-cost technologies such as Hadoop and cloud platforms. Your existing data integration skills and mappings automatically get converted into new technologies like Hadoop at the click of a button.
Future-proofing. The one thing we are learning in the technology space is that change is going to remain with us. The change is accelerating, and it is unpredictable. There will be new databases, new mobile platforms, new technologies such as virtual reality– all with the potential to drastically transform the business. For more than 15 years, Informatica has architected new, expanded capabilities on top of Vibe to handle the latest technologies as they have come to market – all aimed at lowering the barriers to information.
I started my blog discussing how telephones changed our world. Even today, we cannot imagine a world without phones. That dial tone is the promise of a connected world, and it translates your keypad entries into some code that routes your call to another person. For data, I see Vibe as a key enabling technology that can unleash the incredible potential locked up in our information to make the world a better place.