- Home Hubs from Google, Samsung, and Apple (who did not attend the show but still had a significant impact).
- Home Hub Ecosystems providing interoperability with cars, door locks, and household appliances.
- Autonomous cars, and intelligent cars
- Wearable devices such as smart watches and jewelry.
- Drones that take pictures and intelligently avoid obstacles. …Including people trying to block them. There is a bit of a creepy factor here!
- The next generation of 3D printers.
- And the intelligent baby pacifier. The idea is that it takes the baby’s temperature, but I think the sleeper hit feature on this product is the ability to locate it using GPS and a smart phone. How much money would you pay to get your kid to go to sleep when it is time to do so?
Digital Strategies Are Gaining Momentum
There is no escaping the fact that the vast majority of companies out there have active digital strategies, and not just in the consumer space. The question is: Are you going to be the disruptor or the disruptee? Gartner offered an interesting prediction here:
“By 2017, 60% of global enterprise organizations will execute on at least one revolutionary and currently unimaginable business transformation effort.”
It is clear from looking at CES, that a lot of these products are “experiments” that will ultimately fail. But focusing too much on that fact is to risk overlooking the profound changes taking place that will shake out industries and allow competitors to jump previously impassible barriers to entry.
IDC predicted that the Internet of Things market would be over $7 Trillion by the year 2020. We can all argue about the exact number, but something major is clearly happening here. …And it’s big.
Is Your Organization Ready?
A study by Gartner found that 52% of CEOs and executives say they have a digital strategy. The problem is that 80% of them say that they will “need adaptation and learning to be effective in the new world.” Supporting a new “Internet of Things” or connected device product may require new business models, new business processes, new business partners, new software applications, and require the collection and management of entirely new types of data. Simply standing up a new ERP system or moving to a cloud application will not help your organization to deal with the new business models and data complexity.
Architect’s Call to Action
Now is the time (good New Year’s resolution!) to get proactive on your digital strategy. Your CIO is most likely deeply engaged with her business counterparts to define a digital strategy for the organization. Now is the time to be proactive in terms of recommending the IT architecture that will enable them to deliver on that strategy – and a roadmap to get to the future state architecture.
Key Requirements for a Digital-ready Architecture
Digital strategy and products are all about data, so I am going to be very data-focused here. Here are some of the key requirements:
- First, it must be designed for speed. How fast? Your architecture has to enable IT to move at the speed of business, whatever that requires. Consider the speed at which companies like Google, Amazon and Facebook are making IT changes.
- It has to explicitly directly link the business strategy to the underlying business models, processes, systems and technology.
- Data from any new source, inside or outside your organization, has to be on-boarded quickly and in a way that it is immediately discoverable and available to all IT and business users.
- Ongoing data quality management and Data Governance must be built into the architecture. Point product solutions cannot solve these problems. It has to be pervasive.
- Data security also has to be pervasive for the same reasons.
- It must include business self-service. That is the only way that IT is going to be able to meet the needs of business users and scale to the demands of the changes required by digital strategy.
For a webinar on connecting business strategy to the architecture of business transformation see; Next-Gen Architecture: A “Business First” Approach for Agile Architecture. With John Schmidt of Informatica and Art Caston, founder of Proact.
For next-generation thinking on enterprise data architectures see; Think “Data First” to Drive Business Value
For more on business self-service for data preparation and a free software download.
A couple comments on the importance of integration platforms like Informatica in an EDW/Hadoop environment.
- Hadoop does mean you can do some quick and inexpensive exploratory analysis with little or no ETL. The issue is that it will not perform at the level you need to take it to production. As the webinar points out, applying some structure to the data with columnar files (not RDBMS) will dramatically speed up query performance.
- The other thing that makes an integration platform more important than ever is the explosion of data complexity. As Dr. Kimball put it:
“Integration is even more important these days because you are looking at all sorts of data sources coming in from all sorts of directions.”
To perform interesting analyses, you are going to have to be able to join data with different formats and different semantic meaning. And that is going to require integration tools.
- Thirdly, if you are going to put this data into production, you will want to incorporate data cleansing, metadata management, and possibly formal data governance to ensure that your data is trustworthy, auditable, and has business context. There is no point in serving up bad data quickly and inexpensively. The result will be poor business decisions and flawed analyses.
For Data Warehouse Architects
The challenge is to deliver actionable content from the exploding amount of data available. You will need to be constantly scanning for new sources of data and looking for ways to quickly and efficiently deliver that to the point of analysis.
For Enterprise Architects
The challenge with adding Big Data to Your EDW Architecture is to define and drive a coherent enterprise data architecture across your organization that standardizes people, processes, and tools to deliver clean and secure data in the most efficient way possible. It will also be important to automate as much as possible to offload routine tasks from the IT staff. The key to that automation will be the effective use of metadata across the entire environment to not only understand the data itself, but how it is used, by whom, and for what business purpose. Once you have done that, then it will become possible to build intelligence into the environment.
For more on Informatica’s vision for an Intelligent Data Platform and how this fits into your enterprise data architecture see Think “Data First” to Drive Business Value
The white paper, “The Great Rethink: Building a Highly Responsive and Evolving Data Integration Architecture” by Claudia Imhoff and Joe McKendrick provides an interesting view of what such an architecture might look like. The paper describes how to move from ad hoc Data Integration to an Enterprise Data Architecture. The paper also describes an approach towards building architectural maturity and a next-generation enterprise data architecture that helps organizations to be more competitive.
Organizations that look to compete based on their data are searching for ways to design an architecture that:
- On-boards new data quickly
- Delivers clean and trustworthy data
- Delivers data at the speed required of the business
- Ensures that data is handled in secure way
- Is flexible enough to incorporate new data types and new technology
- Enables end user self-service
- Speeds up the speed of business value delivery for an organization
In my previous blog, Digital Strategy and Architecture, we discussed the demands that digital strategies are putting on enterprise data architecture in particular. Add to that the additional stress from business initiatives such as:
- Supporting new mobile applications
- Moving IT applications to the cloud – which significantly increases data management complexity
- Dealing with external data. One recent study estimates that a full 25% of the data being managed by the average organization is external data.
- Next-generation analytics and predictive analytics with Hadoop and No SQL
- Integrating analytics with applications
- Event-driven architectures and projects
- The list goes on…
The point here is that most people are unlikely to be funded to build an enterprise data architecture from scratch that can meet all these needs. A pragmatic approach would be to build out your future state architecture in each new strategic business initiative that is implemented. The real challenge of being an enterprise architect is ensuring that all of the new work does indeed add up to a coherent architecture as it gets implemented.
The “Great Rethink” white paper describes a practical approach to achieving an agile and responsive future state enterprise data architecture that will support your strategic business initiatives. It also describes a high level data integration architecture and the building blocks to achieving that architecture. This is highly recommended reading.
Also, you might recall that Informatica sponsored the Informatica Architect’s Challenge this year to design an enterprise-wide data architecture of the future. The contest has closed and we have a winner. See the site for details, Informatica Architect Challenge .
What is digitization?
It can take many forms. Here are a few types of digitization of business and examples:
|Products that add digital components||Sports equipment with sensors for immediate feedback|
|Products sold through digital channels||Conde Nast magazines|
|“Solutions” that are assembled and delivered in digital channels||USAA Insurance|
|Products that are entirely digital||Apple iTunes, eSurance, PayPal, Google|
|Companies monetizing their data||Healthcare clinical data|
The really interesting thing about digitization that you can see from some of the examples above is that it enables new competition to enter your space and competitors to leap industry boundaries. The concept of “barriers to entry” itself is eroding.
The Impact of Digitization on IT
Some interesting facts from MIT CISR’s research with Boards of Directors on digitization jumped out at me:
- Board members estimate that 32% of company’s revenues are under threat from digital disruption. This is a really stunning number when you think about it.
- Half of Board members believe that their board’s ability to oversee the strategic use of IT is “less than effective.”
- 26% of Boards hired consultants to evaluate major projects or the IT unit.
- 60% of Boards want to spend more time on digital issues next year.
The Impact of Digitization for Architects?
It boils down to two things:
- Architects need to deliver a digital platform to enable business agility in a time of increasing competition and disruption. This includes standardization around business processes, data, and the platform.
- Architects need to get more proactive in the strategy process for their organizations both in terms of the platforms and architecture and in terms of a general understanding of the challenges and opportunities that arise from digital disruption.
For more on enterprise data architecture, best practices and reference architectures see the eBook: Think “Data First” to Drive Business Value
We are way past the point where the architecture needs to be aligned with business goals and value delivery. That is necessary but no longer sufficient. We are now at the point where architecture needs to be central to the creation of an organization’s strategy process. Not to get hyperbolic, but anything less is risky for your career.
The Challenge: Digitization
I just came back from the MIT Center for Information Systems Research (CISR) research forum. One of the leading topics was digitization and how every business is becoming digitized. To those in the High Tech industry, this may be an “of course” topic, but to most other industries it is a wrenching change. Even those who are comfortable with the idea of digitization risk taking this too lightly.
The fact is that most products and services will have a digital component to them in the near future and an increasing number of products and services will be entirely digital. The fact is that digitization and the technologies that enable it are going to bring about a period of increased disruption. This will mean:
- New competitors. Examples: autonomous cars, sports equipment with embedded sensors that provide feedback, personal assistant fully capable of making decisions and taking action. Gartner is predicting that almost everything over $100 will have a sensor by the turn of the decade.
- New competitors jumping across industry boundaries. Examples: Apple iTunes and Google cars to name a few.
Why Architects Are Important
Architects are in a unique position to not only understand the technology trends driving this disruption, but they also to know how to leverage these trends to drive business value within their organizations. The very best architects are going to be those who are deeply involved in defining the organization strategy, not just figuring out how to implement it.
Evidence of Change
Many architects and CIOs currently report very little interest from upper management in IT. That is about to change, and quickly. At the MIT CISR forum I attended last week, they presented research around this area that is very telling:
- Half of Board of Directors members believe that their board’s ability to oversee the strategic use of IT is “less than effective.”
- 26% of Boards hired consultants to evaluate major projects or the IT unit.
- 60% of Boards want to spend more time on digital issues next year.
- Board members estimate that 32% of their company’s revenues are under threat from digital disruption.
That last bullet is the really interesting piece of research. 32% is a huge impact.
The Role of Data in Digitization
Digitization by its very nature is all about data. The winners in this space will be those that can manage and deliver relevant data the quickest. The question for architects is this: Do you have the architecture and agility to take advantage of the coming disruptions and opportunities? Are you actively advising your organization on how to leverage them? As we have documented in many previous blogs, many organizations are poorly positioned to manage their data as a discoverable and easily sharable asset. This will essential for:
- Delivering business initiatives and showing value faster (agility).
- Enabling business self-service so that IT is not the bottleneck in new analyses and decisions.
All of this requires new thinking around enterprise data architecture. For fresh thinking on this subject see Thinking “Data First” to Drive Business Value.
This got me thinking: What is the biggest bottleneck in the delivery of business value today? I know I look at things from a data perspective, but data is the biggest bottleneck. Consider this prediction from Gartner:
“Gartner predicts organizations will spend one-third more on app integration in 2016 than they did in 2013. What’s more, by 2018, more than half the cost of implementing new large systems will be spent on integration. “
When we talk about application integration, we’re talking about moving data, synchronizing data, cleansing, data, transforming data, testing data. The question for architects and senior management is this: Do you have the Data Foundation for Execution you need to drive the business results you require to compete? The answer, unfortunately, for most companies is; No.
All too often data management is an add-on to larger application-based projects. The result is unconnected and non-interoperable islands of data across the organization. That simply is not going to work in the coming competitive environment. Here are a couple of quick examples:
- Many companies are looking to compete on their use of analytics. That requires collecting, managing, and analyzing data from multiple internal and external sources.
- Many companies are focusing on a better customer experience to drive their business. This again requires data from many internal sources, plus social, mobile and location-based data to be effective.
When I talk to architects about the business risks of not having a shared data architecture, and common tools and practices for enterprise data management, they “get” the problem. So why aren’t they addressing it? The issue is that they find that they are only funded to do the project they are working on and are dealing with very demanding timeframe requirements. They have no funding or mandate to solve the larger enterprise data management problem, which is getting more complex and brittle with each new un-connected project or initiative that is added to the pile.
Studies such as “The Data Directive” by The Economist show that organizations that actively manage their data are more successful. But, if that is the desired future state, how do you get there?
Changing an organization to look at data as the fuel that drives strategy takes hard work and leadership. It also takes a strong enterprise data architecture vision and strategy. For fresh thinking on the subject of building a data foundation for execution, see “Think Data-First to Drive Business Value” from Informatica.
* By the way, Informatica is proud to announce that we are now a sponsor of the MIT Center for Information Systems Research.
Adrian gathered experts and built workgroups to dig into the issue and do root cause analysis. The workgroups came back with some pretty surprising results.
- Most people expected that “incorrect data” (missing, out of date, incomplete, or wrong data) would be the main problem. What they found was that this was only #5 on the list of issues.
- The #1 issue was “Too much data.” People working with the data could not find the data they needed because there was too much data available, and it was hard to figure out which was the data they needed.
- The #2 issue was that people did not know the meaning of data. And because people had different interpretations of the data, the often produced analyses with conflicting results. For example, “claims paid date” might mean the date the claim was approved, the date the check was cut or the date the check cleared. These different interpretations resulted in significantly different numbers.
- In third place was the difficulty in accessing the data. Their environment was a forest of interfaces, access methods and security policies. Some were documented and some not.
In one of the workgroups, a senior manager put the problem in a larger business context;
“Not being able to leverage the data correctly allows competitors to break ground in new areas before we do. Our data in my opinion is the ‘MOST’ important element for our organization.”
What started as a relatively straightforward data quality project became a more comprehensive enterprise data management initiative that could literally change the entire organization. By the project’s end, Adrian found himself leading the data strategy of the organization.
This kind of story is happening with increasing frequency across all industries as all businesses become more digital, the quantity and complexity of data grows, and the opportunities to offer differentiated services based on data grow. We are entering an era of data-fueled organizations where the competitive advantage will go to those who use their data ecosystem better than their competitors.
Gartner is predicting that we are entering an era of increased technology disruption. Organizations that focus on data as their competitive edge will have the advantage. It has become clear that a strong enterprise data architecture is central to the strategy of any industry-leading organization.
For more future-thinking on the subject of enterprise data management and data architecure see Think ‘Data First” to Drive Business Value
“Enterprise Architecture needs to be the forward, business facing component of IT. Architects need to create a regular structure for IT based on the service and product line functions/capabilities. They need to be connected to their business counterparts. They need to be so tied to the product and service road map that they can tie changes directly to the IT roadmap. Often times, I like to pair a Chief Business Strategist with a Chief Enterprise Architect”.
To get there, Enterprise Architects are going to have to think differently about enterprise architecture. Specifically, they need think “data first” to break through the productivity barrier and deliver business value in the time frame that business requires it.
IT is Not Meeting the Needs of the Business
A study by McKinsey and Company has found that IT is not delivering in the time frame that business requires. Even worse, the performance ratings have been dropping over the past three years. And even worse than that, 20% of the survey respondents are calling for a change in IT leadership.
Our talks with CIOs and Enterprise Architects tell us that the ability to access, manage and deliver data on a timely basis is the biggest bottleneck in the process of delivering business initiatives. Gartner predicts that by 2018, more than half the cost of implementing new large systems will be spent on integration.
The Causes: It’s Only Going to Get Worse
Data needs to be easily discoverable and sharable across multiple uses. Today’s application-centric architectures do not provide that flexibility. This means any new business initiative is going to be slowed by issues relating to finding, accessing, and managing data. Some of the causes of problems will include:
- Data Silos: Decades of applications-focused architecture have left us with unconnected “silos of data.”
- Lack of Data Management Standards: The fact is that most organizations do not manage data as a single system. This means that they are dealing with a classic “spaghetti diagram” of data integration and data management technologies that are difficult to manage and change.
- Growth of Data Complexity: There is a coming explosion of data complexity: partner data, social data, mobile data, big data, Internet of Things data.
- Growth of Data Users: There is also a coming explosion of new data users, who will be looking to self-service.
- Increasing Technology Disruption: Gartner predicts that we are entering a period of increased technology disruption.
Looking forward, organizations are increasingly running on the same few enterprise applications and those applications are rapidly commoditizing. The point is that there is little competitive differentiation to be had from applications. The only meaningful and sustainable competitive differentiation will come from your data and how you use it.
Recommendations for Enterprise Architects
- Think “data first” to accelerate business value delivery and to drive data as your competitive advantage. Designing data as a sharable resource will dramatically accelerate your organization’s ability to produce useful insights and deliver business initiatives.
- Think about enterprise data management as a single system. It should not be a series of one-off, custom, “works of art.” You will reduce complexity, save money, and most importantly speed the delivery of business initiatives.
- Design your data architecture for speed first. Do not buy into the belief that you must accept trade-offs between speed, cost, or quality. It can be done, but you have to design your enterprise data architecture to accomplish that goal from the start.
- Design to know everything about your data. Specifically, gather and carefully manage all relevant metadata. It will speed up data discovery, reduce errors, and provide critical business context. A full compliment of business and technical metadata will enable recommendation #5.
- Design for machine-learning and automation. Your data platform should be able to automate routine tasks and intelligently accelerate more complex tasks with intelligent recommendations. This is the only way you are going to be able to meet the demands of the business and deal with the growing data complexity and technology disruptions.
Technology disruption will bring challenges and opportunities. For more on this subject, see the Informatica eBook, Think ‘Data First’ to Drive Business Value.
The conversation at the Gartner Enterprise Architecture Summit was very interesting last week. They central them for years had been idea of closely linking enterprise architecture with the goals and strategy. This year, Gartner added another layer to that conversation. They are now actively promoting the idea of enterprise architects as strategists.
The reason why is simple. The next wave of change is coming and it will significantly disrupt everybody. Even worse, your new competitors may be coming from other industries.
Enterprise architects are in a position to take a leading role within the strategy process. This is because they are the people who best understand both business strategy and technology trends.
Some of the key ideas discussed included:
- The boundaries between physical and digital products will blur
- Every organization will need a technology strategy to survive
- Gartner predicts that by 2017: 60% of the Global 1,000 will execute on at least one revolutionary and currently unimaginable business transformation effort.
- The change is being driven by trends such as mobile, social, the connectedness of everything, cloud/hybrid, software-defined everything, smart machines, and 3D printing.
I agree with all of this. My view is that this means that it is time for enterprise architects to think very differently about architecture. Enterprise applications will come and go. They are rapidly being commoditized in any case. They need to think like strategists; in terms of market differentiation. And nothing will differentiate an organization more than their data. Example: Google autonomous cars. Google is jumping across industry boundaries to compete in a new market with data as their primary differentiator. There will be many others.
Years of thinking of architecture from an application-first or business process-first perspective have left us with silos of data and the classic ‘spaghetti diagram” of data architecture. This is slowing down business initiative delivery precisely at the time organizations need to accelerate and make data their strategic weapon. It is time to think data-first when it comes to enterprise architecture.
You will be seeing more from Informatica on this subject over the coming weeks and months.
Take a minute to comment on this article. Your thoughts on how we should go about changing to a data-first perspective, both pro and con are welcomed.
Also, remember that Informatica is running a contest to design the data architecture of the year 2020. Full details are here.
What would the ideal data architecture of the year 2020 look like?
Informatica want’s to know how YOU would answer that question. For this reason, we’ve created the Informatica Architect’s Challenge, a chance for YOU to share how you would approach enterprise data architecture differently. Send us your proposal and you could win 100 iPad Minis for the school of your choice.
There are a lot of challenges to think about here, but let’s start with these:
- Organizations are requiring dramatically faster delivery of business initiatives and are unhappy with the current performance of IT. Think this is “marketing hyperbole?” See the McKinsey survey.
- Data in most organizations is highly fragmented and scattered across dozens or hundreds of different systems. Simply finding and prepping data is becoming the majority of the work in any IT project.
- The problem is only going to get worse as cloud, 3rd party data, social, mobile, big data, and the Internet of Things dramatically increase the complexity of enterprise data environments.
Data is the one thing that uniquely differentiates your organization from its competitors. The question is: How you are going to architect to deliver the data to fuel your future business success? How will you manage the challenges of increasing complexity while delivering with the speed your organization requires?
It’s a chance make a positive contribution for education, while at the same time gaining some professional visibility for yourself as a thought leader. We can’t wait to see what you’ll create!
For additional details, please visit the Informatica Architect’s Challenge official page.