Category Archives: Business/IT Collaboration
Recently, we posted an initial discussion between Informatica’s CMO Marge Breya and CIO Eric Johnson, explaining how CIOs and CMOs can align and thrive. In the dialog below, Breya and Johnson provide additional detail on how their departments partner effectively.
Q: Pretty much everyone agrees that marketing has changed from an art to a science. How does that shift translate into how you work together day to day?
Eric: The different ways that marketers now have to get to the prospects and customers to grow their marketshare has exploded. It used to be a single marketing solution that was an after-thought, and bolted on to the CRM solution. Now, there are just so many ways that marketers have to consider how they market to people. It’s driven by things going on in the market, like how people interact with companies and the lifestyle changes people have made around mobile devices.
Marge: Just look at the sheer number of systems and sources of data we care about. If you want to understand upsell and cross-sell for customers you have to look at what’s happening in the ERP system, what’s happened from a bookings standpoint, whether the customer is a parent or child of another customer, how you think about data by region, by industry by job title. And there’s how you think about successful conversion of leads. Is it the way you’d predicted? What’s your most valuable content? Who’s your most valuable outlet or event? What’s your ROI? You can’t get that from any one single system. More and more, it’s all about conversion rates, about forecasting and theories about how the business is working from a model standpoint. And I haven’t even talked about social.
Q: With so many emerging technologies to look at, how do CMOs reconcile the need to quickly add new products, while CIOs reconcile the need for everything to work securely and well together?
Eric: There’s this yin and yang that’s starting to build between the CIO and the CMO as we both understand each other and the world we each live in, and therefore collaborate and partner more. But at the same time, there’s a tension between a CMO’s need to bring in solutions very quickly, and the CIO’s need to do some basic vetting of that technology. It’s a tension between speed vs. scale and liability to the company. It’s on a case-by-case basis, but as a CIO you don’t say “no.” You give options. You show CMOs the tradeoffs they’re going to make.
There are also risks that are easy to take and worth taking. They won’t cause any problems with the enterprise on a security or integration perspective, so let’s just try it. It may not work — and that’s OK.
Marge: There’s temptation across departments for the shiny new object. You’ll hear about a new technology, and you think this might solve our problems, or move the business faster. The tension even within the marketing department is: do we understand how and if it will impact the business process? And do we understand how that business process will have to change if the shiny new object comes on board?
Q: CMOs are getting data from potentially hundreds of sources, including partners, third parties, LinkedIn and Google. How do the two of you work together to determine a trustworthy data source? Do you talk about it?
Eric: The issue of trusting your data and making sure you’re doing your due diligence on it is incredibly important. Without doing that, you are running the risk of finding yourself in a very tricky situation from a legal perspective, and potentially a liability perspective. To do that, we have a lot of technology that helps us manage a lot data sources coming into a single source of truth.
On top of that, we are working with marketers who are much more savvy about technology and data. And that makes IT’s job easier — and our partnership better — because we are now talking the same language. Sometimes it’s even hard to tell where the line between the two groups actually sits. Some of the marketing people are as technical as the IT people, and some of the IT people are becoming pretty well-versed in marketing.
Q: How do you decide what technologies to buy?
Marge: A couple of weeks ago we went on a shopping trip, and spent the day at a venture capital firm looking at new companies. It was fun. He and I were brainstorming and questioning each other to see if each technology would be useful, and could we imagine how everything would go together. We first explored possibilities, and then we considered whether it was practical.
Eric: Ultimately, Marge owns the budget. But before the budgeting cycle we sit down to discuss what things she wants to work on, and whether she wants to swap technology out. I make sure Marge is getting what she needs from the technologies. There’s a reliance on the IT team to do some due diligence on the technical aspects of this technology: Does it work. Do we want to do business with these people? Is it going to scale? So each party has a role to play in evaluating whether it’s a good solution for the company. As a CIO you don’t say “no” unless there’s something really bad, and you hope you have a relationship with the CMO where you can say here are the tradeoffs you’re making. You say no one has an agenda here, but here are the risks you have to be ok taking. It’s not a “no.” It’s options.
Salesforce.com is one of the most widely used cloud applications across every industry. Initially, Salesforce gained dominance from mid-market customers due to the agility and ease of deployment that the SaaS approach delivered. A cloud-based CRM system enabled SMB companies to easily automate sales processes that recorded customer interactions during the sales cycle and scale without costly infrastructure to maintain. This resulted in faster growth, thereby showing rapid ROI of a Salesforce deployment in most cases.
The Eye of the Enterprise
When larger enterprises saw the rapid growth that mid-market players had achieved, they realized that Salesforce was a unique technology enabler capable of helping their businesses to also speed time to market and scale more effectively. In most enterpises, the Salesforce deployments were driven by line-of-business units such as Sales and Customer Service, with varying degrees of coordination with central IT groups – in fact, most initial deployments of Salesforce orgs were done fairly autonomously from central IT.
With Great Growth Comes Greater Integration Challenges
When these business units needed to engage with each other to run cross functional tasks, the lack of a single customer view across the siloed Salesforce instances became a problem. Each individual Salesforce org had its own version of the truth and it was impossible to locate where in the sales cycle each customer was in respect to each business unit. As a consequence, cross-selling and upselling became very difficult. In short, the very application that was a key technology enabler for growth was now posing challenges to meet business objectives.
Scaling for Growth with Custom Apps
While many companies use the pre-packaged functionality in Salesforce, ISVs have also begun building custom apps using the Force.com platform due to its extensibility and rapid customization features. By using Salesforce to build native applications from the ground up, they could design innovative user interfaces that expose powerful functionality to end users. However, to truly add value, it was not just the user interface that was important, but also the back-end of the technology stack. This was especially evident when it came to aggregating data from several sources, and surfacing them in the custom Force.com apps.
On April 23rd at 10am PDT, you’ll hear how two CIOs from two different companies tackled the above integration challenges with Salesforce: Rising Star finalist of the 2013 Silicon Valley Business Journal CIO Awards, Eric Johnson of Informatica, and Computerworld’s 2014 Premier 100 IT Leaders, Derald Sue of InsideTrack.
Bad data is bad for business. Ovum Research reported that poor quality data is costing businesses at least 30% of revenues. Never before have business leaders across a broad range of roles recognized the importance of using high quality information to drive business success. Leaders in functions ranging from marketing and sales to risk management and compliance have invested in world-class applications, six sigma processes, and the most advanced predictive analytics. So why are you not seeing more return on that investment? Simply put, if your business-critical data is a mess, the rest doesn’t matter.
Not all business leaders know there’s a better way to manage their business-critical data. So, I asked Dennis Moore, the senior vice president and general manager of Informatica’s MDM business, who clocked hundreds of thousands of airline miles last year visiting business leaders around the world, to talk about the impact of using accurate, consistent and connected data and the value business leaders can gain through master data management (MDM).
Q. Why are business leaders focusing on business-critical data now?
A. Leaders have always cared about their business-critical data, the master data on which their enterprises depend most — their customers, suppliers, the products they sell, the locations where they do business, the assets they manage, the employees who make the business perform. Leaders see the value of having a clear picture, or “best version of the truth,” describing these “master data” entities. But, this is hard to come by with competing priorities, mergers and acquisitions and siloed systems.
As companies grow, business leaders start realizing there is a huge gap between what they do know and what they should know about their customers, suppliers, products, assets and employees. Even worse, most businesses have lost their ability to understand the relationships between business-critical data so they can improve business outcomes. Line of business leaders have been asking questions such as:
- How can we optimize sales across channels when we don’t know which customers bought which products from which stores, sites or suppliers?
- How can we quickly execute a recall when we don’t know which supplier delivered a defective part to which factory and where those products are now?
- How can we accelerate time-to-market for a new drug, when we don’t know which researcher at which site used which combination of compounds on which patients?
- How can we meet regulatory reporting deadlines, when we don’t know which model of a product we manufactured in which lot on which date?
Q. What is the crux of the problem?
A. The crux of the problem is that as businesses grow, their business-critical data becomes fragmented. There is no big picture because it’s scattered across applications, including on premise applications (such as SAP, Oracle and PeopleSoft) and cloud applications (such as Salesforce, Marketo, and Workday). But it gets worse. Business-critical data changes all the time. For example,
- a customer moves, changes jobs, gets married, or changes their purchasing habits;
- a suppliers moves, goes bankrupt or acquires a competitor;
- you discontinue a product or launch a new one; or
- you onboard a new asset or retire an old one.
As all this change occurs, business-critical data becomes inconsistent, and no one knows which application has the most up-to-date information. This costs companies money. It saps productivity and forces people to do a lot of manual work outside their best-in-class processes and world-class applications. One question I always ask business leaders is, “Do you know how much bad data is costing your business?”
Q. What can business leaders do to deal with this issue?
A. First, find out where bad data is having the most significant impact on the business. It’s not hard – just about any employee can share stories of how bad data led to a lost sale, an extra “truck roll,” lost leverage with suppliers, or a customer service problem. From the call center to the annual board planning meeting, bad data results in sub-optimal decisions and lost opportunities. Work with your line of business partners to reach a common understanding of where an improvement can really make a difference. Bad master data is everywhere, but bad master data that has material costs to the business is a much more pressing and constrained problem. Don’t try to boil the ocean or bring a full-blown data governance maturity level 5 approach to your organization if it’s not already seeing success from better data!
Second, focus on the applications and processes used to create, share, and use master data. Many times, some training, a tweak to a process, or a new interface can be created between systems, resulting in very significant improvements for the users without major IT work or process changes.
Lastly, look for a technology that is purpose-built to deal with this problem. Master data management (MDM) helps companies better manage business-critical data in a central location on an ongoing basis and then share that “best version of the truth” with all on premise and cloud applications that need it.
Let’s use customer data as an example. If valuable customer data is located in applications such as Salesforce, Marketo, Seibel CRM, and SAP, MDM brings together all the business-critical data, the core that’s the same across all those applications, and creates the “best version of the truth.” It also creates the total customer relationship view across functions, product lines and regions, which CRM promised but never delivered.
MDM then shares that “mastered” customer data and the total customer relationship view with the applications that want it. MDM can be used to master the relationships between customers, such as legal entity hierarchies. This helps sales and customer service staff be more productive, while also improving legal compliance and management decision making. Advanced MDM products can also manage relationships across different types of master data. For example, advanced MDM enables you to relate an employee to a project to a contract to an asset to a commission plan. This ensures accurate and timely billing, effective expense management, managed supplier spend, and even improved workforce deployment.
When your sales team has the best possible customer information in Salesforce and the finance team has the best possible customer information in SAP, no one wastes time pulling together spreadsheets of information outside of their world-class applications. Your global workforce doesn’t waste time trying to investigate whether Jacqueline Geiger in one system and Jakki Geiger in another system is one or two customers, sending multiple bills and marketing offers at high cost in postage and customer satisfaction. All employees who have access to mastered customer information can be confident they have the best possible customer information available across the organization to do their jobs. And with the most advanced and intelligent data platform, all this information can be secured so only the authorized employees, partners, and systems have access.
Q. Which industries stand to gain the most from mastering their data?
A. In every industry there is some transformation going on that’s driving the need to know people, places and things better. Take insurance for example. Similar to the transformation in the travel industry that reduced the need for travel agents, the insurance industry is experiencing a shift from the agent/broker model to a more direct model. Traditional insurance companies now have an urgent need to know their customers so they can better serve them across all channels and across multiple lines of business.
In other industries, there is an urgent need to get a lot better at supply-chain management or to accelerate new product introductions to compete better with an emerging rival. Business leaders are starting to make the connection between transformation failures and a more critical need for the best possible data, particularly in industries undergoing rapid transformation, or with rapidly changing regulatory requirements.
Q. Which business functions seem most interested in mastering their business-critical data?
A. It varies by industry, but there are three common threads that seem to span most industries:
- MDM can help the marketing team optimize the cross-sell and up-sell process with high quality data about customers, their households or company hierarchies, the products and services they have purchased through various channels, and the interactions their organizations have had with these customers.
- MDM can help the procurement team optimize strategic sourcing including supplier spend management and supplier risk management with high quality data about suppliers, company hierarchies, contracts and the products they supply.
- MDM can help the compliance teams manage all the business-critical data they need to create regulatory reports on time without burning the midnight oil.
Q. How is the use of MDM evolving?
A. When MDM technology was first introduced a decade ago, it was used as a filter. It cleaned up business-critical data on its way to the data warehouse so you’d have clean, consistent, and connected information (“conformed dimensions”) for reporting. Now business leaders are investing in MDM technology to ensure that all of their global employees have access to high quality business-critical data across all applications. They believe high quality data is mission-critical to their operations. High quality data is viewed as the the lifeblood of the company and will enable the next frontier of innovation.
Second, many companies mastered data in only one or two domains (customer and product), and used separate MDM systems for each. One system was dedicated to mastering customer data. You may recall the term Customer Data Integration (CDI). Another system was dedicated to mastering product data. Because the two systems were in silos and business-critical data about customers and products wasn’t connected, they delivered limited business value. Since that time, business leaders have questioned this approach because business problems don’t contain themselves to one type of data, such as customer or product, and many of the benefits of mastering data come from mastering other domains including supplier, chart of accounts, employee and other master or reference data shared across systems.
The relationships between data matter to the business. Knowing what customer bought from which store or site is more valuable than just knowing your customer. The business insights you can gain from these relationships is limitless. Over 90% of our customers last year bought MDM because they wanted to master multiple types of data. Our customers value having all types of business-critical data in one system to deliver clean, consistent and connected data to their applications to fuel business success.
One last evolution we’re seeing a lot involves the types and numbers of systems connecting to the master data management system. In the past, there were a small number of operational systems pushing data through the MDM system into a data warehouse used for analytical purposes. Today, we have customers with hundreds of operational systems communicating with each other via an MDM system that has just a few milliseconds to respond, and which must maintain the highest levels of availability and reliability of any system in the enterprise. For example, one major retailer manages all customer information in the MDM system, using the master data to drive real-time recommendations as well as a level of customer service in every interaction that remains the envy of their industry.
Q. Dennis, why should business leaders consider attending MDM Day?
A. Business leaders should consider attending MDM Day at InformaticaWorld 2014 on Monday, May 12, 2014. You can hear first-hand the business value companies are gaining by using clean, consistent and connected information in their operations. We’re excited to have fantastic customers who are willing to share their stories and lessons learned. We have presenters from St. Jude Medical, Citrix, Quintiles and Crestline Geiger and panelists from Thomson Reuters, Accenture, EMC, Jones Lang Lasalle, Wipro, Deloitte, AutoTrader Group, McAfee-Intel, Abbvie, Infoverity, Capgemini, and Informatica among others.
Last year’s Las Vegas event, and the events we held in London, New York and Sao Paolo were extremely well received. This year’s event is packed with even more customer sessions and opportunities to learn and to influence our product road map. MDM Day is one day before InformaticaWorld and is included in the cost of your InformaticaWorld registration. We’d love to see you there!
See the MDM Day Agenda.
A few years back, there was a movement in some businesses to establish “data stewards” – individuals who would sit at the hearts of the enterprise and make it their job to assure that data being consumed by the organization is of the highest possible quality, is secure, is contextually relevant, and capable of interoperating across any applications that need to consume it. While the data steward concept came along when everything was relational and structured, these individuals are now earning their pay when it comes to managing the big data boom.
The rise of big data is creating more than simple headaches for data stewards, it is creating turf wars across enterprises. As pointed out in a recent article in The Wall Street Journal, there isn’t yet a lot of clarity as to who owns and cares for such data. Is it IT? Is it lines of business? Is it legal? There are arguments that can be made for all jurisdictions.
In organizations these days, for example, marketing executives are generating, storing and analyzing large volumes of their own data within content management systems and social media analysis solutions. Many marketing departments even have their own IT budgets. Along with marketing, of course, everyone else within enterprises is seeking to pursue data analytics to better run their operations as well as foresee trends.
Typically, data has been under the domain of the CIO, the person who oversaw the collection, management and storage of information. In the Wall Street Journal article, however, it’s suggested that legal departments may be the best caretakers of big data, since big data poses a “liability exposure,” and legal departments are “better positioned to understand how to use big data without violating vendor contracts and joint-venture agreements, as well as keeping trade secrets.”
However, legal being legal, it’s likely that insightful data may end up getting locked away, never to see the light of day. Others may argue IT department needs to retain control, but there again, IT isn’t trained to recognize information that may set the business on a new course.
Focusing on big data ownership isn’t just an academic exercise. The future of the business may depend on the ability to get on top of big data. Gartner, for one, predicts that within the next three years, at least of a third of Fortune 100 organizations will experience an information crisis, “due to their inability to effectively value, govern and trust their enterprise information.”
This ability to “value, govern and trust” goes way beyond the traditional maintenance of data assets that IT has specialized in over the past few decades. As Gartner’s Andrew White put it: “Business leaders need to manage information, rather than just maintain it. When we say ‘manage,’ we mean ‘manage information for business advantage,’ as opposed to just maintaining data and its physical or virtual storage needs. In a digital economy, information is becoming the competitive asset to drive business advantage, and it is the critical connection that links the value chain of organizations.”
For starters, then, it is important that the business have full say over what data needs to be brought in, what data is important for further analysis, and what should be done with data once it gains in maturity. IT, however, needs to take a leadership role in assuring the data meets the organization’s quality standards, and that it is well-vetted so that business decision-makers can be confident in the data they are using.
The bottom line is that big data is a team effort, involving the whole enterprise. IT has a role to play, as does legal, as do the line of business.
Analyzing current business trends helps illustrate how difficult and complex the Communication Service Provider business environment has become. CSPs face many challenges. Clients expect high quality, affordable content that can move between devices with minimum advertising or privacy concerns. To illustrate this phenomenon, here are a few recent examples:
- Apple is working with Comcast/NBC Universal on a new converged offering
- Vodafone purchased the Spanish cable operator, Ono, having to quickly separate the wireless customers from the cable ones and cross-sell existing products
- Net neutrality has been scuttled in the US and upheld in the EU so now a US CSP can give preferential bandwidth to content providers, generating higher margins
- Microsoft’s Xbox community collects terabytes of data every day making effective use, storage and disposal based on local data retention regulation a challenge
- Expensive 4G LTE infrastructure investment by operators such as Reliance is bringing streaming content to tens of millions of new consumers
To quickly capitalize on “new” (often old, but unknown) data sources, there has to be a common understanding of:
- Where the data is
- What state it is in
- What it means
- What volume and attributes are required to accommodate a one-off project vs. a recurring one
When a multitude of departments request data for analytical projects with their one-off, IT-unsanctioned on-premise or cloud applications, how will you go about it? The average European operator has between 400 and 1,500 (known) applications. Imagine what the unknown count is.
A European operator with 20-30 million subscribers incurs an average of $3 million per month due to unpaid invoices. This often results from incorrect or incomplete contact information. Imagine how much you would have to add for lost productivity efforts, including gathering, re-formatting, enriching, checking and sending invoices. And this does not even account for late invoice payments or extended incorrect credit terms.
Think about all the wrong long-term conclusions that are being drawn from this wrong data. This single data problem creates indirect cost in excess of three times the initial, direct impact of unpaid invoices.
Want to fix your data and overcome the accelerating cost of change? Involve your marketing, CEM, strategy, finance and sales leaders to help them understand data’s impact on the bottom line.
Disclaimer: Recommendations and illustrations contained in this post are estimates only and are based entirely upon information provided by the prospective customer and on our observations and benchmarks. While we believe our recommendations and estimates to be sound, the degree of success achieved by the prospective customer is dependent upon a variety of factors, many of which are not under Informatica’s control and nothing in this post shall be relied upon as representative of the degree of success that may, in fact, be realized and no warranty or representation of success, either express or implied, is made.
This year, over one dozen healthcare leaders will share their knowledge on data driven insights at Informatica World 2014. These will be included in six tracks and over 100 breakout sessions during the conference. We are only five weeks away and I am excited that the healthcare path has grown 220% from 2013!
Join us for these healthcare sessions:
- Moving From Vision to Reality at UPMC : Structuring a Data Integration and Analytics Program: University of Pittsburgh Medical Center (UPMC) partnered with Informatica IPS to establish enterprise analytics as a core organizational competency through an Integration Competency Center engagement. Join IPS and UPMC to learn more.
- HIPAA Validation for Eligibility and Claims Status in Real Time: Healthcare reform requires healthcare payers to exchange and process HIPAA messages in less time with greater accuracy. Learn how HealthNet tackled this challenge.
- Application Retirement for Healthcare ROI : Dallas Children’s Hospital needed to retire outdated operating systems, hardware, and applications while retaining access to their legacy data for compliance purposes. Learn why application retirement is critical to the healthcare industry, how Dallas Children’s selected which applications to retire and the healthcare specific functionality that Informatica is delivering.
- UPMC’s story of implementing a Multi-Domain MDM healthcare solution in support of Data Governance : This presentation will unfold the UPMC story of implementing a Multi-Domain MDM healthcare solution as part of an overall enterprise analytics / data warehousing effort. MDM is a vital part of the overall architecture needed to support UPMC’s efforts to improve the quality of patient care and help create methods for personalized medicine. Today, the leading MDM solution developer will discuss how the team put together the roadmap, worked with domain specific workgroups, created the trust matrix and share his lessons learned. He will also share what they have planned for their consolidated and trusted Patient, Provider and Facility master data in this changing healthcare industry. This will also explain how the MDM program fits into the ICC (Integration Competency Center) currently implemented at UPMC.
- Enterprise Codeset Repositories for Healthcare: Controlling the Chaos: Learn the benefit of a centralized storage point to govern and manage codes (ICD-9/10, CPT, HCPCS, DRG, SNOMED, Revenue, TOS, POS, Service Category, etc.), mappings and artifacts that reference codes.
- Christus Health Roadmap to Data Driven Healthcare : To organize information and effectively deliver services in a hypercompetitive market, healthcare organizations must deliver data in an accurate, timely, efficient way while ensuring its clarity. Learn how CHRISTUS Health is developing and pursuing its vision for data management, including lessons adopted from other industries and the business case used to fund data management as a strategic initiative.
- Business Value of Data Quality : This customer panel will address why data quality is a business imperative which significantly affects business success.
- MD Anderson – Foster Business and IT Collaboration to Reveal Data Insights with Informatica: Is your integration team intimidated by the new Informatica 9.6 tools? Do your analysts and business users require faster access to data and answers about where data comes from. If so, this session is a must attend.
- The Many Faces of the Healthcare Customer : In the healthcare industry, the customer paying for services (individuals, insurers, employers, the government) is not necessarily the decision-influencer (physicians) or even the patient — and the provider comes in just as many varieties. Learn how, Quest, the world’s leading provider of diagnostic information leverages master data management to resolve the chaos of serving 130M+ patients, 1200+ payers, and almost half of all US physicians and hospitals.
- Lessons in Healthcare Enterprise Information Management from St. Joseph Health and Sutter Health St. Joseph : Health created a business case for enterprise information management, then built a future-proofed strategy and architecture to unlock, share, and use data. Sutter Health engaged the business, established a governance structure, and freed data from silos for better organizational performance and efficiency. Come hear these leading health systems share their best practices and lessons learned in making data-driven care a reality.
- Navinet, Inc and Informatica – Delivering Network Intelligence, The Value to the Payer, Provider and Patient: Today, healthcare payers and providers must share information in unprecedented ways to reduce redundancy, cut costs, coordinate care, and drive positive outcomes. Learn how NaviNet’s vision of a “smart” communications network combines Big Data and network intelligence to share proactive real-time information between insurers and providers.
- Providence Health Services takes a progressive approach to automating ETL development and documentation: A newly organized team of BI Generalists, most of whom have no ETL experience and even fewer with Informatica skills, were tasked with Informatica development when Providence migrated from Microsoft SSIS to Informatica. Learn how the team relied on Informatica to alleviate the burden of low value tasks.
- Using IDE for Data On-boarding Framework at HMS : HMS’s core business is to onboard large amounts of external data that arrive in different formats. HMS developed a framework using IDE to standardize the on-boarding process. This tool can be used by non-IT analysts and provides standard profiling reports and reusable mapping “templates” which has improved the hand-off to IT and significantly reduced misinterpretations and errors.
Additionally, this year’s attendees are invited to:
- Over 100 breakout sessions: Customers from other industries, including financial services, insurance, retail, manufacturing, oil and gas will share their data driven stories.
- Healthcare networking reception on Wednesday, May 14th: Join your healthcare peers and Informatica’s healthcare team on Wednesday from 6-7:30pm in the Vesper bar of the Cosmopolitan Resort for a private Healthcare networking reception. Come and hear firsthand how others are achieving a competitive advantage by maximizing return on data while enjoying hors d’oeuvres and cocktails.
- Data Driven Healthcare Roundtable Breakfast on Wednesday, May 14th. Customer led roundtable discussion.
- Personal meetings: Since most of the Informatica team will be in attendance, this is a great opportunity to meet face to face with Informatica’s product, services and solution teams.
- Informatica Pavilion and Partner Expo: Interact with the latest Informatica and our partners provide.
- An expanded “Hands-on-Lab”: Learn from real-life case studies and talk to experts about your unique environment.
The Healthcare industry is facing extraordinary changes and uncertainty — both from a business and a technology perspective. Join us to learn about key drivers for change and innovative uses of data technology solutions to discover sources for operational and process improvement. There is still time to Register now!
The Surprising Link Between Hurricanes and Strawberry Pop-Tarts: Brought to you by Clean, Consistent and Connected Data
What do you think Wal-Mart’s best-seller is right before a hurricane? If you guessed water like I did, you’d be wrong. According to this New York Times article, “What Wal-Mart Knows About Customers’ Habits” the retailer sells 7X more strawberry Pop-Tarts in Florida right before a hurricane than any other time. Armed with predictive analytics and a solid information management foundation, the team stocks up on strawberry Pop-Tarts to make sure they have enough supply to meet demand.
I learned this fun fact from Andrew Donaher, Director of Information Management Strategy at Groundswell Group, a consulting firm based in western Canada that specializes in information management services. In this interview, Andy and I discuss how IT leaders can increase the value of data to drive business value, explain how some IT leaders are collaborating with business leaders to improve predictive analytics, and share advice about how to talk to business leaders, such as the CFO about investing in an information management strategy.
Q. Andy, what can IT leaders do to increase the value of data to drive business value?
A. Simply put, each business leader in a company needs to focus on achieving their goals. The first step IT leaders should take is to engage with each business leader to understand their long and short-term goals and ask some key questions, such as:
- What type of information is critical to achieving their goals?
- Do they have the information they need to make the next decision or take the next best action?
- Is all the data they need in house? If not, where is it?
- What challenges are they facing when it comes to their data?
- How much time are people spending trying to pull together the information they need?
- How much time are people spending fixing bad data?
- How much is this costing them?
- What opportunities exist if they had all the information they need and could trust it?
Q. How are IT leaders collaborating with business partners to improve predictive analytics?
A. Wal-Mart’s IT team collaborated with the business to improve the forecasting and demand planning process. Once they found out what was important, IT figured out how to gather, store and seamlessly integrate external data like historical weather and future weather forecasts into the process. This enabled the business to get more valuable insights, tailor product selections at particular stores, and generate more revenue.
Q. Why is it difficult for IT leaders to convince business leaders to invest in an information management strategy?
A. In most cases, business leaders don’t see the value in an information management strategy or they haven’t seen value before. Unfortunately this often happens because IT isn’t able to connect the dots between the information management strategy and the outcomes that matter to the business.
Business leaders see value in having control over their business-critical information, being able to access it quickly and to allocate their resources to get any additional information they need. Relinquishing control takes a lot of trust. When IT leaders want to get buy-in from business leaders to invest in an information management strategy they need to be clear about how it will impact business priorities. Data integration, data quality and master data management (MDM) should be built into the budget for predictive or advanced analytics initiatives to ensure the data the business is relying on is clean, consistent and connected.
Q: You liked this quotation from an IT leader at a beer manufacturing company, “We don’t just make beer. We make beer and data. We need to manage our product supply chain and information supply chain equally efficiently.”
A.What I like about that quote is the IT leader was able to connect the dots between the primary revenue generator for the company and the role data plays in improving organizational performance. That’s something that a lot of IT leaders struggle with. IT leaders should always be thinking about what’s the next thing they can do to increase business value with the data they have in house and other data that the company may not yet be tapping into.
Q. According to a recent survey by Gartner and the Financial Executives Research Foundation, 60% of Chief Financial Officers (CFOs) are investing in analytics and improved decision-making as their #1 IT priority. What’s your advice for IT Leaders who need to get buy-in from the CFO to invest in information management?
A. Read your company’s financial statements, especially the Management Discussion and Analysis section. You’ll learn about the company’s direction, what the stakeholders are looking for, and what the CFO needs to deliver. Offer to get your CFO the information s/he needs to make decisions and to deliver. When you talk to a CFO about investing in information management, focus on the two things that matter most:
- Risk mitigation: CFOs know that bad decisions based on bad information can negatively impact revenue, expenses and market value. If you have to caveat all your decisions because you can’t trust the information, or it isn’t current, then you have problems. CFOs need to trust their information. They need to feel confident they can use it to make important financial decisions and deliver accurate reports for compliance.
- Opportunity: Once you have mitigated the risk and can trust the data, you can take advantage of predictive analytics. Wal-Mart doesn’t just do forecasting and demand planning. They do “demand shaping.” They use accurate, consistent and connected data to plan events and promotions not just to drive inventory turns, but to optimize inventory and the supply chain process. Some companies in the energy market are using accurate, consistent and connected data for predictive asset maintenance. By preventing unplanned maintenance they are saving millions of dollars, protecting revenue streams, and gaining health and safety benefits.
To do either of these things you need a solid information management plan to manage clean, consistent and connected information. It takes a commitment but the pays offs can be very significant.
Q. What are the top three business requirements when building an information management and integration strategy?
A: In my experience, IT leaders should focus on:
- Business value: A solid information management and integration strategy that has a chance of getting funded must be focused on delivering business value. Otherwise, your strategy will lack clarity and won’t drive priorities. If you focus on business value, it will be much easier to gain organizational buy-in. Get that dollar figure before you start anything. Whether it is risk mitigation, time savings, revenue generation or cost savings, you need to calculate that value to the business and get their buy-in.
- Trust: When people know they can trust the information they are getting it liberates them to explore new ideas and not have to worry about issues in the data itself.
- Flexibility: Flexibility should be banked right into the strategy. Business drivers will evolve and change. You must be able to adapt to change. One of the most neglected, and I would argue most important, parts of a solid strategy is the ability to make continuous small improvements that may require more effort than a typical maintenance event, but don’t create long delays. This will be very much appreciated by the business. We work with our clients to ensure that this is addressed.
If you build an IT Architecture, it will be a constant up-hill battle to get business users and executives engaged and take ownership of data governance and data quality. In short you will struggle to maximize the information potential in your enterprise. But if you develop and Enterprise Architecture that starts with a business and operational view, the dynamics change dramatically. To make this point, let’s take a look at a case study from Cisco. (more…)
In a previous blog post, I wrote about when business “history” is reported via Business Intelligence (BI) systems, it’s usually too late to make a real difference. In this post, I’m going to talk about how business history becomes much more useful when combined operationally and in real time.
E. P. Thompson, a historian pointed out that all history is the history of unintended consequences. His idea / theory was that history is not always recorded in documents, but instead is ultimately derived from examining cultural meanings as well as the structures of society through hermeneutics (interpretation of texts) semiotics and in many forms and signs of the times, and concludes that history is created by people’s subjectivity and therefore is ultimately represented as they REALLY live.
The same can be extrapolated for businesses. However, the BI systems of today only capture a miniscule piece of the larger pie of knowledge representation that may be gained from things like meetings, videos, sales calls, anecdotal win / loss reports, shadow IT projects, 10Ks and Qs, even company blog posts – the point is; how can you better capture the essence of meaning and perhaps importance out of the everyday non-database events taking place in your company and its activities – in other words, how it REALLY operates.
One of the keys to figuring out how businesses really operate is identifying and utilizing those undocumented RULES that are usually underlying every business. Select company employees, often veterans, know these rules intuitively. If you watch them, and every company has them, they just have a knack for getting projects pushed through the system, or making customers happy, or diagnosing a problem in a short time and with little fanfare. They just know how things work and what needs to be done.
These rules have been, and still are difficult to quantify and apply or “Data-ify” if you will. Certain companies (and hopefully Informatica) will end up being major players in the race to datify these non-traditional rules and events, in addition to helping companies make sense out of big data in a whole new way. But in daydreaming about it, it’s not hard to imagine business systems that will eventually be able to understand the optimization rules of a business, accounting for possible unintended scenarios or consequences, and then apply them in the time when they are most needed. Anyhow, that’s the goal of a new generation of Operational Intelligence systems.
In my final post on the subject, I’ll explain how it works and business problems it solves (in a nutshell). And if I’ve managed to pique your curiosity and you want to hear about Operational Intelligence sooner, tune in to to a webinar we’re having TODAY at 10 AM PST. Here’s the link.