Category Archives: CIO

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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Do We Really Need Another Information Framework?

Do We Really Need Another Information Framework?

The EIM Consortium is a group of nine companies that formed this year with the mission to:

Promote the adoption of Enterprise Information Management as a business function by establishing an open industry reference architecture in order to protect and optimize the business value derived from data assets.”

That sounds nice, but we do really need another framework for EIM or Data Governance? Yes we do, and here’s why. (more…)

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Posted in CIO, Data Governance, Data Integration, Enterprise Data Management, Governance, Risk and Compliance, Integration Competency Centers, Uncategorized | Tagged , , | Leave a comment

CFO Move to Chief Profitability Officer

30% or higher of each company’s businesses are unprofitable

cfoAccording to Jonathan Brynes at the MIT Sloan School, “the most important issue facing most managers …is making more money from their existing businesses without costly new initiatives”. In Brynes’ cross industry research, he found that 30% or higher of each company’s businesses are unprofitable. Brynes claims these business losses are offset by what are “islands of high profitability”. The root cause of this issue is asserted to be the inability of current financial and management control systems to surface profitability problems and opportunities. Why is this the case? Byrnes believes that management budgetary guidance by its very nature assumes the continuation of the status quo. For this reason, the response to management asking for a revenue increase is to increase revenues for businesses that are profitable and unprofitable. Given this, “the areas of embedded unprofitability remain embedded and largely invisible”. At the same time to be completely fair, it should be recognized that it takes significant labor to accurately and completely put together a complete picture on direct and indirect costs.

The CFO needs to become the point person on profitability issues

cfo

Byrnes believes, nevertheless, that CFOs need to become the corporate point person for surfacing profitability issues. They, in fact, should act as the leader of a new and important role, the chief profitability officer. This may seem like an odd suggestion since virtually every CFO if asked would view profitability as a core element of their job. But Byrnes believes that CFOs need to move beyond broad, departmental performance measures and build profitability management processes into their companies’ core management activities. This task requires the CFO to determine two things.

  1. Which product lines, customers, segments, and channels are unprofitable so investments can be reduced or even eliminated?
  2. Which product lines, customers, segments, and channels are the most profitable so management can determine whether to expand investments and supporting operations?

Why didn’t portfolio management solve this problem?

cfoNow as a strategy MBA, Byrnes’ suggestion leave me wondering why the analysis proposed by strategy consultants like Boston Consulting Group didn’t solve this problem a long time ago. After all portfolio analysis has at its core the notion that relative market share and growth rate will determine profitability and which businesses a firm should build share, hold share, harvest share, or divest share—i.e. reduce, eliminate, or expand investment. The truth is getting at these figures, especially profitability, is a time consuming effort.

KPMG finds 91% of CFOs are held back by financial and performance systems

KPMG

As financial and business systems have become more complex, it has become harder and harder to holistically analyze customer and product profitability because the relevant data is spread over a myriad of systems, technologies, and locations. For this reason, 91% of CFO respondents in a recent KPMG survey said that they want to improve the quality of their financial and performance insight from the data they produce. An amazing 51% of these CFOs, also, admitted that the “collection, storage, and retrieval financial and performance data at their company is primarily a manual and/or spreadsheet-based exercise”. Think about it — a majority of these CFOs teams time is spent collecting financial data rather than actively managing corporate profitability.

How do we fix things?

FixWhat is needed is a solution that allows financial teams to proactively produce trustworthy financial data from each and every financial system and then reliably combine and aggregate the data coming from multiple financial systems. Having accomplished this, the solution needs to allow financial organizations to slice and dice net profitability for product lines and customers.

This approach would not only allow financial organizations to cut their financial operational costs but more importantly drive better business profitability by surfacing profitability gaps. At the same time, it would enable financial organizations to assist business units in making more informed customer and product line investment decisions. If a product line or business is narrowly profitable and lacks a broader strategic context or ability to increase profitability by growing market share, it is a candidate for investment reduction or elimination.

Strategic CFOs need to start asking questions of their business counterparts starting with their justification for their investment strategy. Key to doing this involves consolidating reliable profitability data across customers, products, channel partners, suppliers. This would eliminate the time spent searching for and manually reconciling data in different formats across multiple systems. It should deliver ready analysis across locations, applications, channels, and departments.

Some parting thoughts

Strategic CFOs tell us they are trying to seize the opportunity “to be a business person versus a bean counting historically oriented CPA”. I believe a key element of this is seizing the opportunity to become the firm’s chief profitability officer. To do this well, CFOs need dependable data that can be sliced and diced by business dimensions. Armed with this information, CFOs can determine the most and least profitability, businesses, product lines, and customers. As well, they can come to the business table with the perspective to help guide their company’s success.

Related links
Solution Brief: The Intelligent Data Platform
Related Blogs
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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CFOs Discuss Their Technology Priorities

Recently, I had the opportunity to talk to a number of CFOs about their technology priorities. These discussions represent an opportunity for CIOs to hear what their most critical stakeholder considers important. The CFOs did not hesitate or need to think much about this question. They said three things make their priority list. They are better financial system reliability, better application integration, and better data security and governance. The top two match well with a recent KPMG study which found the biggest improvement finance executives want to see—cited by 91% of survey respondents—is in the quality of financial and performance insight obtained from the data they produce, followed closely by the finance and accounting organization’s ability to proactively analyze that information before it is stale or out of date”

TrustBetter financial system reliability

CFOs want to know that their systems work and are reliable. They want the data collected from their systems to be analyzed in a timely fashion. Importantly, CFOs say they are worried not only about the timeliness of accounting and financial data. This is because they increasingly need to manage upward with information.  For this reason, they want timely, accurate information produced for financial and business decision makers. Their goal is to drive out better enterprise decision making.

In manufacturing, for example, CFOs say they want data to span from the manufacturing systems to the distribution system. They want to be able to push a button and get a report. These CFOs complain today about the need to manually massage and integrate data from system after system before they get what they and their business decision makers want and need.

IntegrationBetter Application Integration

CFOs really feel the pain of systems not talking to each other. CFOs know firsthand that they have “disparate systems” and that too much manual integration is going on. For them, they see firsthand the difficulties in connecting data from the frontend to backend systems. They personally feel the large number of manual steps required to pull data. They want their consolidation of account information to be less manual and to be more timely. One CFO said that “he wants the integration of the right systems to provide the right information to be done so they have the right information to manage and make decisions at the right time”.

Data Security and Governance

securityCFOs, at the same time, say they have become more worried about data security and governance. Even though CFOs believe that security is the job of the CIO and their CISO, they have an important role to play in data governance. CFOs say they are really worried about getting hacked. One CFO told me that he needs to know that systems are always working properly. Security of data matters today to CFOs for two reasons. First, data has a clear material impact. Just take a look at the out of pocket and revenue losses coming from the breach at Target. Second, CFOs, which were already being audited for technology and system compliance, feel that their audit firms will be obligated to extend what they were doing in security and governance and go as a part of regular compliance audits. One CFO put it this way. “This is a whole new direction for us. Target scared a lot of folks and will be to many respects a watershed event for CFOs”.

Take aways

So the message here is that CFOs prioritize three technology objectives for their CIOs– better IT reliability, better application integration, and improved data security and governance. Each of these represents an opportunity to make the CFOs life easier but more important to enable them to take on a more strategic role. The CFOs, that we talked to, want to become one of the top three decision makers in the enterprise. Fixing these things for CFOs will enable CIOs to build a closer CFO and business relationships.

Related links

Solution Brief: The Intelligent Data Platform

Solution Brief: Secure at Source

Related Blogs

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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Building a Data Foundation for Execution

Building a Data Foundation for Execution

Building a Data Foundation

I have been re-reading Enterprise Architecture as Strategy from the MIT Center for Information Systems Research (CISR).*  One concept that they talk about that jumped out at me was the idea of a “Foundation for Execution.”  Everybody is working to drive new business initiatives, to digitize their businesses, and to thrive in an era of increased technology disruption and competition.  The ideas around a Foundation for Execution in the book are a highly practical and useful framework to deal with these problems.

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.

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What’s In A Name?

Naming ConventionsSometimes, the choice of a name has unexpected consequences. Often these consequences aren’t fair. But they exist, nonetheless. For an example of this, consider the well-known study by the National Bureau of Economic Research study that compares the hiring prospects of candidates with identical resumes, but different names. During the study, titled a “Field Experiment on Labor Market Discrimination,” employers were found to be more likely to reply candidates with popular, traditionally Caucasian names than to candidates with either unique, eclectic names or with traditionally African-American names. Though these biases are clearly unfair to the candidates, they do illustrate a key point: One’s choice when naming something can come with perceptions that influence outcomes.

For an example from the IT world, consider my recent engagement at a regional retail bank. In this engagement, half of the meeting time was consumed by IT and business leaders debating how to label their Master Data Management (MDM) Initiative.  Consider these excerpts:

  • Should we even call it MDM? Answer: No. Why? Because nobody on the business side will understand what that means. Also, as we just implemented a Data Warehouse/Mart last year and we are in the middle of our new CRM roll-out, everybody in business and retail banking will assume their data is already mastered in both of these.  On a side note; telcos understand MDM as Mobile Device Management.
  • Should we call it “Enterprise Data Master’? Answer: No. Why? Because unless you roll out all data domains and all functionality (standardization, matching, governance, hierarchy management, etc.) to the whole enterprise, you cannot.  And doing so is a bad idea as it is with every IT project.  Boiling the ocean and going live with a big bang is high cost, high risk and given shifting organizational strategies and leadership, quick successes are needed to sustain the momentum.
  • Should we call it “Data Warehouse – Release 2”? Answer: No. Why? Because it is neither a data warehouse, nor a version 2 of one.  It is a backbone component required to manage a key organizational ingredient – data –in a way that it becomes useful to many use cases, processes, applications and people, not just analytics, although it is often the starting block.  Data warehouses have neither been conceived nor designed to facilitate data quality (they assume it is there already) nor are they designed for real time interactions.  Did anybody ask if ETL is “Pneumatic Tubes – Version 2”?
  • Should we call it “CRM Plus”? Answer: No. Why? Because it has never intended or designed to handle the transactional volume and attribution breadth of high volume use cases, which are driven by complex business processes. Also, if it were a CRM system, it would have a more intricate UI capability beyond comparatively simple data governance workflows and UIs.

Consider this; any data quality solution like MDM, makes any existing workflow or application better at what it does best: manage customer interactions, create orders, generate correct invoices, etc.  To quote a colleague “we are the BASF of software”.  Few people understand what a chemical looks like or does but it makes a plastic container sturdy, transparent, flexible and light.

I also explained hierarchy management in a similar way. Consider it the LinkedIn network of your company, which you can attach every interaction and transaction to.  I can see one view, people in my network see a different one and LinkedIn has probably the most comprehensive view but we are all looking at the same core data and structures ultimately.

So let’s call the “use” of your MDM “Mr. Clean”, aka Meister Proper, because it keeps everything clean.

While naming is definitely a critical point to consider given the expectations, fears and reservations that come with MDM and the underlying change management, it was hilarious to see how important it suddenly was.  However, it was puzzling to me (maybe a naïve perspective) why mostly recent IT hires had to categorize everything into new, unique functional boxes, while business and legacy IT people wanted to re-purpose existing boxes.  I guess, recent IT used their approach to showcase that they were familiar with new technologies and techniques, which was likely a reason for their employment.  Business leaders, often with the exception of highly accomplished and well regarded ones, as well as legacy IT leaders, needed to reassure continuity and no threat of disruption or change.  Moreover, they also needed to justify their prior software investments’ value proposition.

Aside from company financial performance and regulatory screw-ups, legions of careers will be decide if, how and how successful this initiative will be.

Naming a new car model for a 100,000 production run or a shampoo for worldwide sales could not face much more scrutiny.  Software vendors give their future releases internal names of cities like Atlanta or famous people like Socrates instead of descriptive terms like “Gamification User Interface Release” or “Unstructured Content Miner”. This may be a good avenue for banks and retailers to explore.  It would avoid the expectation pitfalls associated with names like “Customer Success Data Mart”, “Enterprise Data Factory”, “Data Aggregator” or “Central Property Repository”.  In reality, there will be many applications, which can claim bits and pieces of the same data, data volume or functionality.  Who will make the call on which one will be renamed or replaced to explain to the various consumers what happened to it and why.

You can surely name any customer facing app something more descriptive like “Payment Central” or “Customer Success Point” but the reason why you can do this is that the user will only have one or maybe two points to interface with the organization. Internal data consumers will interact many more repositories.  Similarly, I guess this is all the reason why I call my kids by their first name and strangers label them by their full name, “Junior”, “Butter Fingers” or “The Fast Runner”.

I would love to hear some other good reasons why naming conventions should be more scrutinized.  Maybe you have some guidance on what should and should not be done and the reasons for it?

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Competing on Analytics: A Follow Up to Thomas H. Davenport’s Post in HBR

CompetitionIf you ask a CIO today about the importance of data to their enterprises, they will likely tell you about the need to “compete on analytics” and to enable faster business decisions. At the same time, CIOs believe they “need to provide the intelligence to make better business decisions”. One CIO said it was in fact their personal goal to get the business to a new place faster, to enable them to derive new business insights, and to get to the gold at the end of the rainbow”.

Similarly, another CIO said that Big Data and Analytics were her highest priorities. “We have so much knowledge locked up in the data, it is just huge. We need the data cleaning and analytics to pull this knowledge out of data”. At the same time the CIOs that we talked to see their organizations as “entering an era of ubiquitous computing where users want all data on any device when they need it.”

Why does faster, better data really matters to the enterprise?

DavenportSo why does it matter? Thomas H. Davenport says, “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.” A CIO that we have talked to concurred in saying, “today, we need to move from “management by exception to management by observation”. Derick Abell amplified upon this idea when he said in his book Managing with Dual Strategies “for control to be effective, data must be timely and provided at intervals that allow effective intervention”.

Davenport explains why timely data matters in this way “analytics competitors wring every last drop of value from those processes”. Given this, “they know what products their customers want, but they also know what prices those customers will pay, how many items each will buy in a lifetime, and what triggers will make people buy more. Like other companies, they know compensation costs and turnover rates, but they can also calculate how much personnel contribute to or detract from the bottom line and how salary levels relate to individuals’ performance. Like other companies, they know when inventories are running low, but they can also predict problems with demand and supply chains, to achieve low rates of inventory and high rates of perfect orders”.

What then prevents businesses from competing on analytics?

FixMoving to what Davenport imagines requires not just a visualizing tool. It involves fixing what is allying IT’s systems. One CIO suggested this process can be thought of like an athlete building the muscles they need to compete. He said that businesses really need the same thing. In his eyes, data cleaning, data security, data governance, and master data management represent the muscles to compete effectively on analytics. Unless you do these things, you cannot truly compete on analytics. At UMASS Memorial Health, for example, they “had four independent patient registration systems supporting the operations of their health system, with each of these having its own means of identifying patients, assigning medical record numbers, and recording patient care and encounter information”. As a result, “UMass lacked an accurate, reliable, and trustworthy picture of how many unique patients were being treated by its health system. In order to fix things, UMASS needed to “resolve patient, provider and encounter data quality problems across 11 source systems to allow aggregation and analysis of data”. Prior to fixing its data management system, this meant that “UMass lacked a top-down, comprehensive view of clinical and financial performance across its extended healthcare enterprise”.

UMASS demonstrates how IT needs to fix their data management in order to improve their organization’s information intelligence and drive real and substantial business advantage. Fixing data management clearly involves delivering the good data that business users can safely use to make business decisions. It, also, involves ensuring that data created is protected. CFOs that we have talked to say Target was a watershed event for them—something that they expect will receive more and more auditing attention.

Once our data is good and safe, we need to connect current data sources and new data sources. And this needs to not take as long as it did in the past. The delivery of data needs to happen fast enough that business problems can be recognized as they occur and be solved before they become systemic.  For this reason, users need to get access to data when and where they it is needed.

With data management fixed, data intelligence is needed so that business users can make sense out of things faster. Business users need to be able to search and find data. They need self-service so they can combine existing and new unstructured data sources to test data interrelationship hypothesis. This means the ability to assemble data from different sources at different times. Simply put this is all about data orchestration without having any preconceived process. And lastly, they need the intelligence to automatically sense and respond to changes as new data becomes collected.

Some parting thoughts

The next question may be whether competing upon data actual pay business dividends. Alvin Toffler says “Tiny insights can yield huge outputs”. In other words, the payoff can be huge. And those that do so will increasingly have the “right to win” against their competitors as you use information to wring every last drop of value from your business processes.

Related links

Solution Brief: The Intelligent Data Platform

Related Blogs

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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