Category Archives: CIO

Rising DW Architecture Complexity

Rising DW Architecture Complexity

Rising DW Architecture Complexity

I was talking to an architect-customer last week at a company event and he was describing how his enterprise data warehouse architecture was getting much more complex after many years of relative calm and stability.  In the old days of yore, you had some data sources, a data warehouse (with single database), and some related edge systems.

The current trend is that new types of data and new types of physical storage are changing all of that.

When I got back from my trip I found a TDWI white paper by Philip Russom that describes the situation very well in a white paper detailing his research on this subject;  Evolving Data Warehouse Architectures in the Age of Big Data.

From an enterprise data architecture and management point of view, this is a very interesting paper.

  • First the DW architectures are getting complex because of all the new physical storage options available
    • Hadoop – very large scale and inexpensive
    • NoSQL DBMS – beyond tabular data
    • Columnar DBMS – very fast seek time
    • DW Appliances – very fast / very expensive
  • What is driving these changes is the rapidly-increasing complexity of data. Data volume has captured the imagination of the press, but it is really the rising complexity of the data types that is going to challenge architects.
  • But, here is what really jumped out at me. When they asked the people in their survey what are the important components of their data warehouse architecture, the answer came back; Standards and rules.  Specifically, they meant how data is modeled, how data quality metrics are created, metadata requirements, interfaces for data integration, etc.

The conclusion for me, from this part of the survey, was that business strategy is requiring more complex data for better analyses (example: realtime response or proactive recommendations) and business processes (example: advanced customer service).  This, in turn, is driving IT to look into more advanced technology to deal with different data types and different use cases for the data.  And finally, the way they are dealing with the exploding complexity was through standards, particularly data standards.  If you are dealing with increasing complexity and have to do it better, faster and cheaper, they only way you are going to survive is by standardizing as much as reasonably makes sense.  But, not a bit more.

If you think about it, it is good advice.  Get your data standards in place first.  It is the best way to manage the data and technology complexity.  …And a chance to be the driver rather than the driven.

I highly recommend reading this white paper.  There is far more in it than I can cover here. There is also a Philip Russom webinar on DW Architecture that I recommend.

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Is it the CDO or CAO or Someone Else?

Frank-Friedman-199x300A month ago, I shared that Frank Friedman believes CFOs are “the logical choice to own analytics and put them to work to serve the organization’s needs”. Even though many CFOs are increasingly taking on what could be considered an internal CEO or COO role, many readers protested my post which focused on reviewing Frank Friedman’s argument. At the same time, CIOs have been very clear with me that they do not want to personally become their company’s data steward. So the question becomes should companies be creating a CDO or CAO role to lead this important function? And if yes, how common are these two roles anyway?

Data analyticsRegardless of eventual ownership, extracting value out of data is becoming a critical business capability. It is clear that data scientists should not be shoe horned into the traditional business analyst role. Data Scientists have the unique ability to derive mathematical models “for the extraction of knowledge from data “(Data Science for Business, Foster Provost, 2013, pg 2). For this reason, Thomas Davenport claims that data scientists need to be able to network across an entire business and be able to work at the intersection of business goals, constraints, processes, available data and analytical possibilities. Given this, many organizations today are starting to experiment with the notion of having either a chief data officers (CDOs) or chief analytics officers (CAOs). The open questions is should an enterprise have a CDO or a CAO or both? And as important in the end, it is important to determine where should each of these roles report in the organization?

Data policy versus business questions

Data analyticsIn my opinion, it is the critical to first look into the substance of each role before making a decision with regards to the above question. The CDO should be about ensuring that information is properly secured, stored, transmitted or destroyed.  This includes, according to COBIT 5, that there are effective security and controls over information systems. To do this, procedures need to be defined and implemented to ensure the integrity and consistency of information stored in databases, data warehouses, and data archives. According to COBIT 5, data governance requires the following four elements:

  • Clear information ownership
  • Timely, correct information
  • Clear enterprise architecture and efficiency
  • Compliance and security

Data analyticsTo me, these four elements should be the essence of the CDO role. Having said this, the CAO is related but very different in terms of the nature of the role and the business skills require. The CRISP model points out just how different the two roles are. According to CRISP, the CAO role should be focused upon business understanding, data understanding, data preparation, data modeling, and data evaluation. As such the CAO is focused upon using data to solve business problems while the CDO is about protecting data as a business critical asset. I was living in in Silicon Valley during the “Internet Bust”. I remember seeing very few job descriptions and few job descriptions that existed said that they wanted a developer who could also act as a product manager and do some marketing as a part time activity. This of course made no sense. I feel the same way about the idea of combining the CDO and CAO. One is about compliance and protecting data and the other is about solving business problems with data. Peanut butter and chocolate may work in a Reese’s cup but it will not work here—the orientations are too different.

So which business leader should own the CDO and CAO?

Clearly, having two more C’s in the C-Suite creates a more crowded list of corporate officers. Some have even said that this will extended what is called senior executive bloat. And what of course how do these new roles work with and impact the CIO? The answer depends on organization’s culture, of course. However, where there isn’t an executive staff office, I suggest that these roles go to different places. Clearly, many companies already have their CIO function already reporting to finance. Where this is the case, it is important determine whether a COO function is in place. The COO clearly could own the CDO and CAO functions because they have a significant role in improving process processes and capabilities. Where there isn’t a COO function and the CIO reports to the CEO, I think you could have the CDO report to the CIO even though CIOs say they do not want to be a data steward. This could be a third function in parallel the VP of Ops and VP of Apps. And in this case, I would put the CAO report to one of the following:  the CFO, Strategy, or IT. Again this all depends on current organizational structure and corporate culture. Regardless of where it reports, the important thing is to focus the CAO on an enterprise analytics capability.

Related Blogs

Should we still be calling it Big Data?

Is Big Data Destined To Become Small And Vertical?

Big Data Why?

What is big data and why should your business care?

Author Twitter: @MylesSuer

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Major Oil Company Uses Analytics to Gain Business Advantage

analytics case studies-GasAccording Michelle Fox of CNBC and Stephen Schork, the oil industry is in ‘dire straits’. U.S. crude posted its ninth-straight weekly loss this week, landing under $50 a barrel. The news is bad enough that it is now expected to lead to major job losses. The Dallas Federal Reserve anticipates that the Texas could lose about 125,000 jobs by the end of June. Patrick Jankowski, an economist and vice president of research at the Greater Houston Partnership, expects exploration budgets will be cut 30-35 percent, which will result in approximately 9,000 fewer wells being drilled. The problem is “if oil prices keep falling, at some point it’s not profitable to pull it out of the ground” (“When, and where, oil is too cheap to be profitable”, CNBC, John W. Schoen). job losses 

This means that a portion of the world’s oil supply will become unprofitable to produce. According to Wood Mackenzie, “once the oil price reaches these levels, producers have a sometimes complex decision to continue producing, losing money on every barrel produced, or to halt production, which will reduce supply”. The question are these the only answers?

Major Oil Company Uses Analytics to Gain Business Advantage

analytics case studiesA major oil company that we are working with has determined that data is a success enabler for their business. They are demonstrating what we at Informatica like to call a “data ready business”—a business that is ready for any change in market conditions. This company is using next generation analytics to ensure their businesses survival and to make sure they do not become what Jim Cramer likes to call a “marginal producer”.  This company has said to us that their success is based upon being able to extract oil more efficiently than its competitors.

Historically data analysis was pretty simple

analytics case studies-oil drillingTraditionally oil producers would get oil by drilling a new hole in the ground.  And in 6 months they would start getting the oil flowing commercially and be in business. This meant it would typically take them 6 months or longer before they could get any meaningful results including data that could be used to make broader production decisions.

Drilling from data

Today, oil is, also, produced from shale or fracking techniques.  This process can take only 30-60 days before oil producers start seeing results.  It is based not just on innovation in the refining of oil, but also on innovation in the refining of data from operational business decisions can be made. The benefits of this approach including the following:

Improved fracking process efficiency

analytics case studies-FrackingFracking is a very technical process. Producers can have two wells on the same field that are performing at very different levels of efficiency. To address this issue, the oil company that we have been discussing throughout this piece is using real-time data to optimize its oil extraction across an entire oil field or region. Insights derived from these allow them to compare wells in the same region for efficiency or productivity and even switch off certain wells if the oil price drops below profitability thresholds. This ability is especially important as the price of oil continues to drop.  At $70/barrel, many operators go into the red while more efficient data driven operators can remain profitable at $40/barrel.  So efficiency is critical across a system of wells.

Using data to decide where to build wells in the first place

When constructing a fracking or sands well, you need more information on trends and formulas to extract oil from the ground.  On a site with 100+ wells for example, each one is slightly different because of water tables, ground structure, and the details of the geography. You need the right data, the right formula, and the right method to extract the oil at the best price and not impact the environment at the very same time.

The right technology delivers the needed business advantage

analytics case studiesOf course, technology is never been simple to implement. The company we are discussing has 1.2 Petabytes of data they were processing and this volume is only increasing.  They are running fiber optic cables down into wells to gather data in real time. As a result, they are receiving vast amounts of real time data but cannot store and analyze the volume of data efficiently in conventional systems. Meanwhile, the time to aggregate and run reports can miss the window of opportunity while increasing cost. Making matters worse, this company had a lot of different varieties of data. It also turns out that quite of bit of the useful information in their data sets was in the comments section of their source application.  So traditional data warehousing would not help them to extract the information they really need. They decided to move to new technology, Hadoop. But even seemingly simple problems, like getting access to data were an issue within Hadoop.  If you didn’t know the right data analyst, you might not get the data you needed in a timely fashion. Compounding things, a lack of Hadoop skills in Oklahoma proved to be a real problem.

The right technology delivers the right capability

The company had been using a traditional data warehousing environment for years.  But they needed help to deal with their Hadoop environment. This meant dealing with the volume, variety and quality of their source well data. They needed a safe, efficient way to integrate all types of data on Hadoop at any scale without having to learn the internals of Hadoop. Early adopters of Hadoop and other Big Data technologies have had no choice but to hand-code using Java or scripting languages such as Pig or Hive. Hiring and retaining big data experts proved time consuming and costly. This is because data scientists and analysts can spend only 20 percent of their time on data analysis and the rest on the tedious mechanics of data integration such as accessing, parsing, and managing data. Fortunately for this oil producer, it didn’t have to be this way. They were able to get away with none of the specialized coding required to scale performance on distributed computing platforms like Hadoop. Additionally, they were able “Map Once, Deploy Anywhere,” knowing that even as technologies change they can run data integration jobs without having to rebuild data processing flows.

Final remarks

It seems clear that we live in an era where data is at the center of just about every business. Data-ready enterprises are able to adapt and win regardless of changing market conditions. These businesses invested in building their enterprise analytics capability before market conditions change. In this case, these oil producers will be able to produce oil at lower costs than others within their industry. Analytics provides three benefits to oil refiners.

  • Better margins and lower costs from operations
  • Lowers risk of environmental impact
  • Lower time to build a successful well

In essence, those that build analytics as a core enterprise capability will continue to have a right to win within a dynamic oil pricing environment.

Related links

Related Blogs

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

Solution Brief: The Intelligent Data Platform
Author Twitter: @MylesSuer

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Does Your Sales Team Have What They Need to Succeed in 2015?

Like me, you probably just returned from an inspiring Sales Kick Off 2015 event. You’ve invested in talented people. You’ve trained them with the skills and knowledge they need to identify, qualify, validate, negotiate and close deals. You’ve invested in world-class applications, like Salesforce Sales Cloud, to empower your sales team to sell more effectively. But does your sales team have what they need to succeed in 2015?

Gartner predicts that as early as next year, companies will compete primarily on the customer experiences they deliver. So, every customer interaction counts. Knowing your customers is key to delivering great sales experiences.

If you’re not fueling Salesforce Sales Cloud with clean, consistent and connected customer information, your sales team may be at a disadvantage against the competition.
If you’re not fueling Salesforce Sales Cloud with clean, consistent and connected customer information, your sales team may be at a disadvantage against the competition.

But, inaccurate, inconsistent and disconnected customer information may be holding your sales team back from delivering great sales experiences. If you’re not fueling Salesforce Sales Cloud (or another Sales Force Automation (SFA) application) with clean, consistent and connected customer information, your sales team may be at a disadvantage against the competition.

To successfully compete and deliver great sales experiences more efficiently, your sales team needs a complete picture of their customers. They don’t want to pull information from multiple applications and then reconcile it in spreadsheets. They want direct access to the Total Customer Relationship across channels, touch points and products within their Salesforce Sales Cloud.

Watch this short video comparing a day-in-the-life of two sales reps competing for the same business. One has access to the Total Customer Relationship in Salesforce Sales Cloud, the other does not. Watch now: Salesforce.com with Clean, Consistent and Connected Customer Information.

Salesforce and Informatica Video

Is your sales team spending time creating spreadsheets by pulling together customer information from multiple applications and then reconciling it to understand the Total Customer Relationship across channels, touch points and products? If so, how much is it costing your business? Or is your sales team engaging with customers without understanding the Total Customer Relationship? How much is that costing your business?

Many innovative sales leaders are gaining a competitive edge by better leveraging their customer data to empower their sales teams to deliver great sales experiences. They are fueling business and analytical applications, like Salesforce Sales Cloud, with clean, consistent and connected customer information.  They are arming their sales teams with direct access to richer customer profiles, which includes the Total Customer Relationship across channels, touch points and products.

What measurable results have these sales leaders acheived? Merrill Lynch boosted sales productivity by 15%, resulting in $50M in annual impact. A $60B manufacturing company improved cross-sell and up-sell success by 5%. Logitech increased across channels: online, in their retail partner’s stores and through distribution partners.

This year, I believe more sales leaders will focus on leveraging their customer information for competitive advantage. This will help them shift from sales automation to sales optimization. What do you think?

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Posted in 5 Sales Plays, Business Impact / Benefits, Business/IT Collaboration, CIO, Cloud, Cloud Computing, Cloud Data Integration, Cloud Data Management, Customer Acquisition & Retention, Data Integration, Data Quality, Enterprise Data Management, Intelligent Data Platform, Master Data Management, Operational Efficiency, SaaS, Total Customer Relationship | Tagged , , , , , , , , , , , , , , , | 1 Comment

How a Business-led Approach Displaces an IT-led Project

In my previous blog, I talked about how a business-led approach can displace technology-led projects. Historically IT-led projects have invested significant capital while returning minimal business value. It further talks about how transformation roadmap execution is sustainable because the business is driving the effort where initiative investments are directly traceable to priority business goals.

business-led approachFor example, an insurance company wants to improve the overall customer experience. Mature business architecture will perform an assessment to highlight all customer touch points. It requires a detailed capability map, fully formed, customer-triggered value streams, value stream/ capability cross-mappings and stakeholder/ value stream cross-mappings. These business blueprints allow architects and analysts to pinpoint customer trigger points, customer interaction points and participating stakeholders engaged in value delivery.

One must understand that value streams and capabilities are not tied to business unit or other structural boundaries. This means that while the analysis performed in our customer experience example may have been initiated by a given business unit, the analysis may be universally applied to all business units, product lines and customer segments. Using the business architecture to provide a representative cross-business perspective requires incorporating organization mapping into the mix.

Incorporating the application architecture into the analysis and proposed solution is simply an extension of business architecture mapping that incorporates the IT architecture. Robust business architecture is readily mapped to the application architecture, highlighting enterprise software solutions that automate various capabilities, which in turn enable value delivery. Bear in mind, however, that many of the issues highlighted through a business architecture assessment may not have corresponding software deployments since significant interactions across the business tend to be manual or desktop-enabled. This opens the door to new automation opportunities and new ways to think about business design solutions.

Building and prioritizing the transformation strategy and roadmap is dramatically simplified once all business perspectives needed to enhance customer experience are fully exposed. For example, if customer service is a top priority, then that value stream becomes the number one target, with each stage prioritized based on business value and return on investment. Stakeholder mapping further refines design approaches for optimizing stakeholder engagement, particularly where work is sub-optimized and lacks automation.

Capability mapping to underlying application systems and services provides the basis for establishing a corresponding IT deployment program, where the creation and reuse of standardized services becomes a focal point. In certain cases, a comprehensive application and data architecture transformation becomes a consideration, but in all cases, any action taken will be business and not technology driven.

Once this occurs, everyone will focus on achieving the same goals, tied to the same business perspectives, regardless of the technology involved.

Twitter @bigdatabeat

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Good Corporate Governance Is Built Upon Good Information and Data Governance

Good Corporate Governance

Good Corporate Governance

As you may know, COSO provides the overarching enterprise framework for corporate governance. This includes operations, reporting, and compliance. A key objective for COSO is the holding of individuals accountable for their internal control responsibilities. The COSO process typically starts by accessing risks and developing sets of control activities to mitigate discovered risks.

On an ongoing basis, organizations then need as well to generate relevant, quality information to evaluate the functioning of established internal controls. And finally they need to select, develop, and perform ongoing evaluations to ascertain whether the internal controls are present and functioning appropriately. Having said all of this, the COSO framework will not be effective without first having established effective Information and Data Governance.

So you might be asking yourself as a corporate officer why should you care about this topic anyway. Isn’t this the job of the CIO or that new person, the CDO? The answer is no. Today’s enterprises are built upon data and analytics. The conundrum here is that “you can’t be analytical without data and you can’t be really good at analytics without really good data”. (Analytics at Work, Thomas Davenport, Harvard Business Review Press, page 23). What enterprises tell us they need is great data—data which is clean, safe, and increasingly connected. And yes, the CIO is going to make this happen for you, but they are not going to do this appropriately without the help of data stewards that you select from your business units. These stewards need to help the CIO or CDO determine what data matters to the enterprise. What data should be secured? And finally, they will determine what data, information, and knowledge will drive the business right to win on an ongoing basis.

So now that you know why your involvement matters, I need to share that this control activity is managed by a supporting standard to COSO, COBIT 5. To learn specifically about what COBIT 5 recommends for Information and Data Governance, please click and read an article from the latest COBIT Focus entitled “Using COBIT 5 to Deliver Information and Data Governance”.

Twitter: @MylesSuer

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Analytics Stories: A Pharmaceutical Case Study

Pharma CIOAs I have shared within other posts within this series, businesses are using analytics to improve their internal and external facing business processes and to strengthen their “right to win” within the markets that they operate. For pharmaceutical businesses, strengthening the right to win begins and ends with the drug product development lifecycle. I remember, for example, talking several years ago to the CFO of major pharmaceutical company and having him tell me the most important financial metrics for him had to do with reducing the time to market for a new drug and maximizing the period of patent protection. Clearly, the faster a pharmaceutical company gets a product to market, the faster it can begin to earning a return on its investment.

Fragmented data challenged analytical efforts

PharmaceuticalAt Quintiles, what the business needed was a system with the ability to optimize design, execution, quality, and management of clinical trials. Management’s goal was to dramatically shorten time to complete each trial, including quickly identifying when a trial should be terminated. At the same time, management wanted to continuously comply with regulatory scrutiny from Federal Drug Administration and use it to proactively monitor and manage notable trial events.

The problem was Quintiles data was fragmented across multiple systems and this delayed the ability to make business decisions. Like many organizations, Quintiles data was located in multiple incompatible legacy systems. This meant there was extensive manual data manipulation before data could become useful. As well, incompatible legacy systems impeded data integration and normalization, and prohibited a holistic view across all sources. Making matters worse, management felt that it lacked the ability to take corrective actions in a timely manner.

Infosario launched to manage Quintiles analytical challenges

PharmaceuticalTo address these challenges, Quintiles leadership launched the Infosario Clinical Data Management Platform to power its pharmaceutical product development process. Infosario breaks down the silos of information that have limited combining massive quantities of scientific and operational data collected during clinical development with tens of millions of real-world patient records and population data. This step empowered researchers and drug developers to unlock a holistic view of data. This improved decision-making, and ultimately increasing the probability of success at every step in a product’s lifecycle. Quintiles Chief Information Officer, Richard Thomas says, “The drug development process is predicated upon the availability of high quality data with which to collaborate and make informed decisions during the evolution of a product or treatment”.

What Quintiles has succeeded in doing with Infosario is the integration of data and processes associated with a drug’s lifecycle. This includes creating a data engine to collect, clean, and prepare data for analysis. The data is then combined with clinical research data and information from other sources to provide a set of predictive analytics. This of course is aimed at impacting business outcomes.

The Infosario solution consists of several core elements

At its core, Infosario provides the data integration and data quality capabilities for extracting and organizing clinical and operational data. The approach combines and harmonizes data from multiple heterogeneous sources into what is called the Infosario Data Factory repository. The end is to accelerate reporting. Infosario leverages data federation /virtualization technologies to acquire information from disparate sources in a timely manner without affecting the underlying foundational enterprise data warehouse. As well, it implements a rule-based, real-time intelligent monitoring and alerting to enable the business to tweak and enhance business processes as they are needed. A “monitoring and alerting layer” sits on top of the data, with the facility to rapidly provide intelligent alerts to appropriate stakeholders regarding trial-related issues and milestone events. Here are some more specifics on the components of the Infosario solution:

• Data Mastering provides the capability to link multi-domains of data. This enables enterprise information assets to be actively managed, with an integrated view of the hierarchies and relationships.

• Data Management provides the high performance, scalable data integration needed to support enterprise data warehouses and critical operational data stores.

• Data Services provides the ability to combine data from multiple heterogeneous data sources into a single virtualized view. This allows Infosario to utilize data services to accelerate delivery of needed information.

• Complex Event Processing manages the critical task of monitoring enterprise data quality events and delivering alerts to key stakeholders to take necessary action.

Parting Thoughts

According to Richard Thomas, “the drug development process rests on the high quality data being used to make informed decisions during the evolution of a product or treatment. Quintiles’ Infosario clinical data management platform gives researchers and drug developers with the knowledge needed to improve decision-making and ultimately increase the probability of success at every step in a product’s lifecycle.” This it enables enhanced data accuracy, timeliness, and completeness. On the business side, it has enables Quintiles to establish industry-leading information and insight. And this in turn has enables the ability to make faster, more informed decisions, and to take action based on insights. This importantly has led to a faster time to market and a lengthening of the period of patent protection.

Related links

Related Blogs

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

Solution Brief: The Intelligent Data Platform

Author Twitter: @MylesSuer

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CES, Digital Strategy and Architecture: Are You Ready?

CES, Digital Strategy and Architecture

CES, Digital Strategy and Architecture

CES, the International Consumer Electronics show is wrapping up this week and the array of new connected products and technologies was truly impressive. “The Internet of Things” is moving from buzzword to reality.  Some of the major trends seen this week included:

  • Home Hubs from Google, Samsung, and Apple (who did not attend the show but still had a significant impact).
  • Home Hub Ecosystems providing interoperability with cars, door locks, and household appliances.
  • Autonomous cars, and intelligent cars
  • Wearable devices such as smart watches and jewelry.
  • Drones that take pictures and intelligently avoid obstacles.  …Including people trying to block them.  There is a bit of a creepy factor here!
  • The next generation of 3D printers.
  • And the intelligent baby pacifier.  The idea is that it takes the baby’s temperature, but I think the sleeper hit feature on this product is the ability to locate it using GPS and a smart phone. How much money would you pay to get your kid to go to sleep when it is time to do so?

Digital Strategies Are Gaining Momentum

There is no escaping the fact that the vast majority of companies out there have active digital strategies, and not just in the consumer space. The question is: Are you going to be the disruptor or the disruptee?  Gartner offered an interesting prediction here:

“By 2017, 60% of global enterprise organizations will execute on at least one revolutionary and currently unimaginable business transformation effort.”

It is clear from looking at CES, that a lot of these products are “experiments” that will ultimately fail.  But focusing too much on that fact is to risk overlooking the profound changes taking place that will shake out industries and allow competitors to jump previously impassible barriers to entry.

IDC predicted that the Internet of Things market would be over $7 Trillion by the year 2020.  We can all argue about the exact number, but something major is clearly happening here.  …And it’s big.

Is Your Organization Ready?

A study by Gartner found that 52% of CEOs and executives say they have a digital strategy.  The problem is that 80% of them say that they will “need adaptation and learning to be effective in the new world.”  Supporting a new “Internet of Things” or connected device product may require new business models, new business processes, new business partners, new software applications, and require the collection and management of entirely new types of data.  Simply standing up a new ERP system or moving to a cloud application will not help your organization to deal with the new business models and data complexity.

Architect’s Call to Action

Now is the time (good New Year’s resolution!) to get proactive on your digital strategy.  Your CIO is most likely deeply engaged with her business counterparts to define a digital strategy for the organization. Now is the time to be proactive in terms of recommending the IT architecture that will enable them to deliver on that strategy – and a roadmap to get to the future state architecture.

Key Requirements for a Digital-ready Architecture

Digital strategy and products are all about data, so I am going to be very data-focused here.  Here are some of the key requirements:

  • First, it must be designed for speed.  How fast? Your architecture has to enable IT to move at the speed of business, whatever that requires.  Consider the speed at which companies like Google, Amazon and Facebook are making IT changes.
  • It has to explicitly directly link the business strategy to the underlying business models, processes, systems and technology.
  • Data from any new source, inside or outside your organization, has to be on-boarded quickly and in a way that it is immediately discoverable and available to all IT and business users.
  • Ongoing data quality management and Data Governance must be built into the architecture.  Point product solutions cannot solve these problems.  It has to be pervasive.
  • Data security also has to be pervasive for the same reasons.
  • It must include business self-service.  That is the only way that IT is going to be able to meet the needs of business users and scale to the demands of the changes required by digital strategy.

Resources:

For a webinar on connecting business strategy to the architecture of business transformation see; Next-Gen Architecture: A “Business First” Approach for Agile Architecture.   With John Schmidt of Informatica and Art Caston, founder of Proact.

For next-generation thinking on enterprise data architectures see; Think “Data First” to Drive Business Value

For more on business self-service for data preparation and a free software download.

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Data Security – A Major Concern in 2015

Data Security

Data Security – A Major Concern in 2015

2014 ended with a ton of hype and expectations and some drama if you are a data security professional or business executive responsible for shareholder value.  The recent attacks on Sony Pictures by North Korea during December caught everyone’s attention, not about whether with Sony would release “The Interview” but how vulnerable we as a society are to these criminal acts.

I have to admit, I was one of those who saw the movie and found the film humorous to say the least and can see why a desperate regime like North Korea would not want their leader admitting they love margarita’s and Katy Perry. What concerned me about the whole event was whether these unwanted security breaches were now just a fact of life?  As a disclaimer, I have no affinity over the downfall of the North Korean government however what transpired was fascinating and amazing that companies like Sony continue to struggle to protect sensitive data despite being one of the largest companies in the world.

According to the Identity Theft Resource Center, there were 761 reported data security breaches in 2014 impacting over 83 million breached records across industries and geographies with B2B and B2C retailers leading the pack with 79.2% of all breaches. Most of these breaches originated through the internet via malicious WORMS and viruses purposely designed to identify and rely back sensitive information including credit card numbers, bank account numbers, and social security information used by criminals to wreak havoc and significant financial losses to merchants and financial institutions. According to the 2014 Ponemon Institute Research study:

  • The average cost of cyber-crime per company in the US was $12.7 million this year, according to the Ponemon report, and US companies on average are hit with 122 successful attacks per year.
  • Globally, the average annualized cost for the surveyed organizations was $7.6 million per year, ranging from $0.5 million to $61 million per company. Interestingly, small organizations have a higher per-capita cost than large ones ($1,601 versus $437), the report found.
  • Some industries incur higher costs in a breach than others, too. Energy and utility organizations incur the priciest attacks ($13.18 million), followed closely by financial services ($12.97 million). Healthcare incurs the fewest expenses ($1.38 million), the report says.

Despite all the media attention around these awful events last year, 2015 does not seem like it’s going to get any better. According to CNBC just this morning, Morgan Stanley reported a data security breach where they had fired an employee who it claims stole account data for hundreds of thousands of its wealth management clients. Stolen information for approximately 900 of those clients was posted online for a brief period of time.  With so much to gain from this rich data, businesses across industries have a tough battle ahead of them as criminals are getting more creative and desperate to steal sensitive information for financial gain. According to a Forrester Research, the top 3 breach activities included:

  • Inadvertent misuse by insider (36%)
  • Loss/theft of corporate asset (32%)
  • Phishing (30%)

Given the growth in data volumes fueled by mobile, social, cloud, and electronic payments, the war against data breaches will continue to grow bigger and uglier for firms large and small.  As such, Gartner predicts investments in Information Security Solutions will grow further 8.2 percent in 2015 vs. 2014 reaching $76.9+ billion globally.  Furthermore, by 2018, more than half of organizations will use security services firms that specialize in data protection, security risk management and security infrastructure management to enhance their security postures.

Like any war, you have to know your enemy and what you are defending. In the war against data breaches, this starts with knowing where your sensitive data is before you can effectively defend against any attack. According to the Ponemon Institute, 18% of firms who were surveyed said they knew where their structured sensitive data was located where as the rest were not sure. 66% revealed that if would not be able to effectively know if they were attacked.   Even worse, 47% were NOT confident at having visibility into users accessing sensitive or confidential information and that 48% of those surveyed admitted to a data breach of some kind in the last 12 months.

In closing, the responsibilities of today’s information security professional from Chief Information Security Officers to Security Analysts are challenging and growing each day as criminals become more sophisticated and desperate at getting their hands on one of your most important assets….your data.  As your organizations look to invest in new Information Security solutions, make sure you start with solutions that allow you to identify where your sensitive data is to help plan an effective data security strategy both to defend your perimeter and sensitive data at the source.   How prepared are you?

For more information about Informatica Data Security Solutions:

  • Download the Gartner Data Masking Magic Quadrant Report
  • Click here to learn more about Informatica’s Data Masking Solutions
  • Click here to access Informatica Dynamic Data Masking: Preventing Data Breaches with Benchmark-Proven Performance whitepaper
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Posted in Application ILM, Banking & Capital Markets, Big Data, CIO, Data masking, Data Privacy, Data Security | Tagged , , | Leave a comment

Imagine A New Sheriff In Town

As we renew or reinvent ourselves for 2015, I wanted to share a case of “imagine if” with you and combine it with the narrative of an American frontier town out West, trying to find a new Sheriff – a Wyatt Earp.  In this case the town is a legacy European communications firm and Wyatt and his brothers are the new managers – the change agents.

management

Is your new management posse driving change?

Here is a positive word upfront.  This operator has had some success in rolling outs broadband internet and IPTV products to residential and business clients to replace its dwindling copper install base.  But they are behind the curve on the wireless penetration side due to the number of smaller, agile MVNOs and two other multi-national operators with a high density of brick-and-mortar stores, excellent brand recognition and support infrastructure.  Having more than a handful of brands certainly did not make this any easier for our CSP.   To make matters even more challenging, price pressure is increasingly squeezing all operators in this market.  The ones able to offset the high-cost Capex for spectrum acquisitions and upgrades with lower-cost Opex for running the network and maximizing subscriber profitability, will set themselves up for success (see one of my earlier posts around the same phenomenon in banking).

Not only did they run every single brand on a separate CRM and billing application (including all the various operational and analytical packages), they also ran nearly every customer-facing-service (CFS) within a brand the same dysfunctional way.  In the end, they had over 60 CRM and the same number of billing applications across all copper, fiber, IPTV, SIM-only, mobile residential and business brands.  Granted, this may be a quite excessive example; but nevertheless, it is relevant for many other legacy operators.

As a consequence, their projections indicate they incur over €600,000 annually in maintaining duplicate customer records (ignoring duplicate base product/offer records for now) due to excessive hardware, software and IT operations.  Moreover, they have to stomach about the same amount for ongoing data quality efforts in IT and the business areas across their broadband and multi-play service segments.

Here are some more consequences they projected:

  • €18.3 million in call center productivity improvement
  • €790,000 improvement in profit due to reduced churn
  • €2.3 million reduction in customer acquisition cost
  • And if you include the fixing of duplicate and conflicting product information, add another €7.3 million in profit via billing error and discount reduction (which is inline with our findings from a prior telco engagement)

Despite major business areas not having contributed to the investigation and improvements being often on the conservative side, they projected a 14:1 return ratio between overall benefit amount and total project cost.

Coming back to the “imagine if” aspect now, one would ask how this behemoth of an organization can be fixed.  Well, it will take years but without management (in this case new managers busting through the door), this organization has the chance to become the next Rocky Mountain mining ghost town.

Busting into the cafeteria with new ideas & looking good while doing it?

Busting into the cafeteria with new ideas & looking good while doing it?

The good news is that this operator is seeing some management changes now.  The new folks have a clear understanding that business-as-usual won’t do going forward and that centralization of customer insight (which includes some data elements) has its distinct advantages.  They will tackle new customer analytics, order management, operational data integration (network) and next-best-action use cases incrementally. They know they are in the data, not just the communication business.  They realize they have to show a rapid succession of quick wins rather than make the organization wait a year or more for first results.  They have fairly humble initial requirements to get going as a result.

You can equate this to the new Sheriff not going after the whole organization of the three, corrupt cattle barons, but just the foreman of one of them for starters.  With little cost involved, the Sheriff acquires some first-hand knowledge plus he sends a message, which will likely persuade others to be more cooperative going forward.

What do you think? Is new management the only way to implement drastic changes around customer experience, profitability or at least understanding?

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Posted in Big Data, Business Impact / Benefits, CIO, CMO, Customer Acquisition & Retention, Customer Services, Customers, Data Governance, Data Integration, Data Quality, Enterprise Data Management, Governance, Risk and Compliance, Master Data Management, Operational Efficiency, Product Information Management, Telecommunications, Vertical | Tagged , , , , , , , , , | Leave a comment