Category Archives: CIO
Adrian gathered experts and built workgroups to dig into the issue and do root cause analysis. The workgroups came back with some pretty surprising results.
- Most people expected that “incorrect data” (missing, out of date, incomplete, or wrong data) would be the main problem. What they found was that this was only #5 on the list of issues.
- The #1 issue was “Too much data.” People working with the data could not find the data they needed because there was too much data available, and it was hard to figure out which was the data they needed.
- The #2 issue was that people did not know the meaning of data. And because people had different interpretations of the data, the often produced analyses with conflicting results. For example, “claims paid date” might mean the date the claim was approved, the date the check was cut or the date the check cleared. These different interpretations resulted in significantly different numbers.
- In third place was the difficulty in accessing the data. Their environment was a forest of interfaces, access methods and security policies. Some were documented and some not.
In one of the workgroups, a senior manager put the problem in a larger business context;
“Not being able to leverage the data correctly allows competitors to break ground in new areas before we do. Our data in my opinion is the ‘MOST’ important element for our organization.”
What started as a relatively straightforward data quality project became a more comprehensive enterprise data management initiative that could literally change the entire organization. By the project’s end, Adrian found himself leading the data strategy of the organization.
This kind of story is happening with increasing frequency across all industries as all businesses become more digital, the quantity and complexity of data grows, and the opportunities to offer differentiated services based on data grow. We are entering an era of data-fueled organizations where the competitive advantage will go to those who use their data ecosystem better than their competitors.
Gartner is predicting that we are entering an era of increased technology disruption. Organizations that focus on data as their competitive edge will have the advantage. It has become clear that a strong enterprise data architecture is central to the strategy of any industry-leading organization.
For more future-thinking on the subject of enterprise data management and data architecure see Think ‘Data First” to Drive Business Value
When you talk to CIOs today, you strongly get the feeling that that the CIO role is about to change. One CIO said to me that the CIO is the midst of “a sea state change”. Recently, I got to talk with a half a dozen CIOs on what is most important to their role and how they see the role as a whole changing over the next few years. Their answers were thought provoking and worthy of broader discussion.
CIOs say it is becoming less and less common for the CIO to come up through the technical ranks. One CIO said it used to common for one to become a CIO after being a CTO but this has changed. More and more business people are becoming CIOs. The CIO role today is “more about understanding the business than to understanding technology. It is more about business alignment than technology alignment”. This need for better business alignment led one CIO to say that consulting is a great starting point for a future IT leader. Consulting provides a future IT leader with the following: 1) vertical expertise; 2) technical expertise; and 3) systems integration expertise. Another CIO suggested that the CIO role sometimes is being used these days as a rotational position for a future business leader. “It provides these leaders with technical skills that they will need in their career.” Regardless, it is increasingly clear that business expertise versus technical expertise is much more important.
How will the CIO role change?
CIOs, in general, believe that their role will change in the next five years. One CIO insisted that CIOs are going to continue to be incredibly important to their enterprises. However, he said that CIOs have the opportunity to create analytics that guide the business in finding value. For CIOs to do this, they need to connect the dots between transactional systems, BI, and the planning systems. They need to convert data into action. This means they need to enable the business to be proactive and cut the time it takes for them to execute. CIOs need in his view to enable their enterprises to generate differentiated value than competitors.
Another CIO sees the CIOs becoming the orchestrator vs. the builder of business services. This CIO said that “building stuff is now really table stakes”. Cloud and loosely oriented partnerships is bringing vendor management to the forefront. Agreeing with this point of view, a third CIO says that she sees CIOs moving from an IT role into a business role. She went onto say that “CIOs need to understand the business better and be able to partner better with the business. They need to understand the role for IT better and this includes understanding their firm’s business models better”.
A final CIO suggests something even more radical. He believes that the CIO role will disappear altogether or morph into something new. This CIO claims CIOs have the opportunity to become the chief digital officer or the COO. After all, the CIO is about implementing business processes.
For more technical CIOs, this CIO sees them reverting into CTOs but he worries at the same time about the importance of hardware and platform issues with the increasing importance of cloud—this type of role is going to become less and less relevant. This same CIO says that, in passing, CIOs screwed up a golden opportunity 10 years ago. At this time, CIOs one by one clawed their way to the table and separated themselves from the CFO. However, once they were at the table, they did not change their game. They continued to talk bits and bytes versus business issues. And one by one, they are being returned to the CFO to manage.
So change is inevitable. CIOs need to change their game or be changed by external forces. So let’s start the debate right now. How do you see the CIO role changing? Express your opinion. Let’s see where you and the above CIOs agree and more importantly where you differ?
Business leaders share with Fortune Magazine their view of Big Data
Fortune Magazine recently asked a number of business leaders about what Big Data means to them. These leaders provide three great stories for the meaning of Big Data. Phil McAveety at Starwood Hotels talked about their oldest hotel having a tunnel between the general manager’s office and the front desk. This way the general manager could see and hear new arrivals and greet each like an old friend. Phil sees Big Data as a 21st century version of this tunnel. It enables us to know our guests and send them offers that matter to them. Jamie Miller at GE says Big Data is being about transforming how they service their customers while simplifying the way they run their company. Finally, Ellen Richey at VISA says that big data holds the promise of making new connections between disperse bits of information creating value.
Everyone is doing it but nobody really knows why?
I find all of these definitions interesting, but they are all very different and application specific. This isn’t encouraging. The message from Gartner is even less so. They find that “everyone is doing it but nobody really knows why”. According to Matt Asay, “the gravitational pull of Big Data is now so strong that even people who haven’t a clue as to what it’s all about report that they are running Big Data projects”. Gartner found in their research that 64% of enterprises surveyed say they’re deploying or planning to deploy Big Data projects. The problem is that 56% of those surveyed are struggling trying to determine how to get value out of big data, and 23% of those surveyed are struggling at how to define Big Data. Hopefully, none of the latter are being counted in the 64%. . Regardless, Gartner believes that the number of companies with Big Data projects is only going to increase. The question is how many of projects are just a recast of an existing BI project in order to secure funding or approval. No one will ever know.
Managing the hype phase of Big Data
One CIO that we talked to worries about this hype phase of Big Data. He says the opportunity is to inform analytics and guiding and finding business value. However, worries whether past IT mistakes will repeat themselves. This CIO believes that IT has gone through three waves. IT has grown from homegrown systems to ERP to Business Intelligence/Big Data. ERP was supposed to solve all the problems of the homegrown solutions but it did not provide anything more than information on transactions. You could not understand what is going on out there with ERP. BI and Big Data is trying to go after this. However, this CIO worries that CEOs/CFOs will soon start complaining that the information garnered does not make the business more money. He worries that CEOs and CFOs will start effectively singing the Who song, “We won’t get fooled again.”
This CIO believes that to make more money, Big Data needs to connect the dots between transactional systems, BI, and planning systems. It needs to convert data into business value. This means Big Data is not just another silo of data, but needs to be connected and correlated to the rest of your data landscape to make it actionable. To do this, he says it needs to be proactive and cut the time to execution. It needs to enable the enterprise to generate value different than competitors. This, he believes mean that it needs to orchestrate activities so they maximize profit or increase customer satisfaction. You need to get to the point where it is sense and response. Transactional systems, BI, and planning systems need to provide intelligence to allow managers to optimize business processes execution. According to Judith Hurwitz, optimization is about establishing the correlation between streams of information and matching the resulting pattern with defined behaviors such as mitigating a threat or seizing an opportunity.”
Don’t leave your CEO and CFO with a sense of deja vu
In sum, Big Data needs to go further in generating enough value to not leave your CEO and CFO with a sense of deja vu. The question is do you agree? Do you personally have a good handle on what Big Data is? And lastly, do you fear a day when the value generated needs to be attested to?
Recently, I had the opportunity to interview half dozen CIOs and half dozen CFOs. Kind of like a marriage therapist, I got to see each party’s story about the relationship. CFOs, in particular, felt that the quality of the relationship could impact their businesses’ success. Armed with this knowledge, I wanted to see if I could help each leader build a better working relationship. Previously, I let CIO’s know about the emergence and significance of the strategic CFO. In today’s post, l will start by sharing the CIOs perspective on the CFO relationship and then I will discuss how CFOs can build better CIO relationships.
CIOs feel under the gun these days!
If you don’t know, CIOs feel under the gun these days. CIOs see their enterprises demanding ubiquitous computing. Users want to use their apps and expect corporate apps to look like their personal apps such as Facebook. They want to bring their own preferred devices. Most of all, , they want all their data on any device when they need it. This means CIOs are trying to manage a changing technical landscape of mobile, cloud, social, and big data. These are all vying for both dollars and attention. As a result, CIOs see their role in a sea change. Today, they need to focus less on building things and more on managing vendors. CIOs say that they need to 1) better connect what IT is doing to support the business strategy; 2) improve technical orchestration; and 3) improve process excellence. This is a big and growing charter.
CIOs see the CFO conversation being just about the numbers
CIOs worry that you don’t understand how many things are now being run by IT and that historical percentages of revenue may no longer appropriate. Think about healthcare, which used to be a complete laggard in technology but today it is having everything digitalized. Even a digital thermometer plugs into an iPad so it directly communicates with a patient record. The world has clearly changed. And CIOs worry that you view IT as merely a cost center and that you do not see the value generated through IT investment or the asset that information provides to business decision makers. However, the good news is that I believe that a different type of discussion is possible. And that CFOs have the opportunity to play an important role in helping to shape the value that CIOs deliver to the business.
CFOs should share their experience and business knowledge
CFOs that I talked to said that they believe the CFO/CIO relationship needs to be complimentary and that the roles have the most concentric rings. These CFOs believe that the stronger the relationship the better it is for their business. One area that you can help the CIO is in sharing your knowledge of the business and business needs. CIOs are trying to get closer to the business and you can help build this linkage and to support requests that come out of this process. Clearly, an aligned CFO can be “one of the biggest advocates of the CIO”. Given this, make sure that you are on your CIOs Investment Committee.
Tell your CIO about your data pains
CFOs need to be good customers too. CFOs that I talked to told me that they know their business has “a data issue”. They worry about the integrity of data from the source. CFOs see their role as relying increasingly on timely, accurate data. They, also, know they have disparate systems and too much manual stuff going on in the back office. For them, integration needs to exist from the frontend to the backend. Their teams personally feel the large number of manual steps.
For this reasons, CFOs, we talked to, believe that the integration of data is a big issue whether they are in a small or large business. Have you talked to your CIO about data integration or quality projects to change the ugliness that you have to live with day in day out? It will make you and the business more efficient. One CFO was blunt here saying “making life easier is all about the systems. If the systems suck then you cannot trust the numbers when you get them. You want to access the numbers easily, timely, and accurately. You want to make easier to forecast so you can set expectations with the business and externally”.
At the same time, CFOs that I talked to worried about the quality of financial and business data analysis. Once he had data, he worried about being able to analyze information effectively. Increasingly, CFOs say that they need to help drive synergies across their businesses. At the same time, CFOs increasingly need to manage upward with information. They want information for decision makers so they can make better decisions.
Changing the CIO Dialog
So it is clear that CFOs like you see data as a competitive advantage in particular financial data. The question is, as your unofficial therapist, why aren’t you having a discussion with your CIO not just about the numbers or financial justification for this or that system and instead, asking about the+ integration investment that can make your integration problems go away.
Last week I had the opportunity to attend the Gartner Security and Risk Management Summit. At this event, Gartner analysts and security industry experts meet to discuss the latest trends, advances, best practices and research in the space. At the event, I had the privilege of connecting with customers, peers and partners. I was also excited to learn about changes that are shaping the data security landscape.
Here are some of the things I learned at the event:
- Security continues to be a top CIO priority in 2014. Security is well-aligned with other trends such as big data, IoT, mobile, cloud, and collaboration. According to Gartner, the top CIO priority area is BI/analytics. Given our growing appetite for all things data and our increasing ability to mine data to increase top-line growth, this top billing makes perfect sense. The challenge is to protect the data assets that drive value for the company and ensure appropriate privacy controls.
- Mobile and data security are the top focus for 2014 spending in North America according to Gartner’s pre-conference survey. Cloud rounds out the list when considering worldwide spending results.
- Rise of the DRO (Digital Risk Officer). Fortunately, those same market trends are leading to an evolution of the CISO role to a Digital Security Officer and, longer term, a Digital Risk Officer. The DRO role will include determination of the risks and security of digital connectivity. Digital/Information Security risk is increasingly being reported as a business impact to the board.
- Information management and information security are blending. Gartner assumes that 40% of global enterprises will have aligned governance of the two programs by 2017. This is not surprising given the overlap of common objectives such as inventories, classification, usage policies, and accountability/protection.
- Security methodology is moving from a reactive approach to compliance-driven and proactive (risk-based) methodologies. There is simply too much data and too many events for analysts to monitor. Organizations need to understand their assets and their criticality. Big data analytics and context-aware security is then needed to reduce the noise and false positive rates to a manageable level. According to Gartner analyst Avivah Litan, ”By 2018, of all breaches that are detected within an enterprise, 70% will be found because they used context-aware security, up from 10% today.”
I want to close by sharing the identified Top Digital Security Trends for 2014
- Software-defined security
- Big data security analytics
- Intelligent/Context-aware security controls
- Application isolation
- Endpoint threat detection and response
- Website protection
- Adaptive access
- Securing the Internet of Things
The strategic CFO is different than the “1975 Controller CFO”
Traditionally, CIOs have tended to work with what one CIO called a “1975 Controller CFO”. For this reason, the relationship between CIOs and CFOs was expressed well in a single word “contentious”. But a new type of CFO is emerging that offers the potential of different type of relationship. These so called “strategic CFOs” can be an effective ally for CIOs. The question is which type of CFO do you have? In this post, I will provide you with a bit of a litmus test so you can determine what type of CFO you have but more importantly, I will share how you can take maximum advantage of having a strategic-oriented CFO relationship. But first let’s hear a bit more of the CIOs reactions to CFOs.
Views of CIOs according to CIO interviews
Clearly, “the relationship…with these CFOs is filled with friction”. Controller CFOs “do not get why so many things require IT these days. They think that things must be out of whack. One CIO said that they think technology should only cost 2-3% of revenue while it can easily reach 8-9% of revenue these days.” Another CIO complained by saying their discussion with a Controller CFOs is only about IT productivity and effectiveness. In their eyes, this has limited the topics of discussion to IT cost reduction, IT produced business savings, and the soundness of the current IT organization. Unfortunately, this CIO believe that Controller CFOs are not concerned with creating business value or sees information as an asset. Instead, they view IT as a cost center. Another CIO says Controller CFOs are just about the numbers and see the CIO role as being about signing checks. It is a classic “demand versus supply” issue. At the same times, CIOs say that they see reporting to Controller CFO as a narrowing function. As well, they believe it signals to the rest of the organization “that IT is not strategic and less important than other business functions”.
What then is this strategic CFO?
In contrast to their controller peers, strategic CFOs often have a broader business background than their accounting and a CPA peers. Many have, also, pursued an MBA. Some have public accounting experience. Others yet come from professions like legal, business development, or investment banking.
More important than where they came from, strategic CFOs see a world that is about more than just numbers. They want to be more externally facing and to understand their company’s businesses. They tend to focus as much on what is going to happen as they do on what has happened. Remember, financial accounting is backward facing. Given this, strategic CFOs spend a lot of time trying to understand what is going on in their firm’s businesses. One strategic CFO said that they do this so they can contribute and add value—I want to be a true business leader. And taking this posture often puts them in the top three decision makers for their business. There may be lessons in this posture for technology focused CIOs.
Why is a strategic CFO such a game changer for CIO?
One CIO put it this way. “If you have a modern day CFO, then they are an enabler of IT”. Strategic CFO’s agree. Strategic CFOs themselves as having the “the most concentric circles with the CIO”. They believe that they need “CIOs more than ever to extract data to do their jobs better and to provide the management information business leadership needs to make better business decisions”. At the same time, the perspective of a strategic CFO can be valuable to the CIO because they have good working knowledge of what the business wants. They, also, tend to be close to the management information systems and computer systems. CFOs typically understand the needs of the business better than most staff functions. The CFOs, therefore, can be the biggest advocate of the CIO. This is why strategic CFOs should be on the CIOs Investment Committee. Finally, a strategic CFO can help a CIO ensure their technology selections meet affordability targets and are compliant with the corporate strategy.
Are the priorities of a strategic CFO different?
Strategic CFOs still care P&L, Expense Management, Budgetary Control, Compliance, and Risk Management. But they are also concerned about performance management for the enterprise as whole and senior management reporting. As well they, they want to do the above tasks faster so finance and other functions can do in period management by exception. For this reason they see data and data analysis as a big issue.
Strategic CFOs care about data integration
In interviews of strategic CFOs, I saw a group of people that truly understand the data holes in the current IT system. And they intuit firsthand the value proposition of investing to fix things here. These CFOs say that they worry “about the integrity of data from the source and about being able to analyze information”. They say that they want the integration to be good enough that at the push of button they can get an accurate report. Otherwise, they have to “massage the data and then send it through another system to get what you need”.
These CFOs say that they really feel the pain of systems not talking to each other. They understand this means making disparate systems from the frontend to the backend talk to one another. But they, also, believe that making things less manual will drive important consequences including their own ability to inspect books more frequently. Given this, they see data as a competitive advantage. One CFO even said that they thought data is the last competitive advantage.
Strategic CFOs are also worried about data security. They believe their auditors are going after this with a vengeance. They are really worried about getting hacked. One said, “Target scared a lot of folks and was to many respects a watershed event”. At the same time, Strategic CFOs want to be able to drive synergies across the business. One CFO even extolled the value of a holistic view of customer. When I asked why this was a finance objective versus a marketing objective, they said finance is responsible for business metrics and we have gaps in our business metrics around customer including the percentage of cross sell is taking place between our business units. Another CFO amplified on this theme by saying that “increasingly we need to manage upward with information. For this reason, we need information for decision makers so they can make better decisions”. Another strategic CFO summed this up by saying “the integration of the right systems to provide the right information needs to be done so we and the business have the right information to manage and make decisions at the right time”.
So what are you waiting for?
If you are lucky enough to have a Strategic CFO, start building your relationship. And you can start by discussing their data integration and data quality problems. So I have a question for you. How many of you think you have a Controller CFO versus a Strategic CFO? Please share here.
After I graduated from business school, I started reading Fortune Magazine. I guess that I became a regular reader because each issue largely consists of a set of mini-business cases. And over the years, I have even started to read the witty remarks from the managing editor, Andy Serwer. However, this issue’s comments were even more evocative than usual.
Connectivity is perhaps the biggest opportunity of our time
Andy wrote, “Connectivity is perhaps the biggest opportunity of our time. As technology makes the world smaller, it is clear that the countries and companies that connect the best—either in terms of, say traditional infrastructure or through digital networks are in the drivers’ seat”. Andy sees differentiated connectivity as involving two elements–access and content. This is important to note because Andy believes the biggest winners going forward are going to be the best connectors to each.
Enterprises need to evaluate how the collect, refine, and make useful data
But how do enterprises establish world class connectivity to content? I would argue–whether you are talking about large or small data—it comes from improving an enterprise’s abiity collect, refine, and create useful data. In recent CFO research, the importance of enterprise data gathering capabilities was stressed. CFOs said that their enterprises need to “get data right” at the same time as they confirmed that their enterprises in fact have a data issue. The CFOs said that they are worried about the integrity of data from the source forward. And once they manually create clean data, they worry about making this data useful to their enterprises. Why does this data matter so much to the CFO? Because as CFOs get more strategic, they are trying to make sure their firms drive synergies across their businesses.
Business need to make sense of data and get it to business users faster
One CFO said it this way, “data is potentially the only competitive advantage left”. Yet another said, “our businesses needs to make better decisions from data. We need to make sense of data faster.” At the same time leading edge thinkers like Geoffrey Moore has been suggesting that businesses need to move from “systems of record” applications to “system of engagement” applications. This notion suggests the importance of providing more digestible apps, but also the importance of recognizing that the most important apps for business users will provide relevant information for decision making. Put another way, data is clearly becoming fuel to the enterprise decision making.
“Data Fueled Apps” will provide a connectivity advantage
For this reason, “data fueled” apps will be increasingly important to the business. Decision makers these days want to practice “management by walking around” to quote Tom Peter’s Book, “In Search of Excellence”. And this means having critical, fresh data at their fingertips for each and every meeting. And clearly, organizations that provide this type of data connectivity will establish the connectivity advantage that Serwer suggested in his editor comments. This of course applies to consumer facing apps as well. Server, also, comments on the impacts of Apple and Facebook. Most consumers today are far better informed before they make a purchase. The customer facing apps, for example Amazon, that have led the way have provided the relevant information for the consumer to inform them on their purchase journey.
Delivering “Data Fueled Apps” to the Enterprise
But how do you create the enterprise wide connectivity to power the “Data Fueled Apps?” It is clear from the CFOs comments work is needed here. That work involves creating data which is systematically clean, safe, and connected. Why does this data need to be clean? The CFOs we talked to said that when the data is not clean then they have to manually massage the data and then move from system to system. This is not providing the kind of system of engagement envisioned by Geoffrey Moore. What this CFO wants to move to a world where he can access the numbers easily, timely, and accurately”.
Data, also, needs to be safe. This means that only people with access should be able to see data whether we are talking about transactional or analytical data. This may sound obvious, but very few isolate and secure data as it moves from system to system. And lastly, data needs to be connected. Yet another CFO said, “the integration of the right systems to provide the right information needs to be done so we have the right information to manage and make decisions at the right time”. He continued by saying “we really care about technology integration and getting it less manual. It means that we can inspect the books half way through the cycle. And getting less manual means we can close the books even faster. However, if systems don’t talk (connect) to one another, it is a big issue”.
Finally, whether we are discussing big data or small data, we need to make sure the data collected is more relevant and easier to consume. What is needed here is a data intelligence layer provides easy ways to locate useful data and recommend or guide ways to improve the data. This way analysts and leaders can spend less time on searching or preparing data and more time on analyzing the data to connect the business dots. This can involve mapping data relationship across all applications and being able to draw inferences from data to drive real time responses.
So in this new connected world, we need to first set up a data infrastructure to continuously make data clean, safe, and connected regardless of use case. It might not be needed to collect data, but the data infrastructure may be needed to define the connectivity (in the shape of access and content). We also need to make sure that the infrastructure for doing this is reusable so that the time from concept to new data fueled app is minimized. And then to drive informational meaning, we need to layer on top the intelligence. With this, we can deliver “data fueled apps” that enable business users the access and content to drive better business differentiation and decisioning!
The conversation at the Gartner Enterprise Architecture Summit was very interesting last week. They central them for years had been idea of closely linking enterprise architecture with the goals and strategy. This year, Gartner added another layer to that conversation. They are now actively promoting the idea of enterprise architects as strategists.
The reason why is simple. The next wave of change is coming and it will significantly disrupt everybody. Even worse, your new competitors may be coming from other industries.
Enterprise architects are in a position to take a leading role within the strategy process. This is because they are the people who best understand both business strategy and technology trends.
Some of the key ideas discussed included:
- The boundaries between physical and digital products will blur
- Every organization will need a technology strategy to survive
- Gartner predicts that by 2017: 60% of the Global 1,000 will execute on at least one revolutionary and currently unimaginable business transformation effort.
- The change is being driven by trends such as mobile, social, the connectedness of everything, cloud/hybrid, software-defined everything, smart machines, and 3D printing.
I agree with all of this. My view is that this means that it is time for enterprise architects to think very differently about architecture. Enterprise applications will come and go. They are rapidly being commoditized in any case. They need to think like strategists; in terms of market differentiation. And nothing will differentiate an organization more than their data. Example: Google autonomous cars. Google is jumping across industry boundaries to compete in a new market with data as their primary differentiator. There will be many others.
Years of thinking of architecture from an application-first or business process-first perspective have left us with silos of data and the classic ‘spaghetti diagram” of data architecture. This is slowing down business initiative delivery precisely at the time organizations need to accelerate and make data their strategic weapon. It is time to think data-first when it comes to enterprise architecture.
You will be seeing more from Informatica on this subject over the coming weeks and months.
Take a minute to comment on this article. Your thoughts on how we should go about changing to a data-first perspective, both pro and con are welcomed.
Also, remember that Informatica is running a contest to design the data architecture of the year 2020. Full details are here.