Informatica Perspectives

Nicholas Carr infamously penned “Why IT Doesn’t Matter” back in 2003, and many in the IT world howled their indignity at the idea. Many proved over and over that IT did matter in many businesses. IT did provide competitive advantage.

But part of what he stated does resonate now. Business applications used to be the epitome of how IT helped differentiate an enterprise. American Airlines invented the yield management system for allocating and pricing airline seats, revolutionizing the industry and generating an estimated $1.4 billion in additional revenues over three years. MCI won five points of market share from AT&T in the 1990s with its Friends and Family plan, enabled by its uniquely flexible billing application. Bank of America cemented customer relationships and leapfrogged competitors by providing state-of-the-art electronic bill pay capabilities.

But more and more, the custom or customized application is dying. Of course, there will always be custom applications, and some companies and industries such as Wall Street will remain highly dependent on them. But for many enterprises, the cost of maintenance and the inflexibility caused by decades of either building custom applications, or highly customizing packaged applications from vendors, has simply become too high to bear. Many organizations have laid down a new law: applications are to be purchased, and they are to be implemented vanilla— no customization. Several CIOs at a CIO conference I recently attended stated this as their go-forward strategy. If the applications are vanilla, they can no longer be the source of competitive differentiation.

So what in IT is now the source of competitive advantage? The data. The data transcends the application. The data outlives the applications. Data is more important than the applications. After all, the applications are the means to capture the data, but the data captures what is actually going on in the business.

IT organizations need to shift their priorities to recognize this reality and to focus on their data infrastructures. We’re already seeing signs that this is happening. Historically, the applications folks tended to be at the top of the totem pole in the IT organization. But more and more IT executives are putting their key managers on data integration and data management. Some are even anointing data czars or chief data officers. In fact, at the conference, the CIO of an insurance company asked me for leads in recruiting a data czar, a position he was about to create. (If anyone wants the job of data czar in the Philadelphia area, let me know.) The CIO needed someone to think about data and information strategically across the entire enterprise, while his existing IT leadership kept the shop running smoothly.

Applications are still a core foundation to any business. But like email and networking, they are becoming commoditized. The key to competitive differentiation is in your data and how you integrate and manage it.

Next posting: Why you should throw out your ROI analyses.

This week, I attended a CIO conference in Philadelphia, for the first time in a couple of years. It was really good to hear them talk about their experiences, goals and issues, and to talk with some of them one on one. It spurred a bunch of new thoughts, which I’ll be writing about in a series of upcoming blogs. This first posting is on CIOs playing offense.

In my last posting, I talked about the Dr. Jekyll/Mr. Hyde nature of data—data being both an asset and a liability. The CIOs talked about playing offense vs. defense. They really wanted to be engaged with business transformation and growth initiatives. But many were saddled with cumbersome, expensive IT environments that sucked up 90% of their IT spend and resources just to “keep the lights on”. In other words, they were spending almost all their time and energy playing defense. [Read more]

I have been traveling to different cities on the Informatica 9 World Tour, talking to customers and partners about their painpoints around data and their ability to support the needs of the business.  In these discussions, one topic that has resonated strongly is the Dr. Jekyll/Mr. Hyde nature of data.

We all know that there's simply more information and data out there nowadays.  More types of data, coming from more places: partners, customers, suppliers, cloud applications.  Exponentially growing volumes.  More people, both business and IT, getting involved with the data.  Decisions and processes happening more and more in real time. [Read more]

Call me a convert. I have a renewed faith in the power of the community. I finally started using Twitter today in order to keep up with the real-time commentary flowing out of our industry analyst conference (#infaanalyst). It’s been enlightening (and often amusing) getting plugged into the thoughts of the analyst community/blogosphere around data integration and information management.

And today, we announced the Informatica Marketplace. This is going to turbocharge the already robust community for data integration. Tens of thousands of Informatica developers are already using LinkedIn, Facebook, Informatica’s TechNet and other venues to connect with each other, sharing knowledge and solutions for data integration, data quality, MDM and more. The Marketplace is going to make that 10x easier and more productive.

Buyers will have a single place to go to find pre-built solutions that will let them deliver their projects faster and cheaper. Sellers will have a way to reach the broad data integration community to market their wares and show off their expertise.

And it’s going to be fun. To get things going, we are organizing a pre-launch contest to let developers strut their stuff. The top gurus will get top billing on the marketplace, and their 5 minutes of fame onstage at InformaticaWorld 2010.

I honestly can’t wait to see what starts coming in. There’s going to be great stuff that we never would have thought of on our own—and that’s the whole point of the marketplace.

Philip Russom at TDWI is doing an interesting study on the concept of Unified Data Management (UDM).  In fact, we thought it was interesting enough to sponsor the report, along with some other vendors.

Philip’s preamble:  “In most organizations today, data is managed in isolated silos by independent teams using data management tools for data integration, data quality, metadata management, master data management, content management, and so on. However, there’s a trend toward unified data management (UDM), a practice that holistically coordinates teams and integrates tools.”

Are you starting to manage these data disciplines more holistically?  If so, I encourage you to participate in TDWI’s survey.  We’d really love to understand better how you are thinking about things.  It just takes 10 minutes.

There’s been a lot of hoopla this week about Informatica 9, and rightfully so.  A lot of people at Informatica have been working on this release for a long time, and we’re all excited about the potential it has to help our customers get to the next level.  Informatica 9 can be used in many different ways to help organizations deliver more value from their data to the business.  But there are several business use cases which are really a sweet spot for Informatica 9, based on the traction we have seen already with real-world customers.

• Regulatory/compliance/financial reporting.  Informatica’s heritage is in data warehousing, which is a fundamental underpinning to reporting systems.  But even with all the great advances that both business intelligence and data integration technologies have achieved, CFOs are still challenged in many ways.  Hidden data quality issues put them at risk for non-compliance, leading to penalties, brand degradation, or even jail time.  Minor changes in data sources—say a business rule that has been changed or a format has been adjusted—if not handled correctly and quickly also can mean that reports are incomplete or erroneous.  And it simply takes too long for any new sources of relevant information to be incorporated into the reporting structure.  Informatica 9 can really help in these areas by making data quality issues much more visible, and by drastically reducing the amount of time it takes to accommodate changes in the data underlying the reports. [Read more]

In my last posting, I wrote about how we often talk about managing data as an asset, but that one of the major barriers to actually doing so is the difficulty in putting a monetary value on the data.

A somewhat more tangible, if no less complex issue, is that the processes and tools for managing data as an asset are often not in place. Data governance is often defined in terms of managing data as an asset, and this discipline, while still nascent, is evolving rapidly. Many companies have started to define and standardize on data governance processes, as well as formalize data governance roles such as data stewards. But we’re a long way from maturity here.

Moreover, the technology infrastructure that underpins these processes is still inadequate in most organizations. [Read more]

It’s pretty common for those of us in the data management world to talk about managing data as an asset, just as you manage assets like equipment and capital. One trite but telling mental test that I’ve seen many times goes something like this:

“In your office you have a rare antique desk, an expensive computer, and a 50 cent CD that has the only list of your top 500 customers and their purchase history. If there’s a fire, which do you save?”

The answer is meant to be obvious (the CD, duh), illustrating the enormous business value intrinsic to your data. And most of us nod our heads and say “yes, data is a critical asset, and we should manage it that way.” In fact, this concept of maximizing the value of data is core to our upcoming Informatica 9 launch.

But it’s easy to say and hard to do, not least because it is seemingly impossible to quantify the value of data. If you can’t put a specific dollar figure on it, how can you know how much you need to invest in managing it?
[Read more]

I assume anyone reading this blog is a firm believer in the value of data, specifically the value it provides to the business. But even though we take that as a matter of faith, it can still be difficult to articulate this notion to others, particularly in ways that don’t sound vague or clichéd.

When you talk in a positive sense about the value your data can drive, it pays to talk about concrete examples like:

• ACH Foods saved $3 million integrating an acquisition by streamlining the process of migrating data from the acquiree.
• GfK, a market research firm, diversifying its product range and reducing errors in the data it delivered to its clients by improving how they managed complex data and data quality.
• Oi, the leading telecom provider in Brazil, being able to introduce an innovative prepaid calling service plan because it was able to integrate data across its CRM, billing and in-house pre-paid systems.
• Electronic Arts, the gaming firm, saving millions in inventory and related costs through better demand forecasting, based on data they integrated across 22 systems.

[Read more]

In the current economic environment, where IT organizations are on shoestring budgets and every project requires a strong financial justification, Total Cost of Ownership (TCO ) has yet again become a key concern. Looking at TCO for data integration is no exception.

Most folks understand that TCO should look at both upfront and ongoing costs. And the technology/productivity angles are fairly obvious, even if they are not always easy to quantify—how much time and resource can a technology save both in upfront development and the downstream maintenance and administration. Technology-based factors such as ease of use, functional capabilities, and scalability/performance all fall into this equation. [Read more]