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.

The cover story on the March 8th issue of Computerworld is “Swinging Toward Centralization”. It talks about the pendulum moving toward IT consolidation as organizations strive to save money and improve controls. This article is not alone. A growing number of analysts are talking about consolidation, Lean IT practices, and taking “a production line approach to integration”.  When you combine all this rhetoric with the industry fundamentals, the stage is set for 2010 to The Year of the ICC. [Read more]

Good architecture is the foundation required for agile systems that are responsive to business needs. We see that with SOA, which has been missing a vital piece of its architectural approach – from the data. Since it came about in its current form in the early-to-mid 2000s, service-orientation (mainly focused on applications) has existed in a separate world from data management.

Problem is, an SOA-enabled infrastructure with bad data flowing through it can be useless and even dangerous. One commentator even compared SOA to a mosquito that can deliver payloads of bad data (”viral data”) at lightning speed all across the enterprise — pandemic style — before it can be stopped. [Read more]

Loraine Lawson did a great job covering the topic of the integration challenges around the cloud and virtualization. She reports that “…a recent Internet Evolution column [by David Vellante] looks more broadly at the cloud integration question and concludes that insufficient integration is holding up both cloud computing and virtualization.”

In fact, what currently limits the number of cloud deployments is the lack of a clear understanding of data integration in the context of cloud computing. This is a rather easy problem to solve, but it’s often an afterthought.

The core issue is that cloud computing providers, other than Salesforce.com, don’t consider integration. Perhaps they are thinking, “If you use our cloud, then there is no reason to sync your data back to your enterprise. After all, we’re the final destination for your enterprise data, right?” Wrong. [Read more]

While the market is showing signs of recovery from the "Great Recession" most state budgets have been feeling the squeeze from the lag in recovery. In a recent article titled The Sorry State of Finances, Liam Denning explained that, "55% of state revenue, before federal transfers, comes from personal and corporate income tax." Denning also stated that, "the first three quarters of 2009 were the worst for state tax since at least 1963."

There is an apparent lag between recovery in the private sector and a state receiving tax revenue. So what can states do about this problem while they suffer in the red? Mr. Denning said, "Since states can't run general funding deficits, closing gaps mean raising taxes, cutting services and resorting to one-time measures." Mr. Denning's list of solutions is certainly accurate, but does it include all options that states have? What about employing new technology to discover fraud or recover uncollected revenue? [Read more]

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]

This is the last of the Data as an Asset series and what better way to wrap up the theme than with a view to the future. As stated by Thomas Redman, author of Data Driven, “Your company's data is a key business asset, and you need to manage it aggressively and professionally.” The future vision then is around Agile Data-Driven Enterprises. [Read more]

Two of the more common questions that arise when trying to effectively deploy Data Governance are; "Where do I begin?" and "What business areas should I include?".  If you start too narrowly, the value and credibility of the effort is questioned.   Be too aggressive, and delivery risk and scalability become a problem.  As usual, success comes down to defining and managing scope.   However, more times than not it is prudent to err on the small side, and here's why… [Read more]

2009 was a banner year for Informatica's OEM business. We grew the number of ISVs (Software Companies), BPOs (Business Process Outsourcers) and SaaS/Cloud providers who use the Informatica platform as part of/with their offerings by 24 new partners. What was really interesting throughout 2009 was the variety of use cases across the spectrum of new partners addressed by various platform capabilities. You can read about this breadth and more details on specific examples in "2009 OEM Momentum".

For software, application or service providers faced with data acquisition, data conversion, data quality, data exchange, or other related challenges in the cloud or on premise, using the Informatica platform can alleviate that pain and allow them to focus on their core business.

With the delivery of Informatica 9 and the acquisition of Siperian, I expect that variety and growth to continue in 2010!

Continuing with the Data as Asset series, in this posting I explore the negative side and what can happen when data becomes a liability. Physical assets such as buildings, equipment, or even money, can become a liability if not managed properly; buildings can become unsafe to work in, machinery can be dangerous to operate, and business investments can turn into money-sinks. Similarly, data and information systems can also be assets that provide economic value to the enterprise or they can be liabilities that destroy value or put the business at risk if not managed well. Here are three common scenarios. [Read more]