Tag Archives: CIO
- 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.
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.
When you talk to CIOs today about their business priorities, the top of their list is better connecting what IT is doing to business strategy. Or put another way, it is about establishing business/IT alignment. One area where CIOs need to make sure there is better alignment is enterprise analytics. CIOs that I have talk to share openly that business users are demanding the ability to reach their apps and data anywhere and on any device. For this reason, even though CIOs say they have interest in the mechanisms of data delivery–data integration, data cleanliness, data governance, data mastering, and even metadata management — they would not take a meeting on these topics. The reason is that CIOs say they would need to involve their business partner in these meetings. CIOs these days want you have to have a business value proposition. Given this, CIOs say that they would want to hear about what the business wants to hear about.
- Enabling new, valuable business insights out data to happen faster
- Enabling their businesses to compete with analytics
CIOs as an analytics proponent versus the analytics customer
So if the question is about competing with analytics, what role does the CIO have in setting the agenda here? Tom Davenport says that CIOs–as I heard in my own conversations with CIOs–have good intentions when it comes to the developing an enterprise information strategy. They can see the value of taking an enterprise versus a departmental view. Tom suggests, however, that CIOs should start by focusing upon the analytics that will matter most to the business. He says that IT organizations should, also, build an IT infrastructure capable of delivering the information and analytics that people across the enterprise need not just now but also in the future.
Tom says that IT organizations must resist the temptation to provide analytics as an add-on or a bolt-on basis for whatever transactions system have just been developed. As a product manager, I had a development team that preferred to add analytics by source rather than do the hard work of creating integrative measures that crossed sources. So I know this problem firsthand. Tom believes that IT needs to build a platform that can be standardized and integrate data from more than one source. This includes the ability to adapt as business needs and business strategies change.
Making this an Enterprise Analytics Capability
In the early stage for analytics, IT organizations need to focus more upon a self-service approach. But as the business matures at analytics, Tom says that IT needs to shift gears and become a proactive advocate and architect of change. Tom says that IT should be a part owner of the company’s analytical capabilities. IT managers, therefore, must understand and be able to articulate the potential for analytics being created at an enterprise level. At the same time, the IT staff–which often lacks the heavy mathematical backgrounds of analysts–needs to be able to interact with the analytics pros who use and consume the information that IT creates to build models. I had this dilemma first hand where my analytics modelers were disconnected from BI product developers. They were two different communities working on our project. And although some modelers can build apps or even a BI system, what excites them most in life is building new analytical models.
Talk the language of the business
Tom Davenport says that IT managers can make their own lives easier with the business and the with analysts by instead of discussing cloud computing, service oriented architecture, or even OLAP, discussing decision making, insights, and business performance. Meanwhile, Tom feels that the enterprise analytics journey starts with good, integrated data on transactions and business processes managed through enterprise applications like ERP and CRM Systems (Analytics at Work, Thomas Davenport, Harvard Business Review Press, page 51).
Focusing on the big questions and the right problems
Clearly driving the business to focus on the big questions and the right problems is critical. IT cannot do this but they can facilitate it. Why does it matter? An Accenture Study found that “companies that derived any real value from them (their analytics) had anticipated how to leverage the information to generate new insights to improve business performance. (“Using Enterprise Systems to Gain Uncommon Competitive Advantage, Accenture, page 3). This is critical and too few organizations succeed in doing it.
With this accomplished and to achieve the second goal, IT needs to be eliminating legacy BI systems and old spaghetti code as well as silo data marts. The goal should be to replace them with an enterprise analytics capability that answers the big questions. This requires standardization around an enterprise wide approach that ensures a consistent approach to data management and provides an integrated environment complete with data repositories/data lakes, analytical tools, presentation applications, and transformational tools. This investment should be focused on improving business processes or providing data needed for system of systems products. Tom says that IT’s job is to watch out for current and future users of information systems.
So the question is where is your IT organization at today? Clearly, it is important as well that IT measure enterprise analytic initiatives too. IT should measure adoption. IT should find out what is used or not they are used. I had a CIO once admit to me that he did not know whether currently supported data marts were being used or even still had value. It is important that we have these answers. Clearly, being close to the business customer from the start can limit what this CIO discussed.
Related Blogs and Links
Solution Brief: The Intelligent Data Platform
Author Twitter: @MylesSuer
Six ideas for CIOs in 2015 to put the innovation back in CIO
For most, the “I” in CIO stands for Information. But what about that other “I”, Innovation? For many IT organizations, 60-80% of IT spending continues to be tied up in keeping the IT lights on. But innovation matters more than ever to the business bottom line. According Geoffrey Moore, “without innovation, offerings become more and more like each other. They commoditize.” (“Dealing with Darwin”, Geoffrey Moore, page 1). Geoffrey goes on to say later in “Dealing with Darwin” that commoditization will over time drop business returns to “the cost of capital”. So clearly, this is a place that no CIO would want their enterprises to consciously go.
Given this, what is the role of the CIO in driving enterprise innovation? I believe that it is a significant one. Without question, technology investment has been a major driver of enterprise productivity gains. At the same time, IT investment has had a major role in improving business capabilities and the business value chains. And more recently, IT is even carving out a role in products themselves as part of the IoT. So how can CIOs help drive business innovation?
1) Get closer to your business customers. CIOs have said to me that their number one priority is connecting what the IT is doing to what the business is doing. Given this, CIOs should make it a real priority for their teams to get closer to the business this year. According to Kamalini Ramdas’ Article in Harvard Business Review, “to succeed at innovation, you need to have a culture in which everyone in the company is constantly scanning for ideas”.
2) Develop internal design partners. When I have started new businesses, I have always created a set of design partners to ensure that I built the right products. I tell my design partners to beat me up now rather than after I build the product. You need, as Kamalini Ramdas suggests, to harvest the best ideas of your corporate team just like I did with startups. You can start by focusing your attention upon the areas of distinctive capability—the places that give your firm its right to win.
3) Enabling your IT leaders and individual contributors to innovate. For many businesses, speed to market or speed of business processes can represent a competitive advantage. Foundationally to this are IT capabilities including up time, system performance, speed of project delivery, and the list goes on. Encouraging everyone on your team to drive superior operational capabilities can enable business competitive advantage. And one more thing, make sure to work with your business leaders to pass a portion of the business impact for improvements into a bonus for the entire enabling IT team. At Lincoln Electric, they used bonuses by team to continuously improve their products. This arch welding company shares the money saved from each process improvement with the entire team. They end up getting the best team and highest team longevity as teams work improves product quality and increases cost take out. According Kamalini, “in truly innovative culture, leaders need to imbue every employee with a clear vision and a sense of empowerment that helps them identify synergistic ideas and run with them” (“Build a Company Where Everyone’s Looking for New Ideas”, Harvard Business Review, page 1).
4) Architect for Innovation. As the velocity of change increases, businesses need IT organizations to be able to move more quickly. This requires an enterprise architecture built for agility. According to Jeanne Ross, the more agile companies have a high percentage of their core business processes digitized and they have as well standardized their technology architecture (Enterprise Architecture as Strategy, Jeanne Ross, page 12).
5) Look for disruptive innovations. I remember a professor of mine suggesting that we cannot predict the future when discussing futures research. But I believe that you can instead get closer to your customers than anyone else. CIOs should dedicate a non-trival portion of IT spend to germinating potentially disruptive ideas. They should use their design partners to select what gets early stage funding. Everyone here should act like a seed stage venture capitalist. You need to let people experiment. At the same time, design partners should set reasonable goals and actively measure performance toward goals.
6) Use analytics. Look at business analytics for areas of that could use IT’s help. Open up discussions with design partners for areas needing capability improvement. This is a great place to start. Look as well for where there are gaps in business delivery that could be drive better performance from further or improved digitization/automation. And once an innovation is initiated, analytics should actively ensure the management of the innovation’s delivery.
There is always more that you can do to innovate. The key thing is to get innovation front and center on the IT agenda. Actively sponsor it and most importantly empower the team to do remarkable things. And when this happens, reward the teams that made it happen.
Just exactly how do your move from a “Just a Bunch of Data” (JBOD) architecture to a coherent enterprise data architecture?
The white paper, “The Great Rethink: Building a Highly Responsive and Evolving Data Integration Architecture” by Claudia Imhoff and Joe McKendrick provides an interesting view of what such an architecture might look like. The paper describes how to move from ad hoc Data Integration to an Enterprise Data Architecture. The paper also describes an approach towards building architectural maturity and a next-generation enterprise data architecture that helps organizations to be more competitive.
Organizations that look to compete based on their data are searching for ways to design an architecture that:
- On-boards new data quickly
- Delivers clean and trustworthy data
- Delivers data at the speed required of the business
- Ensures that data is handled in secure way
- Is flexible enough to incorporate new data types and new technology
- Enables end user self-service
- Speeds up the speed of business value delivery for an organization
In my previous blog, Digital Strategy and Architecture, we discussed the demands that digital strategies are putting on enterprise data architecture in particular. Add to that the additional stress from business initiatives such as:
- Supporting new mobile applications
- Moving IT applications to the cloud – which significantly increases data management complexity
- Dealing with external data. One recent study estimates that a full 25% of the data being managed by the average organization is external data.
- Next-generation analytics and predictive analytics with Hadoop and No SQL
- Integrating analytics with applications
- Event-driven architectures and projects
- The list goes on…
The point here is that most people are unlikely to be funded to build an enterprise data architecture from scratch that can meet all these needs. A pragmatic approach would be to build out your future state architecture in each new strategic business initiative that is implemented. The real challenge of being an enterprise architect is ensuring that all of the new work does indeed add up to a coherent architecture as it gets implemented.
The “Great Rethink” white paper describes a practical approach to achieving an agile and responsive future state enterprise data architecture that will support your strategic business initiatives. It also describes a high level data integration architecture and the building blocks to achieving that architecture. This is highly recommended reading.
Also, you might recall that Informatica sponsored the Informatica Architect’s Challenge this year to design an enterprise-wide data architecture of the future. The contest has closed and we have a winner. See the site for details, Informatica Architect Challenge .
We are way past the point where the architecture needs to be aligned with business goals and value delivery. That is necessary but no longer sufficient. We are now at the point where architecture needs to be central to the creation of an organization’s strategy process. Not to get hyperbolic, but anything less is risky for your career.
The Challenge: Digitization
I just came back from the MIT Center for Information Systems Research (CISR) research forum. One of the leading topics was digitization and how every business is becoming digitized. To those in the High Tech industry, this may be an “of course” topic, but to most other industries it is a wrenching change. Even those who are comfortable with the idea of digitization risk taking this too lightly.
The fact is that most products and services will have a digital component to them in the near future and an increasing number of products and services will be entirely digital. The fact is that digitization and the technologies that enable it are going to bring about a period of increased disruption. This will mean:
- New competitors. Examples: autonomous cars, sports equipment with embedded sensors that provide feedback, personal assistant fully capable of making decisions and taking action. Gartner is predicting that almost everything over $100 will have a sensor by the turn of the decade.
- New competitors jumping across industry boundaries. Examples: Apple iTunes and Google cars to name a few.
Why Architects Are Important
Architects are in a unique position to not only understand the technology trends driving this disruption, but they also to know how to leverage these trends to drive business value within their organizations. The very best architects are going to be those who are deeply involved in defining the organization strategy, not just figuring out how to implement it.
Evidence of Change
Many architects and CIOs currently report very little interest from upper management in IT. That is about to change, and quickly. At the MIT CISR forum I attended last week, they presented research around this area that is very telling:
- Half of Board of Directors members believe that their board’s ability to oversee the strategic use of IT is “less than effective.”
- 26% of Boards hired consultants to evaluate major projects or the IT unit.
- 60% of Boards want to spend more time on digital issues next year.
- Board members estimate that 32% of their company’s revenues are under threat from digital disruption.
That last bullet is the really interesting piece of research. 32% is a huge impact.
The Role of Data in Digitization
Digitization by its very nature is all about data. The winners in this space will be those that can manage and deliver relevant data the quickest. The question for architects is this: Do you have the architecture and agility to take advantage of the coming disruptions and opportunities? Are you actively advising your organization on how to leverage them? As we have documented in many previous blogs, many organizations are poorly positioned to manage their data as a discoverable and easily sharable asset. This will essential for:
- Delivering business initiatives and showing value faster (agility).
- Enabling business self-service so that IT is not the bottleneck in new analyses and decisions.
All of this requires new thinking around enterprise data architecture. For fresh thinking on this subject see Thinking “Data First” to Drive Business Value.
CIOs and CFOs both dig data security
In my discussions with CIOs over the last couple of months, I asked them about the importance of a series of topics. All of them placed data security at the top of their IT priority list. Even their CFO counterparts, with whom they do not always see eye to eye, said they were very concerned about the business risk for corporate data. These CFOs said that they touch, as a part of owning business risk, security — especially from hacking. One CFO said that he worried, as well, about the impact of data security for compliance issues, including HIPAA and SOX. Another said this: “The security of data is becoming more and more important. The auditors are going after this. CFOs, for this reason, are really worried about getting hacked. This is a whole new direction, but some of the highly publicized recent hacks have scared a lot of folks and they combined represent to many of us a watershed event.”
According to David W. Owens the editor of CFO Magazine, even if you are using “secure” storage, such as internal drives and private clouds, the access to these areas can be anything but secure. Practically any employee can be carrying around sensitive financial and performance data in his or her pocket, at any time.” Obviously, new forms of data access have created new forms of data risk.
Are some retailers really leaving the keys in the ignition?
Given the like mind set from CIOs and CFOs, I was shocked to learn that some of the recently hacked retailers had been using outdated security software, which may have given hackers easier access company payment data systems. Most amazingly, some retailers had not even encrypted their customer payment data. Because of this, hackers were able to hide on the network for months and steal payment data, as customers continued to use their credit cards at the company’s point of sale locations.
Why weren’t these transactions encrypted or masked? In my 1998 financial information start-up, we encrypted our databases to protect against hacks of our customers’ personal financial data. One answer came from a discussion with a Fortune 100 Insurance CIO. This CIO said “CIO’s/CTO’s/CISO’s struggle with selling the value of these investment because the C Suite is only interested in hearing about investments with a direct impact on business outcomes and benefits”.
Enterprise security drives enterprise brand today
So how should leaders better argue the business case for security investments? I want to suggest that the value of IT is its “brand promise”. For retailers, in particular, if a past purchase decision creates a perceived personal data security risk, IT becomes a liability to their corporations brand equity and potentially creates a negative impact on future sales. Increasingly how these factors are managed either supports or not the value of a company’s brand.
My message is this: Spend whatever it takes to protect your brand equity; Otherwise a security issue will become a revenue issue.
In sum, this means organizations that want to differentiate themselves and avoid becoming a brand liability need to further invest in their data centric security strategy and of course, encryption. The game is no longer just about securing particular applications. IT organizations need to take a data centric approach to securing customer data and other types of enterprise data. Enterprise level data governance rules needs to be a requirement. A data centric approach can mitigate business risk by helping organizations to understand where sensitive data is and to protect it in motion and at rest.
Solutions: Enterprise Level Data Security
The State of Data Centric Security
How Is The CIO Role Starting To Change?
The CFO viewpoint on data
CFOs discuss their technology priorities
The Number 1 Enterprise Priority
Information Week reported last week upon the latest IT Trends Study. Once again this study had IT-business alignment as the No. 1 priority for enterprises. The article’s author even exclaimed within his piece isn’t this topic becoming “a bit “passé”. We have confirmed in our interviews of CIOs that they place connecting what IT is doing to business strategy higher than things like technical orchestration and overall process excellence. Hunter and Westerman say in The Real Value of IT that doing IT-Business Alignment well involves “showing the value of IT as an investment in business performance—operationally and financially”.
CIOs Need The Businesses Help With IT Demand Management
One CIO that we talked to suggested that accomplishing what Hunter and Westerman suggest starts with better IT demand management. “IT leaders increasingly need to get control over their IT demand management. After all, they have limited dollars, limited space, and limited people. They need to partner with the business to get the prioritization done”. This CIO suggests it is especially important to get this right these days because of the pace at which the tech landscape is changing.
The explosion of technologies is certainly making the need for IT-business alignment even more critical. This CIO has Mobile, Cloud, Social, and Big Data all key priorities at the same time. How does one select between them without having their customers in the room with you?
Another CIO suggests that IT-business alignment is increasingly about three things:
- Getting the CFO to understand technology is not a cost center
- Getting the business to understand that IT isn’t separate
- Getting business leaders to understand technology better. “I want business leaders to start asking for digital services that support their product and service offerings”.
A New Type Of CIO Needed?
Clearly, if CFOs are part of the alignment equation, CIOs should be looking at their tech priority list carefully. Some CIOs suggest that the emphasis on IT-business alignment brings to the forefront skills like collaboration and teamwork. And this change may require a different kind of CIO. The CIO role today is clearly becoming more about understanding the business than understanding technology. It is becoming more about business alignment than technology alignment. This means the biggest value added from the CIO still will be that they can align business needs with the technology fabric required to deliver it.
Presentations Need To Be About A Business Need
Several CIOs, in fact told me that they will not take a vendor presentation on a purely techie topic anymore. If they take a meeting from a vendor, they will almost always involve their business partner. They won’t do it alone. Given this, the topic needs to change. “Business partners will be suspicious of a meeting request filled with technical terms. They do not want a solution looking for a problem. They want to be looking for a solution to their problem”. Given this, to involve the CIO today, you need to have a business value proposition.
Even COBIT 5 Suggests That Alignment Matters
Even COBIT 5 in fact suggests says that IT organizations should be measured by their alignment of IT and business strategy. COBIT 5 even provides multiple KPIs that dig in on the topic. Given this, it may be “a bit “passé” but it is core to creating a successful IT organization for today and for the future.
In our interviews of CIOs, they have told us that connecting what IT is doing to business strategy has become a higher priority than even things like improving technical orchestration and overall process excellence. Being CIO today has become much more about business alignment than technology alignment. This means that CIOs and their teams need to understand their firm’s business problems almost as well as they understand their implementations of information technology. One area where CIOs say they are trying to do a better job of alignment is in working with their firm’s Chief Marketing Officer. Confirming this is a recent CIO Magazine Survey that found initiatives around revenue, customer acquisition, and customer retention receiving top IT priority these days.
Geiger IT solves a persistent business problem by aligning with the marketing team
One CIO that that has really taken this to heart is the Dale Denham who is the CIO at Geiger. Dale and his IT team decided that they needed to get closer to their firm’s marketing organization and by doing so was able to go after a persistent business problem and change the IT-business relationship in the process.
At Geiger, their marketing team was limited in their ability to add new products. Competitively, the marketing team needed to improve their product selection. However, they were hitting the wall in updating and maintaining their product mix. Geiger provides its customers with more than 5,000 products, each having as many as 350 variations. This translates to a 175,000 product permutations to price and manage. At the same time, Geiger sells its products through 500 Sales Partners—this, in turn, can create an additional layer of permutation.
The source of this business problem was that Geiger’s ERP and Website systems that required the users to manipulate multiple screens to get to product data and product codes into the system. The system was difficult enough that it took about six weeks to train someone to input product data. Think about the time needed to then do this this across all products, product permutations, and channel partners.
To fix things, Dale and his team partnered with the business. Doing it together rather than separately enabled the IT organization and the business to collaborate and to build a better and more permanent partnership. Dale says, “We have really enjoyed implementing the solution, because the business units are now working very closely with IT”. Dale claims as well the relationship with their business units has gotten to be a very solid, trusting relationship with them, and very collaborative. They have learned to trust IT’s input, and IT has learned a lot from the business units about how they operate and like to operate.”
The impact of working together is clear
The solution that the business and IT derived cut the time to train people in half. In fact, Dale says that new system users are relatively productive within a week, because the solution is faster and easier to use. Dale says that the time per product entry went down from an hour and half to thirty minutes. For this reason, marketing teams are more efficient. Overall, it reduced the process from two months to one week for them to update the customer facing website. By automating the process, they were able to speed up marketing processes. This means marketing can now add and extend to the existing marketing mix and increase customer satisfaction and potential increase customer upsell and cross sell.
The historical the process created a lot of efficiencies for marketing. Marketing staff is now much more focused on what they’re doing from day to day. They have the ability to update products faster from prices and this has stabilized business margins. At the same time, marketing was able to reduce invoice discrepancies. Given all of this, marketing staff is more engaged that they are able to get the job done in a timely manner and to be able to get to market faster with the products.
The solution took the data entry process down from ninety minutes to thirty minutes. And now with this increased efficiency, the marketing staff has focused more of its time on the quality of copy for the product and on getting the graphics of the images up to websites. This has improved overall customer experience. And of course they were able to expand their product offering. They now have three times the throughput capacity, which is what is going to allow Geiger to grow in the future as it provides more product options to customers.
Already they have found that customers are happier with the immediate larger breadth of product to choose from. Lastly, their leadership team is happier because they are able to get more opportunities to grow the business. And this gives them much more ability to satisfy customers and provide for the additional growth they need in the future.
Clearly business and IT alignment is all the rage today. But it starts and ends with a team that solves meaningful business problems. Geiger is a great of example of how to do this right. If you want to learn more about what Geiger did and how they solved their marketing problems, please click this hyperlink.
Recently, I had the opportunity to talk to a number of CFOs about their technology priorities. These discussions represent an opportunity for CIOs to hear what their most critical stakeholder considers important. The CFOs did not hesitate or need to think much about this question. They said three things make their priority list. They are better financial system reliability, better application integration, and better data security and governance. The top two match well with a recent KPMG study which found the biggest improvement finance executives want to see—cited by 91% of survey respondents—is in the quality of financial and performance insight obtained from the data they produce, followed closely by the finance and accounting organization’s ability to proactively analyze that information before it is stale or out of date”
CFOs want to know that their systems work and are reliable. They want the data collected from their systems to be analyzed in a timely fashion. Importantly, CFOs say they are worried not only about the timeliness of accounting and financial data. This is because they increasingly need to manage upward with information. For this reason, they want timely, accurate information produced for financial and business decision makers. Their goal is to drive out better enterprise decision making.
In manufacturing, for example, CFOs say they want data to span from the manufacturing systems to the distribution system. They want to be able to push a button and get a report. These CFOs complain today about the need to manually massage and integrate data from system after system before they get what they and their business decision makers want and need.
CFOs really feel the pain of systems not talking to each other. CFOs know firsthand that they have “disparate systems” and that too much manual integration is going on. For them, they see firsthand the difficulties in connecting data from the frontend to backend systems. They personally feel the large number of manual steps required to pull data. They want their consolidation of account information to be less manual and to be more timely. One CFO said that “he wants the integration of the right systems to provide the right information to be done so they have the right information to manage and make decisions at the right time”.
Data Security and Governance
CFOs, at the same time, say they have become more worried about data security and governance. Even though CFOs believe that security is the job of the CIO and their CISO, they have an important role to play in data governance. CFOs say they are really worried about getting hacked. One CFO told me that he needs to know that systems are always working properly. Security of data matters today to CFOs for two reasons. First, data has a clear material impact. Just take a look at the out of pocket and revenue losses coming from the breach at Target. Second, CFOs, which were already being audited for technology and system compliance, feel that their audit firms will be obligated to extend what they were doing in security and governance and go as a part of regular compliance audits. One CFO put it this way. “This is a whole new direction for us. Target scared a lot of folks and will be to many respects a watershed event for CFOs”.
So the message here is that CFOs prioritize three technology objectives for their CIOs– better IT reliability, better application integration, and improved data security and governance. Each of these represents an opportunity to make the CFOs life easier but more important to enable them to take on a more strategic role. The CFOs, that we talked to, want to become one of the top three decision makers in the enterprise. Fixing these things for CFOs will enable CIOs to build a closer CFO and business relationships.
Solution Brief: The Intelligent Data Platform
Solution Brief: Secure at Source
This got me thinking: What is the biggest bottleneck in the delivery of business value today? I know I look at things from a data perspective, but data is the biggest bottleneck. Consider this prediction from Gartner:
“Gartner predicts organizations will spend one-third more on app integration in 2016 than they did in 2013. What’s more, by 2018, more than half the cost of implementing new large systems will be spent on integration. “
When we talk about application integration, we’re talking about moving data, synchronizing data, cleansing, data, transforming data, testing data. The question for architects and senior management is this: Do you have the Data Foundation for Execution you need to drive the business results you require to compete? The answer, unfortunately, for most companies is; No.
All too often data management is an add-on to larger application-based projects. The result is unconnected and non-interoperable islands of data across the organization. That simply is not going to work in the coming competitive environment. Here are a couple of quick examples:
- Many companies are looking to compete on their use of analytics. That requires collecting, managing, and analyzing data from multiple internal and external sources.
- Many companies are focusing on a better customer experience to drive their business. This again requires data from many internal sources, plus social, mobile and location-based data to be effective.
When I talk to architects about the business risks of not having a shared data architecture, and common tools and practices for enterprise data management, they “get” the problem. So why aren’t they addressing it? The issue is that they find that they are only funded to do the project they are working on and are dealing with very demanding timeframe requirements. They have no funding or mandate to solve the larger enterprise data management problem, which is getting more complex and brittle with each new un-connected project or initiative that is added to the pile.
Studies such as “The Data Directive” by The Economist show that organizations that actively manage their data are more successful. But, if that is the desired future state, how do you get there?
Changing an organization to look at data as the fuel that drives strategy takes hard work and leadership. It also takes a strong enterprise data architecture vision and strategy. For fresh thinking on the subject of building a data foundation for execution, see “Think Data-First to Drive Business Value” from Informatica.
* By the way, Informatica is proud to announce that we are now a sponsor of the MIT Center for Information Systems Research.