The IT Tipping Point: Cloudy with a chance of Big Data
July 30, 2013
Gartner (Laura McLellan, Vice President Marketing Strategies) has predicted that by 2017 the CMO will spend more on IT than the CIO. Has IT’s time passed?
I have spoken to many people that have expressed concern (some overtly and some subtly) over the role of IT as companies move to adopt cloud services. For those with a vested interest in the continued success of IT this is a valid concern – cloud will be and is today disrupting the status quo. However, if you broaden your view the consumption of cloud services can be viewed as a necessity that allows IT to refocus resources on services that are directly connected to delivering the capabilities your company requires for future success. The real question is “Is IT willing to deliver the innovation required to capitalize on the opportunity?”.
“Operational efficiency is now relegated to table stakes. You still need to deliver on it to stay in business but it doesn’t drive competitive advantage.”
If we look at the significant projects that made our organizations more efficient (ERP, CRM, etc.) they generally standardized and improved business processes allowing the business to deliver better results. These improvements initially provided a competitive advantage but today the playing field has been leveled. Virtually all competitors are using the same (or similar) software packages to implement best practices. Operational efficiency is unlikely to provide competitive differentiation in the market and as everyone has implemented the same best practices they are good candidates to be deployed as a cloud service. To some, this validates their fears of the decline of IT but it also provides tremendous opportunity. To find the opportunity you need to ask yourself the question “If every organization has implemented the same set of best practices how can organizations differentiate themselves in a competitive market?”.
Operational efficiency is now relegated to table stakes. You still need to deliver on it to stay in business but it doesn’t drive competitive advantage. The next phase will be to differentiate by making better business decisions. Decisions based on intuition or gut feel are just as often poor decisions as they are good ones. Consistently making great decisions is what is going to separate the superior organizations from the mediocre. To do this involves making informed defendable decisions based on all available data to understand what options are available, the likelihood of success with each option and the risk factors that could alter the outcome. This approach has been branded Big Data. (A name I feel does a disservice as it is not representative of all the ways organizations may use data for decision making. Big Data can be small.)
“Organizations with a strong enterprise architecture team should already have researched big data technologies and stay abreast of the continued innovation. “
For IT to increase its relevance it must overcome its reputation (valid or not) of slowing down the process and making it more difficult to achieve success. Speed and agility are valued and IT must be perceived as a group that can accelerate the process and deliver results. Today, business groups outside of IT are being targeted directly by product and services vendors offering “big data” solutions. The value proposition is to deliver what existing corporate IT systems have been unable to provide. Generally, these business groups are embracing Big Data solutions to:
- Provide previously unknown insights hidden in the data
- Reduce decision latency
- Identify new products/services to monetize data assets
Although the majority of use cases are directly targeted toward a business unit outside of IT (such as marketing) there are use cases where IT is the beneficiary of big data applications (eg. HP Operations Analytics).
From an IT perspective, Big Data usually means evaluating and adopting new technologies. IT Organizations with a strong enterprise architecture team should already have researched big data technologies and stay abreast of the continued innovation. Gaining further experience by using big data technologies within IT or participating in a PoC/pilot (provided there is no perception of slowing down the project) can create valuable expertise to draw upon to support business groups. Repurposing existing legacy technologies tends to fail for one of the following reasons:
- The current technology does not deliver the capability required to perform the analysis or operate on the diversity of the data.
- The current technology cannot complete the analysis quick enough.
- Scaling the current technology is cost prohibitive.
“…every vendor seems to be branding whatever solution they have as Big Data to get attention.”
Just like the cloud domain, every vendor seems to be branding whatever solution they have as Big Data to get attention. While this approach may be successful the unfortunate reality is that platforms that were not purpose built for big data tend to be more costly, less performant and companies with these systems find that analysis at scale can be impossible or unaffordable in these legacy systems. Big Data platforms (eg. HP HAVEn) are purpose built for big data. They tend to follow a federated model integrating capabilities as required to ingest, store, process and analyze the data.
“Focus investment in areas that help your organization differentiate itself against its competitors.”
As organizations embark with big data one of the challenges can be finding people with the right mix of skills. The individual needs to have an understanding of the business, the technology and the available data. They need skills in statistics/analytics but also be creative enough to explore new, different and unorthodox ideas. As you look for these individuals turning to outside talent is an option but internal candidates will likely have knowledge of the business that could take time to develop. In my travels I have met some great candidates for this type of role within IT. If a job rotation through marketing or another business group can be arranged they become even stronger candidates and can help improve IT’s brand elsewhere in the company.
Striving to achieve competitive advantage is becoming more not less intense. Under the right leadership IT has a great future. As the business shifts towards delivering competitive advantage through improved knowledge and better decisions, IT will need to evolve to maintain relevance and contribute significant value back to the business. IT must be willing to let go of services that no longer provide differentiation. If these services are still required to run the business, explore alternate delivery models. Focus investment in areas that help your organization differentiate itself against its competitors. Where is your IT organization focused?