BI and big data analytics Force an Overdue Reckoning Between IT and Business Interests

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Transcript of a Briefings Direct podcast on the need to solidly align business and IT goals and bring further collaboration on innovation within the enterprise.

Transcript of a Briefings Direct podcast on the need to solidly align business and IT goals and bring further collaboration on innovation within the enterprise.

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  • 1. BI and Big Data Analytics Force an Overdue Reckoning Between IT and Business Interests Transcript of a Briefings Direct podcast on the need to solidly align business and IT goals and bring further collaboration on innovation within the enterprise. Listen to the podcast. Find it on iTunes. Sponsor: Dell Software Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect. Today, we present a sponsored podcast discussion on how big data and business intelligence (BI) trends are hastening a breach between enterprise IT groups and business units. We'll examine how a traditional ebb and flow between IT centralization and decentralization are now swinging in the direction of business groups and even shadow IT. This runs the risk of neglecting essential management security and scalability requirements. Our discussion now will focus on how big data and analytics should actually force more collaboration and lifecycle-based relationships among and between business and IT groups. For those organizations, where innovation is being divorced from IT discipline, we'll explore ways that a comprehensive and virtuous adoption of rigorous and protected data insights can both make the business stronger and make IT more valued. Here now to share his insights such as gaining sustainable, competitive advantage, using big data strategically, among all aspects of an enterprise, we’re joined by John Whittaker, Senior Director of Marketing for Dell Software's Information Management Solutions Group. Welcome, John. John Whittaker: Thank you very much, Dana. I’m looking forward to having this conversation and sharing a little bit with your audience about how we at Dell Software look at this particular problem. I’ll offer some suggestions about how we might be able to implement big data and gain lasting sustainable advantage with the solutions that exist today, but doing so in a manner that’s going to deliver long-term success. Gardner: John, we seem to go back and forth between resources in organizations being tightly controlled and governed by IT and then resources and control resting largely with the line of business or even, as I mentioned, a shadow IT group of some sort. So over the past 20 or more years, why has this problem been so difficult to overcome? Why is it persistent? Why do we keep going back and forth? Whittaker: That’s an interesting question, and I agree. I've been in IT for longer than 20 years and certainly in your study of history you can see that this ebb and flow of centralized management to gain some constraints or some controls in governance and security has been one
  • 2. of the primary motivators of IT. It’s one of the big benefits they provide, but in the backdrop, you have lines of business that want to innovate and want to go in new directions. Behind all of these things occurring, you have these megatrends that show up, these new technology innovations and these new approaches. There periodically seems to be times when the innovation cycle is really an arc. We’re entering one of those times right now with big data and the advent of analytics, and it’s driving lines of business to push into these new technologies, and maybe  in ways that IT isn’t ready for just yet. This, as you mentioned, has been going on for some time. The last iteration where this occurred was back in the ’90s when e-commerce and the Web captured the imagination of business. We saw a lot of similarities to what's occurring today. Big-data push It ultimately caused some problems back in the ’90s around e-commerce and leveraging this great new innovation of the Internet, but doing it in a way that was more decentralized. It was a little bit more of the Wild West-based approach and ultimately led to some pretty significant issues that I think we are going to see out of the big data and analytics push that’s occurring right now. Gardner: I suppose to be fair to each constituency here, it’s the job of IT to be cautious and to try to dot all the i’s and cross the t’s. There were a lot of people in 1996-97 who didn’t necessarily think the Internet was going to be that big of a thing, and it seemed to have lots of risk associated with it. So, I suppose due diligence needed to be brought to bear. On the other hand if the businesses didn’t recognize that this could be a huge opportunity and we needed to take those risks, create a website, and enter into a direct dialogue with customers to a new channel, they would have missed the big opportunity. So these are sort of natural roles, but they can’t be too brittle. Whittaker: You’re absolutely right. At their core, both groups had, and have, good motivations. IT lives in a world of constraints, of governance, security, and of needing to deliver something that’s going to be stable, that’s going to scale, that’s going to be secure, and that’s not going break governance. Those are laudable goals to have in mind. From the line-of-business perspective, the business wants to innovate and doesn’t want to be outmoded by its competitors. They rightfully see that all these great innovations are coming, and analysts, pundits, and experts are talking about how this is going to make a huge difference for businesses.
  • 3. So they inevitably want to embrace those, and you have this cognitive dissonance occurring between the IT goals around constraints and the desire to keep things running in a clean and efficient manner. IT is seeing this new technology and saying, “Hold on. We don’t necessarily want to jump into this. This is going to break our model.” Ultimately, IT gets to a point where maybe they suggest we shouldn’t do it or we should push it off for some time. That’s where the chasm between the two gets started. From the business perspective, the answer “no” is unacceptable, if they feel that’s what they need to do to achieve success in business. They own the P&L. That’s where these problems come from. Nobody in either group is trying to harm the business or anything close to it. They just have different motivations and perspectives on how to approach something, and when one gets wildly far apart from the other, that’s where these problems tend to occur. Again, when these big innovation cycles happen, you’re more likely to see a lot of these problems start to occur. I definitely remember back in ’96-’97. We didn’t call it shadow IT at the time, but you saw ITlike personnel being hired into functional business areas to institute these new technologies, and that ultimately led to a pretty serious hangover at the end of that innovation cycle. Gardner: What’s the risk of ignoring IT, doing an end run around them, or downplaying the role? What form does it take? On their own Whittaker: Ignoring IT can have some pretty serious problems. It all starts with the fact that, and by and large, businesses can embrace these new technologies without the aid of IT.  Cloudbased implementations have made it possible for lines of business to rapidly deploy some of these new big data technologies, and you have vendors in some cases telling them they don’t need IT’s help. So it’s not all that difficult for lines of business to go out on their own and implement a big data technology. But they don’t typically have the discipline to apply across-the-board governance capabilities and discipline into their deployment and that leads to potential issues with regulatory requirements. It also leads to security issues, and ultimately can lead to problems where you have seriously bad data management issues. You have data sunk in silos, and maybe the CEO wants to know how much business we’re doing with x, y, and z. No one can deliver that, because we call x, y, and z, something in one system, a different name in another system, and a different name in the third system. Trying to pull that data together becomes really difficult. When you have lines of business independently operating disparate solutions, those core governance issues tend to break down. Additionally, although they are great at spotting innovation opportunities, line of business people are not necessarily in the business of building scalable, secure, stable environments. That’s not
  • 4. the core of, say, marketing. They need to understand how the technology can be leveraged, but maintaining and managing it is not core to their charter. It tends to be ignored. We saw in the early 2000s as the last innovation’s hangover started to occur. We saw people discovering that their systems were not scalable, that they weren’t secure, and that they were unstable because they didn’t have somebody there doing the basic care and feeding that is core to IT. That can lead to some very substantial cost. The cost could be enormous and totally unbound if you start talking about security issues that come from a lack of discipline applied at a governance level. Gardner: John, it strikes me that there are some examples within IT that help understand this potential problem and even grab some remediation, and that’s in software development. We’ve seen the complexity in groups working without a lot of coordination and shared process insights and have run aground. For many years, we saw a very high failure rate among software development projects, but more recently, we’ve seen improvements -- agile, scrum, opening up the process, small iterative steps that then revert back to an opportunity to take stock and know what everyone is doing, checking in, checking out with centralization but without stifling innovation. Is there really a lesson here in what’s happened within software development that could be brought to the whole organization? Whittaker: Absolutely. In fact, within Dell Software itself we embrace agile and use scrum internally. There are a lot of lessons that can be learned from the concept of working closely together, iterating rapidly, and being open to innovation and the idea that changes occur. Particularly in these major innovation cycles, it’s important to go with the flow and implement some of these new technologies and new capabilities early, so you can have that brain trust built internally among the broad team. You don’t want IT to hold the reins entirely, and at the same time, you don’t want line of business do it. We really need to break that model, that back and forth, centralization-decentralization swing that keeps occurring. We need to get to a point where we really are partnering and have good collaboration, where innovation can be embraced and adopted, and the business can meet its goals. But it has to be done in a way that IT can implement sound governance and implement solutions that can scale, are stable, are reliable, and are going to lead to long-term success. Back-and-forth We’ve got to get out of these back-and-forth cycles that occur or we’re going to continue to have these problems. As innovations occur more rapidly, you’re going to have more and more problems like these occurring if you don’t find a way to get IT and line-of-business motivations and interests allied.
  • 5. Gardner: What’s different this time, John? Are the stakes higher because we’re talking about data analysis? That’s basically intelligence about what’s going on within your markets, your organization, your processes, your supply chain, your ecosystem, all of which would have a bearing. We have the ability now to tackle massive amounts of data very rapidly, but if we don’t bring this together holistically, it seems as if there is a larger risk. I’m thinking about a competitive risk. Others that do this well could enter your market and really disrupt. Whittaker: You’re absolutely right. There’s great potential benefit that organizations receive or can get out of leveraging big data and analytics, that of being able to determine predictively what is going to occur in their business and what are the most efficient routes to market and what areas of improvements can occur. The businesses that leverage this are going to outmode, outperform, and ultimately win in the markets currently dominated by organizations who aren’t paying attention and who aren’t implementing solutions today. They’re getting a little bit ahead of this cycle so that they are ready and are able to be successful down the road. We’re really moving into an era where the context of what’s happening is critically important. A data-driven management model is going to be embraced and it’s ultimately going to lead to more successful organizations. Companies and organizations that embrace this today are going to be the winners tomorrow. If you’re ignoring this or putting this off, you’re really taking a tremendous risk, because this next iteration of innovation that’s occurring around analytics applies to large data sources. It’s being able to build the correlations and determine that this is a more efficient approach, or conversely, that we have a problem with this outlier that’s going to give us issues down the road. If you’re not doing that as an organization, you really are running a pretty tremendous risk that somebody else is going to walk in and be able to make smarter decisions, faster. Gardner: At the same time, your customers are gaining insights into how to procure all the better and so any rewards that might be out there, if you are in a sales role of any kind, would become much more apparent. Whittaker: That’s definitely true as well. The construct and the conversation has really shifted. With the advent of social media and the pace at which information is shared and opinions are made, it’s no longer the company that is the primary voice about its products and its capabilities or its positions and point of views.
  • 6. Customers more empowered It needs to have those. It needs to get them out. It needs to push them. But in this new world we live in, the customers are so much more empowered than they have ever been before, and it should be a good thing. For companies that are delivering great products and solving real problems for their customers, this should be great news. If you’re not listening to what your customers are saying in social media and if you’re not paying attention to the ongoing story line and conversation of your firm in the social sphere, you’re really putting yourself at risk. You’re missing out on a tremendous opportunity to engage with your customers in a new, interesting, and very useful way. That’s a lot of what we built. We have a lot of capabilities here at Dell Software around data management, data integration, and data analysis. On the analysis side, we spend a great deal of time with products like Kitenga and our social networking analytics platforms to do that semantic analysis and look into that form of big data. But big data is more than just social. It’s also sensor data. The iterative thing is another area where businesses should be innovating and organizations should be pushing to take advantage of it. That’s where line of business should be saying, “We need to get out into this area, or if we don’t, we’re going to be outmoded by our competitors.” And IT should be encouraging it. They should be pushing for more innovation, bringing new ideas, and being a real partner and collaborator at the table within the business and organization. That’s the right way to do this. Gardner: Otherwise, we run the risk of peeling back an onion only to find other layers unconnected to one another. We don’t get that one view of the customer, that one view of the patient, or that one view of an extended business process. We just create more silos of data. Centralized IT organizations perhaps are better than almost anyone in understanding how to connect those, rather than keep them spinning off on their own. Whittaker: Absolutely. And IT itself should be applying some of these technologies. In fairness to line of business, there exists a bit of a crisis of confidence in IT, and there’s really no better way to push against that or fight against that then to be able to run analytics on the solutions you’re providing. How well is IT performing? Are you benchmarking against past performance? How do you benchmark against your industry? That’s another component. Big-data analytics can be utilized by IT not just to deliver capabilities to the organization or push out and help with connecting to the customer. IT could use big data analytics to improve its own environment and to answer this crisis of confidence that exists. You could turn these tools internally and look at rates of response as compared to your industry, how your network is performing, how your database is performing, or how the code you write is performing. Are your developers efficient in building clean code?
  • 7. Everybody has been watching the major shift in the healthcare environment in North America. A big component of that probably should have been more benchmark analysis, analytics on code quality, and things of that nature. That’s a great current and topical example of how IT should be utilizing some of these technologies, not just externally, not just bringing it to line of business, but within its own environment, to prove that it’s building systems that are going to be scalable, secure, and stable. Gardner: What needs to take place in order for this higher level of coordination and collaboration to take place? Are there any key steps that you have in mind for embarking on this? Four key areas Whittaker: I think that there are four key areas that need to occur for this collaboration to happen. Number one, senior executives need to be aligned to what the organization is trying to achieve. They need to articulate a common vision that accounts for the shared interest of both IT and line of business and make it clear that they expect collaboration. That should come at the top of the organization. We need to get out of the smoke-stacked, completely siloed, organizational approaches and get to something that’s far, far more collaborative, and that needs to come from the top. The current approach is not acceptable. These groups need to work together. That’s a key component. If you don’t have buy-in at the top, it makes it really hard for this collaboration to occur. Number two, IT needs to get its house in order. This means many things, but primarily, it means overcoming the crisis of confidence line of business has in IT by coming to the table with an approach that works for line of business, something that business aligns with such that it feels like it has IT involvement and that they’re buying into the future that the business wants to head towards. IT needs to show that they have a plan that does not compromise the innovations that the business needs. IT absolutely can no longer just say no. That’s not an acceptable position. Certainly, if you look back, there were IT organizations that were saying, “No, we’re not going to connect to the Internet. It’s not secure. The answer is just going to be no.” That didn’t work out for them and it’s not going to work out here either. They should be embracing this shift. We shouldn’t perpetuate this cycle by driving more shadow IT and creating ultimately more for IT down the road as inevitable problems start to emerge. Number three, clear the air and put the executive plan in place. Tensions between IT and line of business have gotten to the point where they can’t be ignored any more. Put the stakeholders together in a room, air out the difficulties, and move forward with a clean slate. This is a tremendous opportunity to build a plan that meets both parties’ needs and allows them to start executing on something that’s really going to make a huge impact for the business.
  • 8. Finally, the fourth point, seek solutions that emphasize collaboration between IT and the business. Many vendors today are encouraging groups to go rogue and operate in silos, and that’s causing a lot of the problem. At Dell, we’re much more about pushing a more collaborative approach. We think IT is terrific, but business has a point. They need innovation and they need IT to step up. And the business needs to embrace IT. Instead of conflicting with each other and doing your own thing, back up your commitment to collaboration and utilize tools that empower it. That’s where we’re going to win, and that’s how business is going to succeed in the future. Gardner: Just to be clear John, it sounds as if these aren’t just issues for large enterprises. Midsize and mid-market organizations, I should think, are in the same issue set or the same ballgame. Whittaker: You’re absolutely right. If you have an IT department and you have functional business units, you probably have this problem. Certainly, you can benefit from more collaboration, from implementing and instituting an approach to leverage big data and analytics in order to make smarter business decisions is something that everybody is going to need today. This isn’t something that the G20, the Fortune 500, or Fortune 2000 alone can benefit from. This goes way down in the hierarchy, in the stack, certainly down to the small- and medium-sized business (SMB) level. And maybe even lower. If you’re a data-intensive small business, you probably need to start implementing and taking a look at big data and what analytics based approaches and data-driven decision making opportunities exist within your organization, or you will be outmoded by organizations that do embrace that. Cloud-based approach More and more, we’re seeing, particularly in the mid-market, embracing of a cloud-based approach. It's important to point out that that approach is fine and terrific. We love the cloud and we’re big proponents of it, but using a cloud-based solution doesn’t free line of business from the need to collaborate with IT. It will not eliminate this problem. Yes, you may get a little bit more of stable solution in the cloud, as opposed to managing it yourself, because it's still not core to the functional group. Ultimately, IT is the group that really knows how and where they can apply appropriate constraints, really control those relationships a little better, and ensure that they have solutions in place that allow for you to analyze all the data in the environment. You need analysis of all the data that exists right now in your cloud implementation, data that exists in all the systems throughout, so you can see all the components and find out where the correlations lie. And if you have siloed data, if you have gone your own way, you’re going to be missing that component.
  • 9. Gardner: I imagine too that you can’t outsource your alignment of your business strategy with your technology capabilities. In fact, for IT, being able to have more choice with these models for workloads and deployments, frees them up to take more of a role in this alignment. I would think that the role of enterprise architects starts to blend into IT, because they’re no longer looking at the red light-green light issues, keeping the hardware operating. Now, they can really take more of a role and step up to a higher plane on these alignment issues. Whittaker: Absolutely. We’re seeing terrific IT departments and leadership starting to take a larger role, starting to ultimately become drivers of innovation. That’s really what we want to see. All businesses want the same thing. They want to find sustainable competitive advantages. They want to control spending. They want to reduce risk to the business. And the most effective and efficient path to achieving all three is getting IT and the business aligned and allowing that collaboration to occur. That’s really at the crux of how businesses are going to gain competitive advantage out of technology in the future. Gardner: Well, John, I’m afraid we will have to leave it there. We’re about out of time. You’ve been listening to a sponsored BriefingsDirect podcast discussion on how big data and business intelligence trends are hastening a breach or perhaps an alignment between enterprise IT groups and business units. And now is the time to be thinking about which of those directions you will be taking. You have seen how a more cooperative and innovation fostering relationship, one that can perhaps exploit big data benefits for all is in order and that the stakes are quite high. And we have learned more about how gaining sustainable competitive advantages using big data strategically among all aspects of enterprises and small businesses should be something made a priority and happen as soon as possible. Any last words John on recommendations or what you think were some of the more important points that we went over today? Embrace new technology Whittaker: Thank you, Dana, this was terrific. And thank you, audience, for listening. I would say, again, the big points are, embrace the new technology that’s coming out. The innovation is going to make your business far more successful, and your organization will prosper from these new innovations that will occur. Number two, do it in a manner that is collaborative between IT and line of business. The CIO, the CMO, the CFO, the CEO, the heads of all of the functional departments, whether you are in sales, marketing, finance, operation, wherever you are, should be aligning with their IT counterparts. It's the combined collaborative approach that’s going to win the day.
  • 10. And finally, this should really be driven top-down. Senior executives, this is an opportunity to get everybody on the same page to go after and leverage a pretty enormous opportunity before it becomes a huge problem. Let’s get out there right now. We’re still in the early days, but that doesn’t mean there’s not a lot to be gained. And ultimately, in the long-term, we’re going to have more successful organizations able to achieve even greater output through this collaboration and the leveraging of big data analytics. Gardner: Very good. Thank you to our guest, John Whittaker, the Senior Director of Marketing for Dell Software’s Information Management Solutions Group. It was really good talking with you today, John. Whittaker: Thanks a lot, Dana. Gardner: And also, a big thank you to our audience for joining this insightful discussion. This is Dana Gardner, Principal Analyst at Interarbor Solutions. Don’t forget to come back next time. Listen to the podcast. Find it on iTunes. Sponsor: Dell Software Transcript of a Briefings Direct podcast on the need to solidly align business and IT goals and bring further collaboration on innovation within the enterprise. Copyright Interarbor Solutions, LLC, 2005-2013. All rights reserved. You may also be interested in: • • • • • • • BYOD Trend Brings New Security Challenges for IT: Allowing Greater Access While Protecting Networks Dell updates virtualization suite, makes VMware support a priority Want a Data-Driven Culture? Start Sorting Out the BI and Big Data Myths Now Data complexity forces need for agnostic tool chain approach for information management, says Dell Software executive Dell's Foglight for Virtualization update extends visibility and management control across more infrastructure For Dell's Quest Software, BYOD Puts Users First and with IT's Blessing Dell survey highlights importance of putting users before devices when developing BYOD strategies