Since Marc Andreessen notoriously stated that “software is eating the world,” we’ve seen new technologies disrupt the entire business ecosystem – from the cloud, to IoT, and specifically Big Data. Data is now even being called the “new oil.”
Data-driven enterprises like Airbnb, Amazon, Netflix and Uber have transformed everything – how they make decisions, invent new products or services, and improve processes to add to both their top and bottom lines.
By 2020, an estimated 1.7 megabytes of new data will be created every second by every human on the planet, according to Bernard Marr in “Big Data: 20 Mind-Boggling Facts Everyone Must Read.” While some companies have realised the value of data, harnessing it to create new business models and redefine and disrupt entire markets, many have not. According to recent EY research, just 23 per cent of organisations have implemented an organisation-wide data strategy that enables them to use their data for a comprehensive view of market conditions, customer needs and preferences, and to aligning products and services.
Consider these other stats in Marr’s article: by tapping into the full power of Big Data, retailers could increase their operating margins by as much as 60 per cent (No. 18). The healthcare industry could save an estimated $300 billion per year by integrating Big Data (No 15). And a typical Fortune 1000 company could net an additional $65 million in income with just 10 per cent more of its data (No 17).
Much like businesses that were late to transition from the analogue to digital world with the birth of the internet, adopting data as a strategic asset and transformational tool will be critical for businesses to innovate their offerings and become exponential organisations.
While knowledge is power, digital transformation is both a huge opportunity and massive challenge – especially for heavily regulated industries like healthcare and financial services. And with the European Union’s upcoming General Data Protection Regulation (GDPR), you’ll be affected by the regulation – and its severe penalties if you serve any customers in the EU, whether you’re based there or not.
Additionally, most enterprises have grown through acquisition and consolidation, creating business and technology silos. Still, your business must exploit every advantage, every ounce of competitive differentiation to survive and thrive. By becoming part of your company’s DNA, data can transform everything.
Here are six attributes that define a data-driven enterprise:
1. Recognises data as a strategic asset by using it to generate new revenue streams
2. Empowers the business with insights at the point of action by targeting the right audience with the right content at the right time (i.e., better marketing)
3. Uses data to define and reshape its competitive advantage by extending its use beyond IT stakeholders to the rest of the organisation
4. Makes insight-driven value a crucial business KPI by measuring its use of data to improve business performance
5. Encourages an analytic culture by depending on data for insights to make daily operational improvements
6. Protects and secures business data to ensure regulatory compliance, as well as maintain customer relationships and trust as part of good business practice
How do you build a data-driven enterprise? Like any construction project, building a data-driven enterprise starts with architecture. But unlike building your dream house or new office building where you hire one architecture firm to produce blueprints, an organisation must manage multi-disciplinary architects. There are three architecture roles within an organisation.
1. ENTERPRISE ARCHITECTURE
Enterprise architecture defines the structure and operation of an organisation with the purpose of determining how an organisation can achieve its current and future objectives most effectively, translating those goals into a blueprint of IT capabilities. Its advantages are improved decision-making, ability to adapt to changing demands or market conditions, eliminating inefficient or redundant processes, and optimising the use of assets.
2. DATA ARCHITECTURE
Data architecture involves models, policies, rules or standards that govern what data is collected and how it is stored, arranged, integrated and used within an organisation and its various systems. It starts with data modelling, the creation of a unified view of any data – structured or unstructured – from anywhere – within your walls or in the cloud. Such an integrated, graphical representation of enterprise data enables stakeholders to see business-critical information regardless of its source and relate to it from their unique perspectives.
3. BUSINESS PROCESS ARCHITECTURE
Business process architecture represents the elements of a business and how they interact with the aim of aligning people, processes, data, technologies and applications to meet organisational objectives. It provides a real-world picture of how an organisation functions, including opportunities to create, improve, harmonise or eliminate processes to improve overall performance and profitability.
While enterprise architecture, data architecture and business process architecture typically have been siloed practices with disparate tools that don’t enable collaboration, a data-driven enterprise integrates them for a data management foundation that enables the organisation to:
· Effectively manage and govern massive volumes of data
· Consolidate and build applications with hybrid architectures, including traditional, big data, cloud and on premise
· Support expanding regulatory requirements, such as GDPR
· Simplify collaboration across key roles and improve alignment with accurate financial and operational information
· Improve business processes for operational efficiency and compliance
· Empower employees with self-service access for enterprise data capability, fluency and accountability, giving them the right information at the right time to improve decision-making
With better visibility, comes better outcomes that make it possible to improve the customer experience. Without the complete data story, there are no accurate insights and therefore no success in meeting this or any other C-level goal. Each architecture team is only playing with a half a sheet of music, if you will. Therefore, risks and times to market increase, as does the potential for missteps and false starts – all adding to costs. However, an integrated architecture defines the data-driven enterprise by giving it greater visibility, context, value and collaboration.
Digital transformation involves more than just technology; an organisation’s culture, operations, business applications and content also are effected. To that end, IT plays a critical role in the transformation, but the desired outcomes are C-suite and boardroom goals, including:
1. Identifying opportunities and risk
2. Strengthening marketing and sales
3. Managing risk and compliance
4. Producing new products and services, or improving existing ones
5. Monetising data
6. Improving the customer experience
The bottom line is that data-driven businesses win. Those that are still reluctant because it’s too challenging to “seize the data” face an uncertain future.
Adam Famularo, CEO, erwin
Image source: Shutterstock/alexskopje