In the current tech era, there are two phrases that are viewed with almost mystical awe. First, “digital transformation” – we hear that effective digital transformation is the panacea for all enterprise concerns. Second, “data integration.” A massive chunk of enterprise spend goes to data integration.
So what’s the relationship between these two core concepts – and how can this relationship drive competitive advantage? In this webinar, we’ll discuss:
1. How does being great at data and analytics impact business transformation?
2. Why is data analytics still so hard for vendors?
3. Apparently in the COVID-19 crisis, hacks are up markedly. Given this, how important is data governance, data privacy, data security?
4. As we move to cloud more often, where is data? And how do you integrate it and make it useful?
5. What is the future of data integration and digital transformation?
To provide insight into digital transformation and data integration, I’ll speak with two top industry thought leaders:
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How does being great at data and analytics impact digital transformation?
Suer: “I think the digital transformation has gone through a couple of phases. I think the initial phase was taking the analog process in making a digital one.
“I like to refer to Concur. I know it was a later piece of software but everybody can relate to expense reports and stapling things together in paper and they took that paper process and made it digital. And for me, it got me paid before the expense cycle on my credit cards which was a good thing.
“I think digital transformation today is very different, it’s about how do I transform and change the business? And there’s lots of great examples of. One of my favorites is General Electric where they started making streaming data off of jet engines and the president of company says, “Well, what does that mean for us? How does that transform what we do?”
“And they changed their business model, they’re no longer selling jet engines, they’re selling a service that says to the airlines, “I’m gonna keep you flying.” And there’s just lots of examples like that.
“Our mutual friend, our friend Jeanne Ross like to talk about her shopping experiences at Nordstrom, where she transformed how she purchased and figured out what she wanted. So the challenge for the CIO and the challenge for the business today, is to add as a business capability, data and analytics, and then use that to transform the business and how it interacts and sells to its customers.
Mocker: “Well, the business models get transformed. We view digital transformation or business transformation that has to do with digital, it’s two different transformations actually that are going on. And the role of data in that is also different, depending on which transformation you’re looking at.
“One of them we called digitized and the other one being called becoming digital. Digitization is about using digital and data to improve operational excellence in your business processes, how you do things. And digital is exactly about what Myles talked about, it is using digital to create new offerings for your customers. You try to solve problems for your customers you weren’t able to solve before.
“And with digitized, data plays an important role and it’s about a transparency into your processes, visibility into your processes, showing data among processes. And for digital, data moves into your offering towards the customer. For example, you want to offer consulting services based on the used data of your machines that you are selling if you’re a manufacturing company, so very different roles, more internal versus external customer-focused.”
Why is data analytics still so hard for vendors?
Myles: “Part of is the way we thought about our organizations. And so now you’ve got all this data and the silos and you’ve got to get it out, you got cleanliness issues because it’s not perfect. You’ve then got issues with it because there isn’t a single view and then once I do that I, if I’m gonna do analytics, I’ve gotta prep it and make it ready and then the data scientist spend, as a friend of mine likes to say, most of their work doing janitorial things rather than building model.
“And so all of those things are need to get solved and they need to get solved quicker. And Martin, you know these as well as I do, I had to call, send Jeanne a note saying okay tell me what how it breaks out. But only 28% of companies have digitized and when you look at it, you got 51% that are still in silos and 21% that I like to say you’re in duct tape and Band-Aids. So a lot of businesses aren’t good at it, but they have to get on in it or they’re not gonna cross the digital chasm.
Mocker: So one thing is technology legacy and it’s the spaghetti of systems. You have data everywhere. They’re in silos. Everyone loves their own data and it’s hard to integrate.
“I think the other legacy issue we have is the business legacy. I’d say if we talk about data integration, data integration is really business integration. One of my favorite examples is USAA, when they moved towards becoming a more integrated company on their offering side, we move away from just selling individual products. Like here’s a car insurance, here is a car loan towards we help you buy a car.
“You need to integrate across your business units and that’s hard, and that takes so much more than integrating the IT system. It means we change incentive systems for our salespeople. We change the governance structure. How do we make decisions across these different units?
“Our prioritization process changes. It means skills. They had to go through organizational surgery and that is just really difficult and you don’t do it unless you have really pain or lots of passion.
“It’s a moving target for sure and these things do interact with each other. Technology allows you to do things you weren’t able to do before but it requires you to change in ways you weren’t able to change before. Absolutely.”
In the COVID-19 crisis, hacks are up markedly. Given this, what is the role of data governance and data security in digital transformation?
Myles: “I think that if you look at it, we haven’t governed things before – we, for a long time, thought about putting moats around our castle. And we think about firewalls. That’s kind of the world that we were in but a friend of mine wrote this book several years ago called The Privacy Engineer’s Manifesto and she talked about why aren’t we designing for data access in terms of who can see something, who can’t see something and so we really need to think more broadly about the data we collect, why we collect it, but how we protect it.
“In many cases, the courts have said that the data is co-owned. So we have a stewardship relationship with the data folks. So, but data governance has been a tough thing, for a long time CIOs told me they didn’t wanna even get into the topic. They didn’t like it. They want somebody else to go find the stewards and all that but that’s changed.
“So CIOs are taking a more active role and so are chief data officers. Both of them are trying to get in place the practices and I think the business is starting, with COVID-19, if they weren’t already to realize the data is really important, and access to data is important and they need to protect that stuff.”
How does the cloud plays a role in data integration and digital transformation?
Mocker: “Well, it’s both a boon and a bane, right? On the one end, so data is clearly moving into the cloud but it’s not just moving into one cloud, it’s not just moving into your cloud and it’s kind of like within the cloud – it’s moving towards the edges. So it’s everywhere. So data is ubiquitous. It’s everywhere.
“Which makes the integration issue well more challenging for sure. And I think there are a number of ways to tackle that on the technical side but also from the business side. I think what it takes from the technical side a lot of well make the data available via APIs, your own data within your own company. So you have various platforms there which serve different purposes. You have the operational systems.
“You have the digital offering platform and they need to talk to each other. You wanna, whatever register, and you IoT connected product on the platform. That’s one platform. But you also need to be able to invoice, that’s your ERP system. You wanna decouple them via APIs, right? And so that’s clearly a trend. You put an API on everything if you wanna get the data.
“And it’s external for your offering. So you’re offering data externally, but it’s also within your company, of course, everything gets wrapped in APIs and component ties. I think this integration issue what it needs to actually work from the business side is you need to have a purpose from the business side.
“So I think when I talk about APIs and say, “Hey, you wrap your systems in APIs or your data in APIs.” There comes this, “Oh, yeah, let’s have a big project that actually does that to all of our systems,” and that’s typically like, “No, no, you don’t wanna do that.” You actually wanna have kind of this push by offerings or by business process initiatives that there’s a business purpose that pushes for a step-by-step integration because otherwise it’s going to be tough.
“I think you do wanna use an API strategy. I think you just don’t wanna use the big bang, this large master data management like we are going to change this world and after this seven and a half years’ project it’s going to be a bright future. These projects are very tough to get funding for, to keep going over a long perspective, and to get business people to get ownership for and to kind of see the value in it.
“But if the integration is being done kind of offering by offering if you can say like, “We have a new offering that we wanna create and we need to integrate data from all of this,” all of a sudden you have a business push. We need to get this out and that is when integration works.
Myles: “I think there are a lot of companies out there who, their message is, “Hey, look, go and throw away all your integrations that you’ve built up over the years and then now go build APIs.” And they end up going, “Wait a minute. You have to code all these things.” And there it slows them down in the process.
“So we think a smarter strategy is to start from your integrations and then off of that you build APIs, but let me give you one amazing example. So I had an early view of Martin’s book because Jeanne sent it to me to review and I had gotten to the point where I’d read about DBS Bank and I got this request, the enterprise architect for DBS Bank was to come see it.
“He really just said we’re doing it. We really do have account. What they did is they created two catalogs, they created a catalog for internal use which was broad and deep, and then they created a catalog for external users.
“And so one of the things they exposed is an API. I would never have thought of before was, let’s take our ATM application and expose it as an API. This company came along and said, “Oh, I can make this mobile payments application where you could go into a convenience store and pull cash out from the cash register.” Which actually is a win-win.
“I studied this several years ago and cash is actually the most expensive form of payment because it gets lost and pilfered and all these things happen. And so if you can pull cash out of the cash register, it’s a good thing for that convenience store. And so who would have thought you could have taken the ATM application which was built years ago, put a wrapper around it, and expose it.”
What’s the future of data integration and digital transformation?
Mocker: So here’s the answer I would love to give. It’s going to be really exciting. It’s going to be people are going to do so many cool things with data, with their own data, and they are going to allow other people to do even cooler things with their data because we’re moving towards an ecosystem economy, and lots of companies are thinking about, “Well, so I have this digital platform and these other data and how do I enable others to innovate on it?”
“And that would be awesome because assuming that you are the only one who has the coolest ideas and the best people, isn’t probably the best assumption to make. So I’d love that answer.
“I’m skeptical whether that is going to be the case in 24 months because these things take a long time and companies have been at the data integration part in their operational systems for decades, and large companies… BISF announced in 2018, in 2025 we’ll have restructured our architecture.” Which sounds: are you crazy? But no, it’s not crazy. Seven years is actually pretty… I mean it makes sense to actually plan for this.
Mocker: So I think it’ll look cooler, but I don’t expect that everything will be so much ahead. I mean, so people do underestimate how fast things can move. And digital is all about speed but, man, do digital transformations take time.
Myles: “Booze and Company came up with this idea about capabilities years ago. And enterprise architecture adopted. I’m trying to figure out where the origin point of the connection was, but I haven’t figured that out yet. But I think data and analytics are becoming a core capability of businesses.
“And if you don’t have it, it slices through what Porter talked about in terms of competitive advantage. So, I think you have to get good at data. You have to improve your data, so the limited modelers you can get. Everybody’s putting out a modeling school. I’m amazed. I just saw something from Berkeley. It says you don’t even have to take a test to go get a master’s in data modeling. [chuckle] No GRE.
“But I was encouraged a few years ago, I went to a class, to an all-day event with a bunch of modelers. And it was funny after a while ’cause I knew enough to be dangerous. And I had to calculate between my two master degrees, how much, how many classes I had and realized I had taken seven classes on it, but it was interesting because what they were doing were solving really interesting problems.
“And so, if you aren’t helping them make their data useful to use something that open group talks about making data useful, you’re not doing something about that now and then building your modeling community. And organization also matters importantly about this time.
“Davenport has talked a lot about you need to have a centralized organization that’s shared out rather than here there’s a modeler in this group and a modeler in that group. There’s a lot that happens from collaboration. And then you need to figure out how do I discover and expose the data I have? If I can do all of those things, I can start to do it, but IDC has done this analysis and just about every industry has a competitor coming about me.
“There is an example in one of the books I read recently of a company in Asia Pacific that does more online transactions – by about five times – then Chase Bank. And everything is automated from the credit scoring through all of that stuff. They build models for how do you figure out all of that stuff? So, if you’re not building that quickly, you’re in a difficult situation.”