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In the Digital Enterprise, the CIO should become the chief Information officer

on ‎12-20-2013 05:52 AM

digital data.jpgThe other day I was looking back at how information technology had evolved over the years. I suddenly remembered it used to be called data processing. For a long time, data, had been at the center of IT. Indeed, its roots start with the IBM sorting machines, using punched cards, evolved from the Jacquard cards, allowing an automated loom to weave geometrical patterns in cloth.


Data, contained in those punched cards, was at the center of the operations. And the data processing department ultimately turned into electronic data processing, and later information technology. But when did the focus on data get lost? I would argue it was when the MRP and later ERP systems appeared, when all data was stored in a single database to ensure we had one version of the truth.  While the software managed that, the department could focus on other things. As technology became more complex, that became the natural focus of the IT department.


And now, it looks like we’ve come full circle. Data is critical again, so critical, we call it big data now. So, can the CIO become the Chief Information Officer again, turning data into information? But here is where things become a little more complex. While IT was focused on technology, the information needs of the enterprise have evolved, and continue to evolve as a matter of fact.


In the old days, data was the data contained within the enterprise. That was the only data available. But since the late 90’s we are overwhelmed with an ever increasing amount of data. I’d categorize this data into three categories, the enterprise data, the eco-system data and universal data. Let me explain you what this means and why all three are important.


The Enterprise Data

First, that contains the traditional information that has always been in the realm of the CIO. It’s mostly structured information that can be found mainly in the systems of records. It’s the history of what the enterprise is doing and how it is evolving. Financial analysts are instrumental in gaining the most of analyzing this information.


But there is more to it. As users increasingly collaborate electronically and replace their documents by digital files stored on SharePoint sites, knowledge management systems or any other mean of storing information, that information becomes available to the whole enterprise. What is most difficult about it? Finding it back. Such information is often unstructured or semi-structured in nature and requires appropriate search engines to be discovered. Only a limited amount of enterprises are equipped with such search engines.


And then, there is a third type of data that is available in the enterprise, and that is the information related to research and development. It may be own generated information, found publications, studies performed by external consultants or bureaus etc. That data is typically maintained in the R&D or product/service development entities and typically not accessible outside that group of people.


Often, tying together these different sources of information may help companies understand what is happening with one of their products or services. Let me give you an example. A telecom company launched a new online way to subscribe to one of their services. And they were really happy because subscriptions jumped by 25%. Then we started to analyze the process, identifying all data elements involved, and we came to a staggering conclusion. Half the people who had decided to subscribe to the service canceled during the payment process as the processing of the credit card took too long. So, rather than having a 25% jump in subscriptions, they could actually have gotten much more. But because the available data was not analyzed, nobody spotted it.


Eco-system data

This leads me to the second type of data, the eco-system data. The time when the enterprise did all are far gone. Increasingly companies are one component in a chain of players that manufacture the final product or provide the service. They work with suppliers and customers in achieving that. In that process, information is gathered, and by combining the data of the players in the supply chain, we can identify how that supply chain actually operates. This is one example of eco-system data.


But there are others. Again, let me give you an example. A manufacturing company producing electronic goods uses third parties both in the manufacturing process as well as in the repair operations. Repair tickets are created and, in case of warranty, submitted as part of warranty claims. Analyzing those claims and correlating them with information of the supply chain gives us an understanding of what went wrong and allows us to correct problems and learn for future developments.


Actually, we can even go a step further. Today people tweet, write on Facebook, forums etc. about their experience with given products and services. Your customers are also part of your eco-system. They will tell you what works and what doesn’t work with your product/services. Are you listening to them? They are the best early warning system you can get. And yes, occasionally they can over react. But they will give you a clue of how you are perceived.


Let’s now take the warranty example one step further. You monitor what is being said about your products and find a couple claims of issues related to a particular model. In searching through the warranty claims, you find a couple situations where such repairs were necessary. Combining the social information of your customers with the warranty claims, the R&D and supply chain information, you are able to quickly halt production on a faulty product, find a turn-around and relaunch a corrected one. The benefit, reduced warranty cost, reduced brand damage and being seen as being in control.


Universal data

But there is a third set of information you should be interested in. Spread the nets wide and understand the market and the environment in which your organization is operating. What are competitors doing, what is the market looking for, what is happening that could affect your operations? Here again, let me give you an example. A number of years ago, Walmart nearly lost its Christmas sales because it got surprised by a strike of the west coast ports. Its containers, arriving typically by boat from China in early September were waiting for days in front of LA and San Francisco because nobody was available to unload them. The dispute had been going on for quite a while and even had been publicized about. But nobody in Walmart linked port dispute with Christmas sales. So, nobody looked for the information.


Understanding such links and looking for any information of potential events that could disrupt the supply chain is one of the examples of how the analysis of universal data can help you understand what’s going on.


Can the CIO become the guardian of the information?

Two things are clear, there are not enough data analysts around these days. The CMO wants to understand his market and is looking for social media analytics to improve marketing efficiency, the head of supply chain is looking for visibility to reduce supply chain costs, the responsible for warranty wants to limit its reserves etc. As IT is not providing them what they are looking for, each is going in his own direction, using SaaS services, doing small developments on Amazon etc. But in doing so, they analyze one type of data, but are not taking a 360 degree view. And that is where the CIO can play a major role, providing them access to the data they require and allowing them to combine enterprise, eco-system and universal data to maximize the benefits of their newly gained knowledge.


The fundamental question is whether the CIO is prepared to evolve beyond the management of the IT department to truly become the chief information officer again.



As Christmas is nearly there, let me take a minute to wish you all a merry Christmas and a happy new year.

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