Posted by: pauditore | April 22, 2013

The Odd Couple: IT & LOB Challenged by Big Data

The Data Dog

The Data Dog

At the heart of this dilemma is the odd couple, Felix Unger (Tony Randall) the IT guy who is motivated by structure and order and Oscar Madison (Jack Klugman) the LOB manager who is somewhat chaotic but business driven. For those that don’t remember, Felix was a TV writer and Oscar a sports editor both recently divorced, they shared a common goal, they didn’t want to live alone and inspite of their extreme idiosyncrasies, they lived together many years in the same house. Does this sound familiar, like the cultural rift between IT and LOB managers and the fact that most IT guys don’t understand their business? Well today with the advent of big data the odd couple must more than just live together. Big data represents an opportunity for competitive advantage and because data is information it is of seminal importance to any company or organization.

Alignment of IT and LOB has been a major challenge facing nearly all organizations for many years, especially in large enterprises where archaic and arthritic systems inhibit the modernization of core administrative and operational systems, and IT and business continuously point fingers at each other. Large organizations are facing significant organizational, cultural and technology challenges that are impairing their ability to maintain competitiveness, go global and increase profitably. Competition is driving down prices; shrinking margins are requiring greater efficiencies in operations, and consolidation, while offering greater economies of scale can actually lower efficiency if incompatibilities in systems are not addressed by IT. Small business and medium businesses on the other hand, are not as impaired by antiquated systems and platforms and are getting IT without the IT guys in the form of SaaS or utility computing.

Enter the Cloud & Software as a Service

New enabling and disrupting technologies are entering the market such as software as a service, (SaaS) and cloud based environments will play a key role in big data analysis and the optimization of many business processes. Enabling technologies such as Web 2.0 and service-oriented architectures (SOAs) are facilitating the modernization of legacy systems in some large enterprises, especially databases and data warehouses. Disrupters like telematics and predictive analytics are enabling the concept of pay-as-you-go insurance through quantifiable risk and big data.  These disrupting technologies will play a seminal role as early adopters deploy them to gain competitive advantage in the market, and in Thomas Friedman’s The World Is Flat, these technologies are considered flatteners in the global economy along with big data.

Expecting business and IT cultures to suddenly march to the same drummer and become a bastion of IT-LOB collaboration is unrealistic. However, organizations that make this happen and will reap the benefits of big data.  The world is flat, and now IT and LOB must work together more closely than ever.  One of the greatest barriers to optimizing and automating business process is not technology itself, but organizational culture, and a major question facing organizations today is how Felix and Oscar will work together to change a reactive culture into one that is proactive in the age of big data.

Business and IT Alignment

Like the chorus in a Greek tragedy, industry cognoscenti have been engaging in a continuous chant of “alignment of business and IT strategy for several years now. “Alignment” according to the OED originates from the old English word “alinement,” and is about putting soldiers in a straight line. Felix and Oscar must be more than aligned: they need to be in lock step with a common set of goals that leads to an Emmy for the business performance improvements that are possible though system modernization and/or replacement.

Firstly, IT and LOB need to clearly understand the tactical and strategic business initiatives critical to the company’s success and the business value of their big data. Once these are defined and understood then it’s up to IT to help LOB understand what IT can deliver, this is what I call business-driven IT, or big data enabled IT.

Secondly, IT and LOB must view their business processes as assets or investments, not as the cost centers as they were treated as during most of the 1980’s and 1990’s. As assets they will generate financial returns and should be managed accordingly, and deliver measurable returns. Accurate assessment and modeling of processes insures successful process optimization that delivers a definable range of returns before the optimization and investment occurs, this is called predictable ROI. The ROI of big data is just beginning to be discovered.

Modernization vs. Replacement of Databases & Data Warehouses

According to the analyst community one of the most commonly asked questions by IT today is “how can I renovate my legacy environment?”  Perhaps the first issue organizations should evaluate is the cost of total system replacement vs. modernization. And how they can leverage today’s enabling technologies to put a new face on old systems, and employ a surround strategy to pull together disparate platforms. To mitigate the risks inherent in a traditional replacement strategy, and to maximize the near-term value delivered to the business, organizations should evaluate alternative strategies to total replacement based on the following principles:

  • To the greatest extent possible, the existing legacy environment should be leveraged, rather than discarded.
  • Required/desired business functionality that the current systems are incapable of supporting should be introduced in manageable phases using easily integrated and extensible software components.
  • Project decision-making should be driven by a focus on risks and returns associated with each incremental investment, rather than on meeting some pre-determined list of technical milestones.

Business Benefits of IT Modernization

Overall, any modernization or replacement solution must be mapped out by IT and LOB and significantly improve the ease of doing business for internal staff and customers. IT must work very closely with LOB managers across several departments within an organization to deliver a systems environment that:

  • Is customer-focused, and extends the enterprise to customers via a self-service model.
  • Provides business flexibility by easily evolving and extending as customer requirements and/or business conditions evolve.
  • Provides consolidated views of information related to both core and adjunct activities by integrating information from multiple sources.
  • Supports compliance, business flexibility, and the integration of disparate information sources across business units.

You might think that in today’s economy business success will be dependent on IT and LOB working closely together to achieve organizational goals and initiatives such as customer service. However, the rapid evolution of cloud based technologies and big data has enabled many organizations large and small to deploy IT, without IT, to optimize specific business processes such as HR or sales force automation and now in the case of big data analytics. Organizations and companies in emerging markets such as India, Brazil, and China have a technology advantage in the global economy because they don’t have legacy systems. They can jump right into business process utility computing, cloud and big data as long as they comply with national regulations on financial services and private big data. There will always be a place for Felix when it comes to migrating data from legacy systems or integrating disparate systems, but when it comes right down to it cloud and big data initiatives directly address the IT- LOB disconnect that has plagued businesses and organizations for decades. The big data tsunami is a major challenge to both IT and line of business professionals, until next time I wish you great selling and marketing in the millennium.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: