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Monday, November 12, 2012

Big Data : In Election And In Business Creates Big Impact

The US Election results and the process have created worldwide impact. Not only it was noticed for electing someone for arguably the most powerful office in the world, it brings along with it many innovations and advances. In 2008, when Mr. Obama won the elections for the first time, it was very clear that technology played a substantial role in his assuming office. We saw in 2008, that online world was leveraged in a big way in the campaigns for a very successful outcome,. In the just concluded 2012 election, clearly data, data insights and data centric predictions played a very big role in shaping the election outcome. Lot of deserved kudos went in the direction of Nate Silver for his super accurate predictions of the election results based on data insights. Many people looked at it from different perspectives. Media industry focused on how works like this will in an of itself influence the media coverage of elections and assessment of preference trends in election. Nate is the author of Amazon best-selling book, “The Signal and the Noise: The Art and Science of Prediction“. In the days leading up to the election, he was on every major media show, explaining how a detailed analysis of huge amounts of data, distilled from many different sources, enabled him and his team to predict with a fair degree of confidence and certainty what would happen district by district in the US elections (It’s actually a great reward to see this appearance of Nate Silver, on Stephen Colbert’s story show, reported by the LA Times). Very clearly, he was accurate to the last level of detail, in an election when the swings were noticed by both and in the days close to the election, the “momentum vote ” of the challenger was supposed to be mucking the trends.

A lovely article by John McDermott at AdAge brings out that Silver’s work will help transform the shift the “touch and feel aspects” of reporting to reporting that is anchored in data - facts & statistics. The article quotes ComScore’s Online traffic analyst Andrew Lipsman as saying , “Now that people have seen [data analysis centered political analysis] proven over a couple of cycles, people will be more grounded in the numbers.” Chatter in the online world quoting Bloomberg as the source suggested that , Barack Obama’s site was placing 87 tracking cookies on people’s computers who access the site. Mitt Romney’s site was placing 48 tracking cookies on people’s compute. Tarun Wadhwa reports at Forbes that the power of big data has finally been realized in the US political process:

“Beyond just personal vindication, Silver has proven to the public the power of Big Data in transforming our electoral process. We already rely on statistical models to do everything from flying our airplanes to predicting the weather. This serves as yet another example of computers showing their ability to be better at handling the unknown than loud-talking experts. By winning ‘the nerdiest election in the history of the American Republic,’ Barack Obama has cemented the role of Big Data in every aspect of the campaigning process. His ultimate success came from the work of historic get-out-the-vote efforts dominated by targeted messaging and digital behavioral tracking.” This election has proven that the field of “political data science” is now more than just a concept – it’s a proven, election-winning approach that will continue to revolutionize the way campaigns are run for decades to come. It is common knowledge that the campaign had been heavily leveraging the web platform in very many sophisticated ways. The campaign spectacularly succeeded in integrating political infrastructure with the web infrastructure that they managed to create. A peer-to-peer, bottoms up campaign seemed to be the strategy that finally delivered results. Volunteer participation, feedback synthesis and citizen vote drives were successfully brought out in massive scale hitherto unknown with the web platform. The campaign heavily shaped by the power of social networks and internet energized the youth power in unimaginable ways signifying the triumph of technology power. It’s a treat to watch : Mobile, Social and Big Data coming together and making an impact in this presidential election 2012.

Let’s look at the complexities involved in this exercise : There was a notable shift of demographics in America resulted in the traditional vote bases being less influential (this trend will continue dramatically in the future) – the absolute numbers may not have come down but the proportion in the votable base lowered somewhat –leaving the destiny in the hands of newly emerging swing voter base. Technology played a significant role in doing the rigorous fact checking – imagine during a presidential debate – typical citizens were looking at fact checking analysis in their other screens while watching the debate on the television. Pew research found that many were looking at dual screens while watching the debate. All well, till one looks at the paradox here – as more and more effort is made and money is spent to flood the media with political messages, the impact is significantly less, as people don’t rely on a single news source. Many American homes today are getting to embrace the “four screen” world (TV, laptop, tablet and phone, all use in tandem for everything in our lives) and so the ability to create impact on any promotion is actually becoming tougher and tougher (to create positive impact).

This is observed along with the fact that the U.S is also undergoing a deep structural and institutional change, affecting every walk of the American Life. While the online world is growing, it’s a common citing in the cities and downtowns where one can see established chains closing shops, unable to hold on to competition striking at them from the cyberworld. Trends like this clearly influence the economic role played by different industries, trends in wealth creation, job creation, city growth etc. Younger voters are more clued by default to these changing trends and their impact and so begin to think of their prospects from a different prism compared to older voters, who generally hold conventional views and so this further creates a deeper strata within the society.

Time Magazine has Michael Scherer doing an in-depth assessment on the role big data and data mining played in Obama’s campaign as well. Campaign manager Jim Messina, Scherer writes, “promised a totally different, metric-driven kind of campaign in which politics was the goal but political instincts might not be the means” and employed a massive number of data crunchers to establish an analytics edge to the campaign. The campaign team put together a massive database that pulled information from all areas of the campaign — social media, pollsters, consumer databases, fundraisers, etc. — and merged them into one central location. The current US President’s (Mr.Obama) campaign believed that biggest institutional advantage over its opponent’s campaign was its data and went out of its way to keep the data team away from the glare and made them work in windowless rooms and each of the team members were given codenames. That in and of itself signifies the importance the campaign attached to “Data – Big Data”- that’s!

Scherer adds: “The new megafile didn’t just tell the campaign how to find voters and get their attention; it also allowed the number crunchers to run tests predicting which types of people would be persuaded by certain kinds of appeals.” Scherer’s piece is an astoundingly fascinating look at how data was put to use in a successful presidential campaign. The election results are in a way a big victory for the nerds and big data. Similarly, some time back there was a sensational article on how Target figured a teenage girl was pregnant even before her father could find it. Inside enterprises, there must be big advocates to create frameworks to get to we are big advocates of the “know everything” through the world of data and align the business to succeed.

Large-scale data gathering and analytics are quickly becoming a new frontier of competitive differentiation. While the moves of online business leaders like Amazon.com, Google, and Netflix get noted, many traditional companies are quietly making progress as well. In fact, companies in industries ranging from pharmaceuticals to retailing to telecommunications to insurance have begun moving forward with big data strategies recently. Inside business enterprises, there’s a similar revolution happening – collection of very fine grained data and making them available for analyses in near real time. This helps enterprises learn about the preferences of an individual customer and personalize the offerings for that particular customer /unique customer experience that would make them come back again and again to do more business. Practically speaking, one of the largest transformations that has happened to large enterprises, has involved implementing systems, like ERP, enterprise resource planning; CRM, customer relationship management; or SCM, supply chain management—those large enterprise systems that companies have spent huge swathe of dollars on. These systems typically manage operations extremely well and then set the stage for enterprises to gain business intelligence and learn how they could be managed differently. That’s where Big Data frameworks come in handy and it’s up to business now to seize that opportunity and take advantage of this very fine-grained data that just didn’t exist in similar forms previously. Too few enterprises today fully grasp big data’s potential in their businesses, the data assets and liabilities of those businesses, or the strategic choices they must make to start leveraging big data. By focusing on these issues, enterprises can help their organizations build a data-driven competitive edge, which in this age is clearly a very powerful determinant of success.

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Friday, November 09, 2012

Enterprise IT : Future Proofing Vs Failure Proofing - Part II

Look at this – like the proverbial death by thousand cuts – the cloud services can really disrupt the carefully laid out enterprise IT strategy much to the discomfort of the IT department – the disruption can range from enterprise IT strategy leading to shared services mechanisms. Everything changes from sourcing to provisioning to metering through consumption. It’s needless to emphasize that the cloud services can be made operational for enterprises rapidly and in many cases more economically. In the journey of cloud adoption inside enterprises, it must be noted that in a number of cases that the business executives can, and do, buy them independently of their IT department’s plan. This is partly accentuated by the fact that there exists an ever widening gulf between the innovation cycle-time of the IT department and of cloud services providers. One should see this in the background of constraints centered on budgeting inside enterprises.

There are well meaning advise being dished out by the experts – essentially advocating that enterprises first get their feet wet with cloud services, gain a reasonable perspective of where cloud services could fit in for their needs – fully understand their risks and benefits.. This is well meant as sometimes in their over enthusiasm they evangelists tend to created many solutions that may be fragmented with unmanageable information flows. Sometimes, an inelegantly architected solution could create fragmentation in the landscape, accentuating the challenges of information flows and vendor relationships. On the other hand, a well thought out cloud solution can provide an elegant architecture that can help organizations scale well and provide consistently reliable performance. IT department inside enterprises should regularly factor-in the strategic leverage of such solutions that should take stock of big picture thinking and long term plans for the enterprise. This in turn would enable the IT departments to feel on top of IT Management. The key strategic perspective here is that cloud services would imbibe the benefits and wisdom of looking outward at the sea of opportunities.

Like any major initiative, no doubt, cloud services will benefit a set of users and may provide disappointing results to another set of users. From a strategic standpoint, it may be even be the cases that while a majority adding cloud services as part of their IT strategy will yield good results, but for a small number of players, it may pose greater threat than providing an upside. A structured framework should be used in assessing cloud readiness inside an enterprise to align them into a coherent IT strategy. Well thought out cloud services within the enterprise would bring more clarity and method in assessing their effectiveness therein. All these clearly point to the fact that the chariots of cloud are hitting enterprises around the world and an unexpected casualty in this process happens to be the traditional IT department. With business and external service providers beginning to play such an important role inside the enterprises, should this trend continue and become a mainstay practice, the role of the IT department gets more and more tough to retain their crucial positioning inside the enterprise, and would force them to act in way more and more strategic to retain their standing.

Forward looking IT departments address these challenges as opportunities to get more strategic to the enterprise – one of the most common approach employed by these firms is to either on its own or in tandem with business initiate a detailed assessment of the enterprise cloud strategy – what part of the business and IT could leverage cloud services , what part of the IT portfolio could get affected, what should be done short term, medium term and long term, what type of risks and benefits would different scenarios provide and what type of governance would best suit the enterprise. By being in the forefront of such strategic planning initiatives, and thereby putting themselves in the center stage of things, some IT departments manage to retain their positioning inside their enterprise.

If IT can position the company for a transition, it can rightfully take the role of an anchor facilitating change to make business successful rather than a drag holding back progress . Contextually, if it can be determined early enough that leveraging cloud services can provide flexibility and be more economic overall, and with the right security models of implementation then it actually provides IT a big opportunity to make such services become a platform of growth for the enterprise and if IT can push such an agenda and deliver successfully, it becomes that much more strategic to the enterprise. End f it all, cloud is a democratizing force where access to resources gets more widespread and readily available at typically lesser cost of access. IT will have to recognize this shift and make the right moves.

Every CIO and business leader inside enterprise would want their IT organization to be more proactive and get outside of being in the reactive mode. The ability to shift gears to move from being in a reactive mode to get to a proactive mode is generally a very carefully calibrated journey. Every IT department inside enterprises that have been in existence for a while faces simmering tension with business over complex systems, inflexible, inextensible and come in the way of enterprise getting agile. While business expectations have by-and-large grown from looking at IT to support their operations – it’s moving towards enabling more rapid delivery of services and applications to powering or enabling business. The classic ratio of investments to support past decisions vs investments needed to provide innovation/new lines of service is always a hut button issue inside enterprises. Its well known that reactive organizations end up spending more than 2/3rds of their IT investments in managing legacy infrastructure and applications and the remaining budget mostly get consumed in expansions/extensions/upgrade, leaving very little resources to support building new expertise to support emerging opportunities.

Globally, business is challenged on cost, time-to-market and on being able to adjust to market realities at a rate faster than the rate of change seen in the marketplace. New business models, innovative services, self service mechanism, online order fulfillment – most of these heavily rely in IT and would not be possible without IT contribution. It’s not uncommon to see cloud making its footprint inside enterprises very opportunistically (many times under the radar that IT doesn’t get to know after these are up and running inside enterprises). In such cases, it is noticed that business functions directly have procured cloud services including consulting support from external partners. Typically, it can be seen that business teams indulge in such practices, owing to perceived inefficiency /poor service level adherence of IT inside enterprise. Many times, IT architecture team use their architecture and stack standardization as a defense weapon to block external partners providing new types of service that business find attractive to leverage. Sometimes, IT is not even ready to structurally accommodate new cloud service partners –as it may call for changes to their processes, support levels and in some case contractual adjustments tied to support functions and financial models in place.

It then begs the question what can be done make IT move away from being reactive to be proactive. Redefining the ways of working, leveraging the foundation of cloud services for making business get flexible and grow faster, nailing down the right security model and architectural fitment will provide IT with huge headstart in changing itself and in changing the impact that can be made to business. Some of the specific ways in which these can be build include but not limited to are as under: • Actively continue making investments in cloud services and work towards creating a cloud services centric foundation for growth; • Proactively co-opt external partners in the growth, innovation story of the enterprise; • Actively enable more and more self service functions, that provides business with lot more benefits that would catapult IT to be a larger strategic partner for the enterprise; • Innovate around the charge mechanisms – by changing the measurement mechanisms and move towards more and more variable pricing model – the benchmark here would be to identify cost of service that business consumes; • Heavy automation of IT functions with ability to self monitor and correct thereby increase IT reliability that business experiences. Forward looking enterprises have their IT focused on leveraging cloud to create more value for business by changing the processes, technologies, level of dependence on IT

A combination of factors like new investments, higher degree of automation, new business models etc go towards getting more value from IT. True cost of operations that can come out of redefining the measurement system helps both business & IT to optimize resource allocations and plan better for growth. The loft goals set by CIO’s in general revolve around being the change agent for growth and being able to transparently provide benefit analysis enhances the stature of IT inside enterprises and play a defining role in future –proofing their roles inside enterprise.

The first part of the article appeared here

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Thursday, November 08, 2012

Enterprise IT : Future Proofing Vs Failure Proofing - Part 1

Just returning from an intense workshop with a customer on their future IT plans on spending and mode of operation . The meeting reinforced amongst other things that in the world of business, in some pockets men and women who are smart otherwise somehow fail to fathom the complexities in the area of business processes and therefore fail to provide for efforts needed to drive transformation inside their respective enterprises. Substantial number of executives regard technology and process evangelists as “ silver bullet holding parachute jumpers ” – people who land from sky and offer them their so-called “silver bullet” solutions. Are process transformations touting cloud evangelists in this category? Perhaps. If they influence the organization sufficiently to look at powerful enabling technologies and intertwined processes as the harbinger of innovation. Seasoned business and IT executives have a way of managing such class of consultants – they simply turn off on such views. Cloud services evangelists, however, are a much bigger problem because they proffer pervasive organizational disruptors – preassembled bundles of people, processes and technology – not plain technology point solutions. One of the fascinating aspect of cloud solutions had been the unexpected empowerment of business in embracing state of the art solutions at varying scale promising piecemeal to holistic organizational disruption to executives throughout the enterprise. In a number of occasions, IT is forced to act under compulsion aka align to the business identified/owned initiatives. The IT department inside every enterprise needs to buckle up. The changes are going to be far more sweeping than imagined and the balance of power could be seen to be decisively swinging towards business. The hold that IT had on provision of services for enterprise is certainly getting weaker atleast in respect of new initiatives/transformation centric initiatives. In such a context, IT inside every business need to map out their own vision and draw programs to maintain their leadership and in some cases their relevance inside the enterprise. Have no doubts.The IT department must change its outlook to retain legitimacy and authenticity inside the enterprise.. It is being challenged in its role as the key provider of services for the business in the enterprise and clearly a new crisis of relevance is popping up – the IT departments need to respond comprehensively with a solidified plan.

This is quite paradoxical but unfortunately very true. The IT industry has traditionally enjoyed (at least in the last 10-15 years) as the pace setter for introducing change and ushering innovation – be it in terms of enablement of core business, or powering new models of business or in terms of supporting existing mode of business more efficiently. Inside many enterprises, keeping step with the changes in the fast moving IT industry solutions were mostly challenging for business – be it in terms of technology, mode of operations or being more efficient, more agile - all direct contributors to business success. It has been a constant practice to see that executives being in the back foot desperately trying to catch up while implementing yesterday’s wave of innovation enabling technologies while noticing the next distracting wave of today while awaiting/ thinking through the next wave of innovations that are in the anvil.

In doing all these things, many businesses are tempted to call vendors and the evangelists selling/propounding new solutions as FUD agents thriving on creating confusion with the promise of an ever increasing range of new and sometime innovative solutions. In this journey, some executives inside enterprises look at cloud technologies as very appealing as it promises: A. Progressive investments as the solutions rolls on; B. A huge swathe of hitherto unimagined levels of control to business, sometime s even bypassing internal IT. All well here, but for the vendors over-hyping the benefits of narrow solutions and they typically tend to highly understate the costs, risks and complexities of implementing such solutions. Traditionally IT initiatives backlogged organizations (in terms of IT/Process adoption), are naturally attracted to such vantage propositions - so much so , overtime, enterprises begin to understand how an hasty adoption based on such promises could inter alia cause more harm outweighing the potential good. Most IT executives have, however, worked out ways to manage these good samaritans. They ruthlessly control the enterprise IT strategy and procurement activity. Some find innovative (originally unintended) defenses in the form of the mantra of “consolidate, rationalize, standardize, retrofit, retire, re-factor” as a defensive shield. With such a powerful fortress, their way of managing is to not entertain details discussions of these tastes of the day advances thereby protecting their turf.

But it’s always a tussle between future proofing an enterprise Vs failure proofing an enterprise. This new age proponents of advances Viz Cloud services have a different way of interjecting themselves inside enterprises – they are changing the rules of the game which had traditionally empowered the IT departments. They now directly deal with / create a sphere of influence much beyond the defensive fortress of IT divisions. The nature of the beast( cloud services) is such the reach can’t be stalled - like some aroma that appeals to the olfactory senses even without being visual, cloud services parade themselves of having greater transformative potential with far reaching benefits than the bare bone cloud technologies from which they are assembled. This calls for a calibrated response to leverage their true strengths. Fresh perspectives are needed to manage the onward journey of cloud powered transformative services inside the enterprise.

Let’s now characterize what makes the cloud services so powerful in their appeal and reach.The first and foremost characterization of the cloud services lay in the fact that a mature, enterprise-grade cloud service is vastly different from traditional IT / Business solutions – an evolved cloud solution brings together a nice combination of pre-assembled/ custom bundle of people, processes, and technology – rather than a new technology building block. The appeal of the cloud services is not just in its raw power – but in using the advances in technology to provide differentiated services enabling new ways of working for the adopting enterprise. In doing this, they seem to override the carefully built plans centered around strategy & architecture and extending further in some cases , the cloud replaces the traditional IT’S role as a provider of compute, storage, network (infrastructure) and application services. Why are these services so different and how different ate these form the other advance that the IT industry keep rolling out. The cloud services in full display of their might do indeed pose a significant challenge to the in-the-comfort zone- status-quo seeking IT department . Typically status quo manifests itself as internal sub-scale, under-invested, and under-skilled/ hardwired IT shared services arrangements. A deeper assessment shows that compared to a range of many prevalent enterprise shared services, in a number of cases, the leading edge cloud services are better optimized shared services that actually deliver better bang for the buck, more flexible, and bring in empowerment to enterprise and their customers. This takes the myth head on: flexibility and choice can’t co-exist with economies of scale and a wide range in functionalities. It will behoove enterprise and their IT to seriously assess suitability of cloud services for their immediate and future needs and not dismiss them off hand. They need not be resisted but should be considered for suitability.

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