Posts

Top 5 Problems Companies Seek to Address with Big Data

The Big Data trend is sweeping across every industry – and companies everywhere are keen to learn more about the subject so they can better understand what it can do for their business.

Gartner, as you might expect, is very much at the forefront of bringing fresh insight into the subject. And it seems from a survey report they released earlier this year that there is good reason for this. Even though the Big Data concept has really only taken hold in recent times, their research suggests that 64% of organisations are now planning to invest in Big Data solutions within the next two years (news that is almost certain to keep Big Data in the headlines for several years to come!).

Although actual adoption of Big Data technologies in the here and now is still in its infancy (8% according to the Gartner research), there are a wide range of business challenges that have the potential to be transformed. In this post, we take a look at the top 5 business problems that are highlighted as areas which companies are looking to address through Big Data solutions.

1. Enhancing Customer Experience
There’s a growing body of research which suggests that businesses who invest in understanding their customers better can outperform their peers by a significant margin – and Big Data technologies can play a pivotal role in this understanding.

The entire Big Data concept as it relates to customer-centricity lies in taking multiple sources of information, aggregating it, and using it to produce real-time business insights that deliver improved insight into customer behaviours. One of the early adopters of Big Data is the retail industry. As an example, by using Loyalty Card data combined with other sources of information, retailers can quickly track and record what their customer’s habits are. This helps them to predict which discounts or promotions would have the most likelihood of enticing them back to their store. The result? Improved customer retention, increased add-on sales and improved brand awareness. Retailers with more advanced mobility enhanced systems can even run these types of discounts and promotions when the customer enters their shop, helping to increase average transaction size with real-time offers.

2. Process Efficiency
Achieving process efficiency is the Holy Grail for both manufacturing and service organisations alike. However, this has been difficult to achieve in the past since there was no way to capture huge, disparate data sets for processing and analyses. A simple activity like month end closing used to produce financial statements is a great example of an onerous, iterative challenge experienced by many organisations. This is simply because of the lack of tools and technology available to process huge sales data multiple times, from many different sources and data feeds. This leads to an inability to aggregate and allocate costs being incurred through various sources and to crunch the numbers to produce figures under the various heads in financial statements. Appropriate use of Big Data technologies can reduce the time taken to perform month end closing activities from days to hours!

3. New Product Development
In their 2013 Innovation Monitor report (*subscription req’d), the British Manufacturers’ Association – EEF – revealed that 75% of manufacturers believe that speed to market is more important than it was in the past.

A key factor that’s driving this need for speed is that in today’s global marketplace product lifecycles are shorter. Competition from previously low cost manufacturing bases has started to intensify, with companies in these countries increasing their own levels of innovation in order to move up the value chain. As these competitors start to innovate more so the product lifecycle is shortened as technical edge is lost to other, newer ideas.

Deploying applications that can analyse Big Data sources can help build an overall picture of consumer demand and help identify market gaps that might be filled with a new product or business service innovations In addition, having an iterative, constant flow of real-time data means companies can be increasingly responsive in adapting their product developments to the needs of the market today – and they can gain that all important first-mover advantage when taking new products to market.

Another key advantage is that product development also requires a certain amount of time in research labs – be it a physical product or software. Big Data technology can potentially help in simulating various outcomes during the development phase or in analysing various test results quickly which of course allows for course correction actions before it’s too late.

4. Targeted Marketing
Gaining the tools needed to analyse Big Data stores means companies can more quickly and efficiently segment and analyse patterns, trends and sentiments that help them better understand buying behaviours. For example, banks and financial institutions are using insights gleaned from daily transactions, market feeds, customer service records, location data and click streams to create new business propositions and improve their go to market strategies.

Access to this kind of information means an opportunity to make better targeted marketing approaches – much faster than ever before. In a recent Guardian article on the subject of Big Data, Matthew Bayfield, group director of data for marketing agency Ogilvy EMEA said: “The new way of thinking about [data] is more like trying to read the river, you’re trying to spot patterns. There are numerous pots of information that exist in a digital ecosystem that [companies] can tap into to try and understand more about the consumer and what the consumer wants.”

The greater the visibility of data, the greater the opportunity to market successfully. And, with more and more consumers using digital technologies, the more important a solution that addresses that challenge becomes.

5. Cost Reduction
We normally think of Big Data solutions as expensive, so you may be surprised to see cost reduction at 5th on the list. Even though the initial outlay for a solution can seem expensive, the benefits of deploying such technologies can help to reduce cost in other areas of the business. For example, eBay use SAP’s latest Big Data innovation – the SAP HANA Platform – to manage foreign exchange and improve the hedging process. By using analytics solutions powered by the SAP HANA platform, eBay gets a complete view of cash across its entire organisation – meaning they can drive proactive currency management, increase profitability, and improve operations. This has resulted in estimated savings of $40M per quarter from better decision making on currency hedges based on real-time data and trend analysis.

Invenio Business Solutions work with one of the most talked about Big Data products in the market today, SAP HANA. SAP HANA can analyse huge quantities of data in real-time, meaning companies can get instant answers to questions and use the insight to improve multiple areas of the business.

Invenio’s SAP HANA Lab allows us to create test scenarios that enable clients to experience what they can achieve using Big Data solutions before they embark on an implementation. For more details on how we can help you achieve success using Big Data, please contact us.

Locked-in. Calling Time on the Multi-Year Support Contract

The challenging economic climate of recent years has affected every one of us. Businesses large and small have had to face the consequences of the credit crisis, and tackle issues that no business continuity plan can prepare them for. We’ve seen the demise of many household names and, despite a recent uptick in many country’s economies, some industry commentators suspect there may be more to follow.

For IT executives and their teams, delivering ‘business as usual’ support through these challenging times may feel like a bit of a misnomer. But, whatever the economy is doing – whether it’s up, down or stagnating – IT still must provide stable, robust systems that can cope with the rigours of an ever changing environment. Many IT departments have coped admirably in balancing a flatlining budget – ensuring that maintenance and support costs are kept in check and investing only in projects where a good return can be made.

One challenge that does seem to persist for many IT executives however, is in the effective renegotiation of multi-year extended support or services contracts that no longer reflect their business reality. These contracts lock-in IT departments to an agreed set of services delivered over a period of several years.

Extended Contracts – the Upsides

Extended contracts are often a result of having agreed terms in better times when planning horizons were longer and companies more confident of long term performance. Indeed, agreements for support services that span several years do seem like good business logic for many reasons. For one, the total value of the contract is usually offered at a highly preferential rate, as the longevity of the contract provides a service partner with guaranteed revenues across the period of several years (meaning that they don’t need to incur cost in finding new business). It also helps the service partner to plan their workforce more efficiently and allocate resources in a more predictable way. For the IT Department, not only is the price more attractive, but the contract longevity means that once the knowledge transfer is complete, it’s a task that doesn’t need thinking about for some time.

The Renegotiation Challenge
In today’s uncertain business climate there can be significant drawbacks to signing a multi-year agreement. Renegotiating the terms of an existing contract due to a change in business conditions is very difficult unless there is some kind of ‘quid pro quo’ factored in – a recent example of which can be seen in the HMRC Aspire contract which was recently renegotiated to include an extension until 2017.65Percent

Indeed, the findings of a survey carried out by sourcing company Alsbridge in June 2013 concluded that almost two thirds of senior IT executives do not think their suppliers would be open to renegotiating IT decision makers outsourcing contracts. The survey, based on the inputs of 250 senior IT decision-makers in mature European markets, said that 65% of respondents believed that suppliers would not be open to renegotiating and 48% think the suppliers would ‘kick up a fuss’ if asked to renegotiate.

Commenting on the findings, Alsbridge Managing Partner, Rick Simmonds says: “…if the business need or the technology world has changed, then it is incumbent on suppliers to be receptive and not keep their clients in the stranglehold of an outdated contract”. The survey findings however, suggest this is not always the case.

In a similar vein, an article in Computer Weekly on the subject of contract renegotiation cites the economic conditions as a driving force that is seeing many buyers looking to cut costs and improve the performance of services suppliers. Kit Burden, head of technology sourcing at law firm DLA Piper said: “As a customer’s business has constricted during the recession, the pricing regime hasn’t flexed as much as intended and so the deal has become uneconomic”. Economics alone however, is not always the key driver for renegotiation, with Peter Schumacher, CEO at management consultancy Value Leadership Group, pointing out that “A typical problem is that incumbent suppliers – offshore and traditional – become complacent over the years. Contracts are often renegotiated or a second supplier introduced to keep the prime supplier on its toes and create a wake up call”.

Calling Time on the Multi-Year Contract

There are a number of ways in which companies can attempt to extricate themselves from contracts that are delivering on neither value nor performance, but it’s not always straightforward, and in almost all cases, it will involve some goodwill on the part of the supplier. There is plenty of advice available online, and of course there are many professional service companies and law firms specialising in just these issues for those who are currently considering their options.

Moving forward however, there is a way to eradicate the issue altogether – and that is not to sign a multi-year contract. Sounds simplistic and actually, it is. At Invenio, we encourage our customers to opt for a one year contract period. For customers who prefer the security of a contract that maps out service and support provision across a five year period, we simply insert a break clause that clearly states the customer is free to curtail the contract at any time – with no penalty. Crucially, whether it’s a one – or five – year contract, the cost is the same (thereby alleviating any concerns about whether or not a customer has secured the best deal for their company!).

A ‘no lock-in’ policy brings other benefits too, in that our support teams must be at the top of their game – day in and day out. There is no room for complacency to set in and therefore no cause for our customers to terminate their agreements with us. The result of this approach is that all our customers have had the freedom to choose our SAP support services over many years – and all of them have chosen to stay with Invenio.

Whilst this may be a radical departure from the norm – we think it’s a good one. After all, supporting ‘business as usual’ sometimes calls for an unusual approach.

In our next piece we’ll be taking a closer look at how those involved in ‘business as usual’ can help minimise the disruption of a new system implementation.

 

Top 3 IT Challenges to Delivering a Successful Big Data Solution

In a previous post we spoke about the anticipated growth in Big Data and Analytics over the next 5 years, according to research from the IDC. Continued on from this, here are the Top 3 IT Challenges that the IDC considers could hinder the success of a move Big Data and Analytics if not sufficiently addressed:

1. Lack of Sufficiently Skilled IT Staff and Cost of Technology
IT Directors today need to show a good return on investment from new technologies and so must have a very clear idea of what the business can achieve with Big Data. In addition, employing and maintaining the right skills in a highly competitive market also needs to be factored into the cost of embarking on a Big Data project and so, again, IT Executives must have a clear idea of these costs to assess the return (and indeed the viability) of Big Data.

2. Managing Data Quality
The information you get out of any system is only as good as the information you put in. Data quality problems usually arise because no one person is responsible for the complete “data picture”. Without a central custodian ensuring that all data, across all systems is correct, consistent and up to date, the quality of data can vary significantly from one system to another. Of course, this isn’t a problem that’s new to Big Data – but nevertheless it is an important point to consider when assessing the viability of a Big Data project.

3. Data Integration
Another age-old problem that IT functions will be very familiar with is that most organisational data is highly fragmented. This creates challenges at several levels when embarking on a data integration project of any nature: syntactic (how do we define a common format for our data?), semantic (what are the agreed definitions?) and political (who ‘owns’ the data?).

While the above factors do indeed pose a challenge to CIO’s, they are not insurmountable. Indeed, the benefits that Big Data offers will, for most organisations, considerably outweigh these challenges.

It is often quoted that some 90% of the data that exists today has been created in the last 6 years. This data explosion, combined with the rising sophistication of analytical tools and the speed offered by Big Data technologies, means companies should be addressing these challenges sooner rather than later to ensure they can maintain competitive advantage.

Next week we will be looking at the top ten verticals signing up for big data and analytics. Sign up to receive this next post straight to your inbox.