Big data - requires cultural changes for success

Much has been written lately about ‘big data’ being the next big thing in business. There is no doubt that the explosion in data being collected by organisations opens opportunities for exploitation, especially if you can exploit it quicker than your competitors. However just deciding to trap and analyse 100 terabytes of data does not make an organisation expert at ‘big data’ or guarantee any competitive insight will result. In many companies the only real experience with large quantities of data and its use is through the finance team. The problem with the accountants is that they treat data in a ritualistic way (remember the comedy sketches of accountants making sacrifices to the god of balanced books?) so that vast quantities of the data they tend has little relevance to the organisation. To a lesser extent marketing also use data extensively though often those number are externally summarised so the nitty gritty of data management is avoided. Also most people are very weary of data and statistics, the political misuse of statistics has a lot to answer for.

All of this means that without considerable effort an organisational initiative to hop on the “big data” bandwagon is doomed to failure. Having spent 6 years of my life championing data management and analysis in a large multinational organisation here are a few suggestions to improve the chance of any ‘big data’ project:

1. Reverence for data – everything else in this list really reinforces this point. Data needs to be taken seriously to be effective. Discounting it should not be done lightly and there should be good reasons for ignoring data.
2. Culture of data accuracy – “garbage in - garbage out” is as relevant today as it ever was. Big data will only ever be useful when everyone involved in its collection puts a priority on it and is fastidiousness in ensuring quality, accuracy and timeliness of data inputs.
3. Trust the data – many a plane has crashed because the pilot decided that the instruments were wrong and they knew better. Once the systems have been set up and data validated it should be believed, nothing erodes the value of data quicker than discounting it because it tells us something we don’t want to believe.
4. Don’t shoot the messenger – when profit is sinking do you blame the finance team for recording such poor results? Data is often used as a scapegoat when times are tough, it is nothing more than a tool.

Effective use of data therefore, is dependent on a positive organisational ‘mind set’ towards the value that the data can bring. All the latest analytic tools, consultants and trends will not mean a thing, indeed will be a big waste of money unless the organisation is willing to change its mindset and accept the value of data.

David Gwillim
Exploring the value of IT to organisations
email: david.gwillim@optusnet.com.au
blog: http://www.businessitvalue.blogspot.com/

Knowledge is power and the fallacy of open communication

Being a keen observer of managerial behaviour I have always been perplexed by the paradox displayed by many managers when it comes to open communication. Most managers want their staff to be open in their communication with a “no surprises” policy but actively vet and manage any information they provide to their superiors who inevitably demand the same open information. I have even dealt with a CEO who rabidly demanded open information from his team then furiously controlled and manipulated the information he provided to the board of directors.

I often wondered how the managers in question thought this behaviour was reasonable, after all it is not exactly leading by example is it?

Of course seen through the lens of power and politics this behaviour makes perfect sense, information asymmetry is very powerful, our market economy and all political systems are built on this principle.

But is it leadership and will it stand up to the challenges of a networked economy? The answer is probably yes, even where a leader shares openly with their team, the team can develop an information advantage over other teams through information asymmetry. I am still uncomfortable with this idea though, how does it reconcile to leadership quotes such as the following Chinese Proverb “not the cry, but the flight of the wild duck, leads the flock to fly and follow”?

David Gwillim
Exploring the value of IT to organisations
email: david.gwillim@optusnet.com.au
blog: http://www.businessitvalue.blogspot.com/

CIO’s – Who do you report to? Does it matter?

The CIO industry press often states that who you report to does not matter and that it is possible to lead and be innovative from any reporting line within a company. The evidence suggests otherwise. My own research http://businessitvalue.blogspot.com.au/2011/11/is-your-it-team-strategic-or.html shows that organisations that use IT strategically always have the CIO reporting in to the CEO or is a member of the executive team. The current trend of shifting the CIO under Finance in many organisations indicates a view that IT is not strategic but operational and a cost to be minimised.

New research published this week by Price Waterhouse Coopers (PWC) adds to the evidence that reporting and organisational structure is important and does determine the role and effectiveness of IT in the organisation. They found that high performing organisations (25% of the 489 surveyed organisations) were twice as likely to have the CIO reporting to the CEO than other organisations, indeed they considered this essential to the effective use of technology. In these organisations IT regularly delivered on business needs.

They conclude that “unlike the predictions of some pundits who say IT is commoditizing, we see that those IT organisations that can effectively serve both their customers and their firm, deliver projects on time and on budget, and distil mountains of bits into meaningful insights are as rare as ever. In this way IT’s ability to drive business value is becoming more – not less – differentiated.”

With the rapid changes in technology, and even more rapid changes in technology use (think social, global, individual) the opportunities to gain competitive advantage from innovative use of IT has never been greater, for organisations willing to integrate technology into their strategy and recognise the CIO’s pivotal role in helping the organisation through the reporting structure the potential rewards are immense. Who do you report to?

The PWC report can be accessed at:
http://www.pwc.com/us/en/advisory/2011-digital-iq-survey/index.jhtml

David Gwillim
Exploring the value of IT to organisations
email: david.gwillim@optusnet.com.au
blog: http://www.businessitvalue.blogspot.com/

Are standards destroying IT governance?

Fundamentally, governance is “the exercise of authority” (Dictionary.com), this is operationalised as who can make what decisions, also called ‘decision rights’. Through the allocation of ‘decision rights’ the directors/owners of a company exercise control (to the degree that they choose to) over an organisation (corporate governance). IT governance is essentially the same (being a subset of corporate governance) with a focus on the IT assets of the company.

Governance applies (with differing decision rights patterns) regardless of the organisational structure or objective. Governance exists in an organisation regardless of whether it is a tightly controlled, highly centralised company, a large bureaucracy or a loose alliance of semi-independent actors. Why then is governance and IT governance in particular considered a stifler of innovation, agility and new forms of organisation?

Perhaps it is because those on the IT governance gravy train have found value in systemising governance and IT governance in particular into a series of standards, processes and methodologies which an organisation ‘has to have’ to have good governance. ISO 38500 “Corporate Governance of Information Technology” was issued in 2010 based on the world’s first IT Governance standard AS8015 issued by Standards Australia in 2005. It contains six general principles for IT Governance which are intended as guide for organisations of decisions to consider. This however has become an umbrella standard and IT Governance has become (according to the influential IT Governance UK organisation) defined under the Calder-Moir framework as consisting of 6 exhaustive ISO standards and no less than 25 complex frameworks and methodologies. Just one of these frameworks is CoBIT which alone has over 300 ‘control points’ in order to manage an IT system. If implemented in its entirety the Calder-Moir framework would bury an organisation under a weight of process and policy that it would never recover from. No wonder managers and employees have negative views of IT governance.

It is time to return to the fundamentals of IT governance, not just to revive the efficiency of today’s organisations but so that it can play its rightful place in emerging forms of organisation that seek to avoid the bureaucratic and sole destroying impost of traditional command and control organisations. Governance is not the enemy.

David Gwillim
Exploring the value of IT to organisations

email: david.gwillim@optusnet.com.au

blog: http://www.businessitvalue.blogspot.com/