Big Data – Extracting Value

 “Most companies only capitalise on 5% of their in-house data”

This was the message at the leading Big Data Summit 2012. In a presentation from Forrester Research it was identified that most financial organisations are unable to extract and exploit the true value from the vast amounts of information they hold.

Big Data is often used to describe the vast data sets that are too large and too complex to be processed by conventional means. In a previous post (http://ianalderton.com/?p=484), I defined Big Data as

Volume – from hundreds of terabytes to petabytes, where a petabyte is equivalent to 500 billion pages of standard printed text.

Velocity – up to near real time sub second delivery

Variety – including both structured and unstructured data

Volatility – hundreds of new data sources coming online from new apps, web services and social networks

The key focus for Big Data is Value in order to drive new competitive insights.

Value – the opportunity to define new operating models and products based on customer insight and intelligence

In this post we will discuss how to increase value from Big Data to enable companies to utilise more that 5% of their data assets and directly increase customer insight, intelligence and information to drive competitive advantage.

Extracting Value
At the Big Data Summit 2012, Holger Kisker (Principal Analyst, Forrester) reported that companies are unable to extract value and exploit commercial insight from the vast amounts of data they hold on products, customers, research and market trends.

Looking at this in more detail, the volume of data available is truly staggering and is measured in Zeta bytes (1021 , bytes) as illustrated in the following schematic.

Source: Sept 20, 2011, “Understanding The Business Intelligence Growth Opportunity” Forrester report

The vast majority of information available to companies is historical data. This comprises of the traditional reporting, such as structured databases and reports, as well as the unstructured data that is available both internally and external to the organisation in the form of emails, phone calls and online content. This historical information far exceeds the information being generated now and in the future.

To be successful in this new data world, financial institutions have to realise that they are in the data business and that data is their biggest asset.

Dark Data
The vast majority of information is dark data – this is data that is either under-utilised or mothballed.

In a world where we are over run by dark data, whether it is social, machine data or location data, the ability to extract value and develop new products and operating models based on deep customer insight and intelligence represents a new form of competitive advantage.

Value is focused on forecasting, trend spotting, developing new products or detecting fraud in real time. Underpinning this is the ability to build a 720◦ view of your customer.

The 720◦ Customer


To capitalise on company data, organisations need to extend the internal customer view to include an external perspective. Specifically, organisations need to build a 720◦ view of their customers to unify the internal view with the client’s external social and influencing network, such as Facebook and Twitter.

As an example, British Airways is delivering a targeted and personal touch through its “Know Me” programme by researching passengers and building a unified view of the customer. The “Know Me” programme will use Google images to find pictures of passengers so that staff can welcome them by name as they arrive at the terminal or plane. This is the kind of individual service, providing a unique and personal experience, that we all aspire to receive.

By building a 720◦ view of their customer, companies such as British Airways will drive new opportunities for revenue uplift through mass customisation, offering benefits such as individual prices and targeted offerings based on predicted behaviours and location based services.

Data Exhaust

An exciting by product of Big Data is Data Exhaust. This is the unstructured information that is a by-product of the online activities.

Google applies the principle of data exhaust to many of its services. In a world where Microsoft spent several million dollars developing a spell checker, Google developed a leading spell checker , in every language, based on the mis-spellings typed into its search engine. The Google spell checker was developed on the by product of Data Exhaust from its online search engine.

Collecting and analyzing data exhaust can provide valuable commercial insight into the behaviour, actions and aspirations of your clients. Re-using data exhaust to improve a service or create a new product will be a new form of competitive advantage for those organisations embracing Big Data.

Conclusion
The debate on Big Data is often focused on the underlying data volumes or the new innovative tools and techniques. As I’ve highlighted here, the real opportunity and critical success factor is VALUE – how to extract value and exploit the information to enable better informed decisions and strategic outcomes.

Only by pulling data together from different structured and unstructured sources and developing new ways of processing, such as the 720◦ Customer and Data Exhaust, can organisations successfully develop new seams of competitive advantage and harness the 95% of untapped Big Data resources.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Financial Times Interview


The Financial Times have just published the video of  an interview taken when I was CIO Corporate Banking at RBS.

As part of a leading CIO Series, I was interviewed by Paul Taylor ( US Business Technology and Telecoms Editor, Financial Times ) for my views, insight and expertise on the post crisis rebuild of the financial services technology sector ( www.t.co/Ha2UR1QH ).

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Top Key Skills Needed For Today’s CIOs (Part 4 )

In my previous posts on key skills for today’s CIO, I discussed Visionary & Strategic Leadership, Building High Performing Teams alongside Operational and Technical Excellence.

In the final post of this series, I will explain the principle of Detailed Product Leadership.

Detailed Product Leadership

Product Leadership is the concept of radically innovating products, markets and business models to deliver customer led innovation and competitive advantage. In other words, it’s all about becoming a trusted advisor to the business that is truly passionate about the client, its business, products and services.

Product Pioneer
To support this pioneering journey, IT is a critical enabler for both internally and externally focused innovation including re-inventing and repositioning products in the market place. In a world where credits & debits are highly commoditised, innovation has to focus on new products & services, such as digital wallets and cashless payments, through to social CRM and big data.

In today economy, this can only be achieved by conducting a product / service profitability analysis to capture customer desires, supply chain demand with emerging trends and marketing analysis, to reveal rich seams of undiscovered customer needs.

This wealth of information can be mined to reveal unmet needs and customer sentiment, leading to a radical innovation of products, process and business models.

Mandate
CIOs that want to become true product pioneers will need to drive business strategy and innovation coupled with a deep customer understanding.

This will be achieved by focusing on:

  • Market Knowledge – being passionate about the business. Knowing the industry and the competitive environment.
  • Strategic Orientation – aligning the technology vision to meet both the short and longer term goals of the business.
  • Commercial Orientation – understanding the cash and capital requirements to drive both top line revenue growth and bottom line earrings.

Analytics & Dashboards
This can be supported by developing a culture of analytics to measure everything you can, including dynamic dashboards to generate real time insights up and down the value chain.

In my experience, this will lead to improved real time decisions based on improved analytics and business case monitoring to evaluate ‘best of breed’ v ‘best of need’ solutions to deliver an enhanced product proposition.

Summary
Detailed product leadership is focused on making things happen. It’s about becoming a trusted advisor to the business, to weave IT and business strategy together, to radically innovate products and markets to deliver a concrete value proposition to both the business and its customers.

In this series, I have discussed the top key skills that are needed for today’s CIO. In the current environment, things have to happen differently. To be successful, CIOs have to exceed and out perform in the 4 top key skills of :

  • Visionary & Strategic Leadership
  • Building High Performing Teams
  • Operational & Technical Excellence
  • Detailed Product Leadership

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Top Key Skills Needed For Today’s CIOs (Part 3)

As the third post in the series of “Top Key Skills Needed For Today’s CIO”, in this article I will be discussing how to drive value through Operational & Technical Excellence.

Operational & Technical Excellence
In the current economic climate, organisations are being increasingly forced to examine opportunities for cost compression and complexity reduction to drive business growth.

This can be achieved through a process of operational and technical excellence across technology and the wider business organisation.

Central to this is a clear understanding of the business dimensions through defined corporate goals and objectives. Only by looking at the business domain can the CIO identify wider issues, identify opportunities and resolve business challenges.

Increase Organisational Effectiveness
To drive enhanced real times decisions across the organisation, CIOs need to radically simplify business processes. This process simplification needs to be achieved from the point of view of the end customer as opposed to the business owner. It should focus on stream lined operations, industrialised processing and organisational effectiveness.

This will need to be achieved through a detailed focus on cost control alongside the rationalising, renewing and consolidating of application hardware portfolios. In parallel is modernisation and potential outsourcing of non critical IT functions.

Dashboard
Delivering value through operational and technical excellence requires an investment management approach.

Key to this is identifying and capturing key indicators and metrics to detail the investment story. This will include measuring all key indicators, both quantitative and qualitative, from return on investment through to total cost of ownership.

By using an investment management approach, as opposed to a typical Red/Amber/Green ‘RAG’ status, the CIO has the opportunity to map IT metrics onto business KPIs. The mapping of IT metrics will then be directly linked to strategic objectives and business outcomes.

Summary
Driving value from Operational & Technical Excellence requires a concrete value proposition for the organisation to drive top live revenue growth and bottom line earnings. Processes need to be reengineered to provide scale and elasticity centred on the customer proposition and benchmarked using investment management performance indicators.

In the next post, I will discuss Detailed Product Leadership.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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“Top 25 Social CIOs in the Fortune 250” Awards

Forbes the leading publication for the world’s business leaders (www.forbes.com), provides real-time reporting and concise analysis for the global business community.

As part of a leadership feature on social business transformation, Ian was given the prestigious international award of number 4 in the ‘Top 25 Most Social CIOs in the Fortune 250’ (www.onforb.es/HjwP4K).

Ian was recognised along with Oliver Bussman (Global CIO, SAP), Benjamin Fred (CIO, Google) and Abraham Galan (CIO, Pemex) as one of the leading global CIOs driving social business transformation from the Fortune 250.

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Top Key Skills Needed For Today’s CIOs (Part 2)

In my previous post “Top Skills Needed For Today’s CIO” I discussed Visionary & Strategic Leadership.

In this post I will be looking at the key CIO skills to Build High Performing Teams that are lean, agile and highly focused

Building High Performing Teams
To succeed in building a high performing team, there are a number of critical competencies that the CIO needs to develop across the technology organisation. These include

  1. Strong Customer Focus
  2. Commercial Orientation
  3. Team Motivation

1. Strong Customer Focus
In my experience, all high performing teams need to focus on treating the business as a true client and manage the technology organisation as a business.

This can only be achieved by generating energy and enthusiasm to understand the client’s business, their commercial drivers and pinch points through to the client’s products and supported services.

The technology organisation will need to be truly passionate about the organisation, its commercial drivers and cash flows. This includes demonstrating a deep understanding of how the financials for IT work, the costs / benefits of the IT investment and how this compares with other investment opportunities.

Only by building inspired client relationships with the business can the technology organisation become a true trusted advisor and exceed customer’s expectations in today’s fast moving, global market place.

2. Commercial Orientation
Strong commercial orientation is critical for all leading technology organisations and is often overlooked.

Only by understanding what the commercial hot buttons are, coupled with a detailed understanding of the technology landscape can you become a valued and respected trusted advisor to the business.

Direction should be focused on inspired conversations with the business and the commercial insight to recognise that you understand their business, the products they trade and the positive impact that technology investment will have on top line revenue growth and bottom line earnings.

Only by being on top of your game both commercially and technically, can the IT organisation build inspired relationships as a trusted advisor that are critical to the success of the business today, tomorrow and in the future.

3. Team Motivation
Creating a high performing team requires an environment where all members of the team feel valued and that their contribution is recognised.

Staff need to have the opportunity to discuss the bigger picture. Key to this is regular and timely briefings to discuss the commercial picture, the strategic drivers and the business value that the technology organisation will deliver. This can be achieved through town halls, leadership briefings and deep dives.

Deep dives gives the individual the opportunity to showcase their expertise and increase the overall knowledge of the team.

For the individual, there needs to be a clear value proposition – what are their personal drivers and how can the organisation meet those needs both in the short and longer term. This is underpinned from recruitment – from hiring for attitude and training for skills, through to an established talent & performance management programme that nutures and develops expertise across the technology organsaiton.

Summary
Building a high performing team requires a new value propostion from the technology organsaiton.

This need to be driven by strong customer focus, detailed commercial orientation and exceptional motivation to leverage the true value of technology and its people. This in turn drives business strategy, innovation and competitve advantage.

I look forward to your comments on Building High Performing Teams. In the next post I will discuss Operational & Technical Excellence.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Top Key Skills Needed For Today’s CIOs (Part 1)

In today’s business landscape CEOs are increasingly focused on top line revenue growth and bottom line earnings along with increased pressure to execute at speed and scale. Business executives are now looking to their CIOs to drive growth and competitive advantage.

To succeed and outperform in this environment, today’s CIO need a number of unique skills:-

  1. Visionary & Strategic Leadership
  2. Building High Performing Teams that are lean, agile and highly focused
  3. Operational & Technical Excellence
  4. Detailed Product Leadership

In the first of a series of posts on key skills for today’s CIOs, we discuss Visionary & Strategic Leadership.

1. Visionary & Strategic Leadership
From talking with many CEOs, all organisations have the same challenges. Their capabilities overlap through growth and acquisition resulting in process / service duplication driving up costs.  In addition, after successive waves of cost rationalisation, companies are struggling to find the next big efficiency.

Companies are seeking CIOs that can deliver competitive advantage through increased business alignment, strategic innovation along with increased business skills.

Increase Business Alignment
For organisations to succeed in today’s market place, the focus needs to be on Intelligent Growth comprising of:

(i) Customer experience innovation

(ii) Permanent cost & capital management

(iii) Streamline operations and increase organisation’s effectiveness

Technology and business strategy needs to be aligned and woven together to meet both the short term and longer term objectives of the business.

Strategist and Innovator
As a strategist and innovator, CIOs have carte blanche authority to develop processes, markets, departments and structures to generate competitive advantage. The CIOs that are visionaries and risk takers will benefit most from current opportunities.

CIOs will need to look outside of the normal technology domain and focus on products, markets and business models.

Several key areas include cost and complexity reduction, modernisation of non critical IT functions along with product and process simplification to drive improved real time decisions.

Business Skills
Businesses are increasingly looking to their CIO to drive growth and competitive advantage. Technology leaders are required to possess business skill sets in order to transform the technology organisation and change the technology / business industry value chain.

This can be achieved through inspired relationships by creating new and stronger connections with end customers and key stakeholders in the value chain.

CIOs will need to communicate IT performance in business relevant language using investment terminology to define the value contribution to deliver a concrete proposition for the organisation.

Summary
In today’s demanding landscape, CIOs need to be bolder, leaner and more focused.  Only by increasing business alignment and driving strategic innovation, coupled with new business skillsets, can they exploit leaner, more focused opportunities up and down the value chain.

In my next post I will look at high performing teams for a lean, agile and highly focused technology organisation. For now, take the time to review the visionary & strategic leadership aptitude for your own organisation and let me know your comments.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Big Data – The Next Frontier

Big Data will be the next frontier for innovation, competition and productivity according to a recent report from McKinsey (http://bit.ly/tE7fiZ).

According to McKinsey :

30 billion pieces of data are shared on facebook every month

40% growth in global data, year on year

And by 2013 :

14% of business intelligence (BI) deployments will combine BI, collaboration and social media in to decision making environments.

33% of business intelligence functionality will be consumed via hand held devices

Big Data describes the data sets that simply cannot be tackled using traditional database and business intelligence tools.  In my opinion, Big Data is best described by a number of key attributes :–

Volume – from hundreds of terabytes to petabytes, where a petabyte is equivalent to 500 billion pages of standard printed text.

Velocity – up to near real time sub second delivery

Variety –  including both structured and unstructured data

Volatility – hundreds of new data sources coming online from new apps, web services and social networks

Data Strategy
To do Big Data well there needs to be a combination of machine intelligence and human insight. The vast amount of data involved is staggering – to sift, mine and identify the right information will require a fully integrated approach to managing both the product and data lifecycles for an organisation.

This will need to be built around a data management strategy that integrates Big Data into the front end of the innovation pipeline. This will involve a number of new alternative delivery models such as a new breed of analytical applications, using in memory capabilities to add scale and computation speed.

Benefits
The benefits for Big Data are immense, from identifying the profitability of  customers, products and channels, through to mining customer needs desires and sentiment.

The more intelligence you have on your customers from Big Data, the greater insight you can apply to new products and services, driving greater impact on revenues, margin and market share.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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5 Key Initiatives for 2012

Building on my previous post – Top 3 Technology Trends for January, IDC Financial Insights recently reported on the 5 Key Initiatives for EMEA in 2012.

1. New Business Growth.
In order to offset declining non interest income, revenue enhancement will be a key focus for institutions, supported by new product development, innovation, increased fees and margins.

2. Channel Proliferation
Mobility, social and crowd sourcing will become key service differentiator for banks to drive customer engagement and market penetration. This will be supported by real time analytics and charting, providing the user with a seamless cross channel experience.

3. Capital Optimisation
Banks will continue to drive cost compression to seek out aggressive operational efficiencies and complexity reduction across the enterprise. Continued use of outsourcing and robust infrastructure delivery methods such as Infrastructure As A Service will be key.

4. Infrastructure Resilience.
Organisations will need to focus on their legacy infrastructure, often the result of numerous mergers and acquisitions. This sprawling server real estate that can no longer be papered over and funded infinitum.

5. Expense Control
Banks will continue to embrace hybrid cloud initiatives along with infrastructure, desktop and connectivity virtualisation to drive down costs. Investment in private clouds will be a key focus of post trade activities.

Survive or Thrive
Underpinning all of the key initiatives will be a number of strategic enablers consisting of BigData, Social Media, Mobile and Cloud.

It will be these very initiatives and enablers that will that will be critical for organisations to decide if they are going to survive or thrive in 2012.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Top 3 Technology Trends for January

Looking in to the crystal ball for 2012, a number of new technologies and trends will become evident this year. In my opinion, there are 3 significant and interlinked trends that will become critical for financial institutions.

1. Big Data
Big data is the next frontier for innovation, competition and productivity. Banks have to realise that they are in the data business and that data is their biggest asset.

This is all about how structured and unstructured data is processed, analysed, optimised, automated and protected. Unstructured data accounts for 85% of everything we interact with including emails, text, video and web.

The next generation for big data  is about getting the machine to fit to humans. This will require the structured and unstructured data worlds to combine to provide a single layer across the enterprise, providing a consolidated and comprehensive picture of the customer. Only then will banks be able to tap into data as an asset, mining information to drive intelligence and customer insight.

2. Social CRM
A natural extension of big data is Social CRM. An evolution of customer relationship processes, to manage customer relationships and data in an efficient and process centric way.  Social CRM is about developing a social or collaborative business, both internally and externally, to identify and solve the business challenges your customers are facing.

At its most basic form, this will involve monitoring blogs, Facebook, Twitter and LinkedIn for references to your company.  Proactively, this will enable an organisation to create and manage its own online community, enabling your customers to interact, inform and conduct business. Dashboards can be enabled to define the most active social markets, drive customer engagement and insight as well as increasing customer service and satisfaction. Further benefits include client segmentation, rankings and behavioural targeting to further increase customer engagement and penetration.

3. Gamification
Fortune Magazine has identified a number of companies that are utilising gamification as a competitive advantage, using the same mechanics that hook gamers, as an effective way to generate business (www.bit.ly/9oS97L).

This has caught the attention of venture capitalists that have noticed large number of companies seeking funding for consumer software applications utilising game design theory.

Gamification will become a key tool to drive customer engagement and desirable web site behaviour. Using game design techniques to solve problems and engage audiences will become key for organisations with a Social CRM agenda.

This can be achieved through the introduction of gamification elements, such as badges, rewards, leader boards and ribbons to solve problems and increase engagement with customer audiences. As an example, Seattle-based Evo Media increased the number of users who completed their online tasks from 10% to 80% by adding gamification elements.  Users can receive points or badges for performing a variety of actions including spreading links to questions and answers via Facebook and Twitter. When a users reputational points exceeds various thresholds, they benefit from higher privileges with the option of moderating the site.

The convergence of Big Data, Social CRM and Gamification will drive significant opportunity for financial organisations to realise the benefit of their biggest asset – data. This will drive competitive advantage from improved customer information, intelligence and insight.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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