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TDWI Keynote: Larry English Takes on the Status Quo
Organizations that aren't managing information as a resource are wasting as much as half their IT budgets "moving data from database A to database B." This troubling perspective, from expert Larry English, kicked off this week's TDWI World Conference in Las Vegas. Here's the keynoter's advice on the right approach.
February 17, 2008
9 Min Read
You and your firm, Information Impact, have been pointing out the shortcomings of prevailing technologies and practices for two decades. What's the key message you'll deliver at this week's TDWI World Conference?
The key theme is that we have to apply the same management principles to information that we apply to our other resources, such as financial resources, people resources, facilities and products.
What are the basics of resource management?
The resource management life cycle begins with planning and then moves to acquiring the resource, applying it — that is, putting it to work — and then maintaining it. The final activity is to dispose of the resource when it's no longer needed.
So how is all of that applied to information?
We have an enterprise mission — the activities and processes of the enterprise — and we have to plan the information requirements needed in an information model. What's interesting about planning is that it actually includes the development of applications and information models. We have to [plan] all the way through to implementation of those components, applications and databases before we can start acquiring the resource and using it effectively. The acquire stage involves the activities that create data. We have to capture data with the end goals in mind. That is, who are the downstream customers for this information and what do they need to know?
This is clearly not the way information management is currently practiced for the most part.
No, we have a fundamentally broken application development process today. Most every application development methodology focuses on a project-by-project, department-by-department approach... The databases that are being built are generally not sharable, enterprise-focused databases.
Are any companies actually putting these principles to work?
Yes, there are a number of companies including Kirin Brewery in Japan, Teck Cominko, a coal mining company in Canada, and Aera Energy in California. Aera is an oil production company that pumps oil out of the ground for Exxon-Mobile and Shell. I first started working with them in 1999, and that very year they issued three, senior executive-level strategic initiatives. One was total process reliability, which is about maintaining the equipment in the oil fields so there's no unscheduled downtime and no environmental accidents.
The second was a strategic information planning initiative to understand — against the backdrop of the mission of the organization — what their core values were and what information they needed to know. They also sought to understand the process areas that developed and supported the automation of work, and the capturing and application of information.
The third strategic initiative was on information quality management. They have successfully implemented that and are now sharing information across their enterprise. They've implemented more than 50 percent of the [data] entity types that have shown up in their information models. Each of those is sharable by any activity and any knowledge worker who needs access to that subject area.
How has this benefited Aera?
They have reduced their cost of applications and they have increased the availability of quality, just-in-time information. They achieved their results by implementing two component parts: One is an effective information resource management discipline and the second is information quality management.
Are there many other experts out there espousing the principles that you advocate?
These principles are being embraced by others, but it's a very small minority of consultants who really understand them and that are helping clients to implement them.
What's your take on data stewardship, a discipline that seems to be gaining adoption these days?
The term "data stewardship" has been very strongly advocated by people in the systems area, but it's not the data that we need to be stewarding, it's the entirety of the information resource. That includes the data, which is the raw material that sits in the databases, but it is information that is presented to knowledge workers. The data is just the representation of a fact. Information is that fact in context.
Can you provide an example?
Okay, 615-837-1211. The data is just the number; the information is, "Larry English's telephone number is 615-837-1211." I wrote the seminal article on information stewardship in '92 or '93. I wrote about strategic and tactical and operational [information stewardship], and I described the role of an information producer, a knowledge worker and a managerial information steward. Information stewardship is absolutely required; it goes with the territory, just as it does in financial stewardship and people stewardship.
So are those who are following the prevailing ideas of data stewardship on the right track?
Let me give you the criteria to measure whether they're on the right track or not. I have seen many instances where stewards are appointed and made accountable for the content of data when they are not the original producers of the information. That is going to fail.
Because they don't have the capability to create or affect the quality of that information... They cannot be held accountable for the quality of the information content... They have to work in tandem with the information management staff who are responsible for the content and stewards of the integrity of the information models and the database designs.
In a number of articles you have stressed that companies are focusing too much on technology. You've also spoken and written about the need for an "ensemble" or "symphony" approach across the enterprise, which sounds something like the multi-domain approach now being espoused by master data management (MDM) software vendors. Is MDM a sound technology?
Do these MDM schemes call for a singular product database or a singular customer database, or is it just managing the diversity and disparity and trying to transform data as it needs to be moved from one database to another?
I think the term "master data management" is absolutely another silo, and what it is doing is partitioning data. There's no reference to the transactional data, and if you don't have the transactional data, you can't manage the enterprise. Can you name a provider of MDM software who talks about what needs to be done to manage the various transactions that are going to be related to those master data entity types?
Don't the transactions intersect with every domain, as in X product purchased by Y customer? How could MDM possibly be divorced from the transactional information?
Well, it can't. That's the whole point. The master data management vendors don't seem to talk about the transactions. I have listened to a number of them. You are right in saying that the transactional data is an intersection between the events that take place in the fundamental entity types – customers, products, and the relationship between those two. In retail you have sales, in banking you have withdrawals and deposits, and in insurance you have claims and losses. That pattern is very clear, so my conclusion is that we don't need master data management, we need information resource management....
We must get back to the point where we manage the value chain horizontally across the enterprise as a single process chain, and we must manage the enterprise as a single entity. That's what Peter Drucker talked about: the symphony conductor. You have lots of departments that have different processes and different information requirements, but you have to manage them all as a whole because they are interdependent.
You've been preaching these concepts for some time, but adoption seem minimal. Do you feel like an industry seer or more like an iconoclast?
I fully believe that I have understood the principles that are required to be successful in what I will continue to call the emerging realized information age. We're by no means there. We have only the technology of the information age, but we have not understood the underlying principles that need to be applied in order to be successful and competitive.
Today, 40 percent to 50 percent of IT budgets are spent in doing scrap and rework. If you count up how many redundant databases organizations have containing their key entity types and their key transactional types, it is a horrific number. When one of my Fortune-100 clients analyzed where their application developers were spending their time in new development versus maintenance of existing applications... more than half of their IT budget for personnel was wasted on simply doing nothing more than maintaining the programs that move data from database A to database B.
So what key points would you make to those who are entrusting their information management to conventional approaches and technologies? The first thing I would do is put the "I" back into CIO. That means we can't allow the Chief Information Officer to be merely a chief technology officer. I would also put the "M" into information management, which means we need to understand the real principles of managing a resource.
If you asked a CFO, "can your managers create their own chart of accounts when they're developing a departmental budget," he or she would laugh. And how many department managers are able to create their own benefits package for their staff? None, because we know the cost would only add overhead and no value to the customer.
Right now, our organizations are overcharging customers because of all of the money we're wasting on scrap and rework, not just in the information systems area, but also by not capturing the information that peers in the next department need.
Why aren't business schools teaching these principles?
It takes a history of failure before you really get to that transition. Many of the business schools have not even come up to the point where they can talk about master data management and some of these other things. We have to start raising the awareness of the principles in ways that are implemented not only by our organizations but are implemented by the education system.
To me, it's very simple. All we need to do is look at the resource management life cycle and the components of sound management espoused by Peter Drucker and others.
About the Author(s)
Executive Editor, Enterprise Apps
Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of Transform Magazine, and Executive Editor at DM News. He has covered IT and data-driven marketing for more than 15 years.
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