Globalization, integration and integrity will hold BI experts’ attention in 2004.
Creating and protecting corporate wealth: these objectives will loom large in the perspective of business intelligence (BI) and data warehouse (DW) professionals in the coming 12 months. Organizations are finding that cost-cutting efforts have run their course. While controlling expenses remains important, attention is shifting to the ability to generate revenue and grow assets -- especially the intellectual property embedded in information systems.
That is the summary based on discussions with 23 experts throughout the BI/DW profession in early January. In conversations, the general mood was "battered, but optimistic" after surviving a tough cleansing over the last two years. Recent dramatic resurgence in BI/DW indicates that 2004 is the year to move forward in globalization, integrity, and integration.
Globalization has changed the face of corporate information technology, including BI/DW. The dot-com bubble may have deflated many new ventures, but global electronic commerce is alive and growing rapidly. "Corporations now live and compete in a very small world ... at 10 Mbps," said Andrew Cardno, COO/CTO and founder of Compudigm.
With the rise of outsourcing and "offshoring," or the assigning of IT, call center, and other work to contract service providers outside the U.S., we have seen the evaporation of thousands of high-paying IT jobs in North America, just as we saw happen with manufacturing industry jobs in years past. In January, The Wall Street Journal highlighted a notable example of offshoring when it reported IBM's plans to transfer thousands of programming positions from Southbury, Poughkeepsie, Raleigh, Dallas, and Boulder (my home town!) to India, China, and Brazil. IBM expects to save $168 million in IT costs annually, the Journal reported. The offshoring of BI/DW related tasks, such as extract, transform, and load (ETL) procedures and report definitions, have begun. Has anyone sent an entire data warehouse development effort offshore yet?
Globalization extends beyond cost reduction from displacing jobs. Once you plug in highly skilled labor at a fraction of traditional rates, many assumptions about managing IT become invalid. With labor cheap and offshore, sophisticated BI/DW projects -- and their supporting products -- come within the grasp of organizations interested in sophisticated IT at much lower price points. We could begin to see small, emerging vendors disrupt the established BI playing field. Custom development is coming back in vogue, to the detriment of off-the-shelf applications. It would be wise to hone your project management and application definition skills.
Development productivity tools (such as code generators) built to save local labor costs will gather dust: Lessen your reliance on them. With skilled service functions distributed globally, you should pay greater attention to service-oriented architectures and Web services. "We converted entirely to SalesForce.com," observed Diaz Nesamoney, president of Celequest. "We do not have a single IT person supporting that function. This service could be anywhere, like in Bombay, India."
What to do? Decide what's important to your corporate wealth, in terms of core capabilities to generate revenue and protect your information assets. Distributing key business processes globally is not for faint-hearted managers. You must control those distributed processes and consolidate distributed data with other enterprise data.
After globalization, integrity is the biggest issue facing enterprise IT. And it is being questioned: in May 2003, Nicholas Carr shook up the IT world with his infamous Harvard Business Review article "IT Doesn't Matter." Carr argues that IT is important but that it is now ubiquitous -- a commodity function utilized by all firms. Therefore, in Carr's view, IT is no longer a strategic contributor to the unique, competitive advantage of the corporation. Although some have dismissed his argument as simplistic, the emotional appeal of questioning IT's contribution to the enterprise is deep and widespread.
A decade ago, IT based its stature on reliability and availability. In 2004, it rests on honesty and truthfulness -- not of individuals but of IT systems and information. Corporate leaders ask: Can we trust our systems to record valid business activity and our data warehouse to report valid business performance? IT's ability to answer is critical not just for complying with government regulations, such as the Sarbanes-Oxley Act, but also for building trust among employees, customers, and other business partners.
What to do? Use the impetus of compliance to leverage BI/DW for accountability and transparency. We cleanse transaction data as we merge with other data in the data warehouse. In the same manner, we need to cleanse (or validate) analyzed data as it is delivered out of the warehouse. When people can trust in who you say you are, corporate wealth will increase.
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