Data economics and IT system integration: what relationship?

“The adjective data-driven means that progress in an activity is driven by data, rather than intuition or personal experience”: this is the defition of Wikipedia to a phenomenon that is changing the way in which to make strategic decisions in the company.

Yet, some say, companies have long been collecting information and making decisions based on these. Walter Vannini answers this objection on Tech Economy with an example:

"Let's say that in stock X is starting to run out. In a company [simply] data-informed the imminent break up of stocks is reported, someone evaluates what to do, perhaps in a meeting, and the decision is made to replenish. In a data-driven company, the minimum stock level is fixed in advance, and when the quantity of the item X reaches the threshold, the management system automatically sends a replenishment order to one or more suppliers, based on on all the necessary parameters: seasonality, perishability, delivery times, reliability of suppliers, etc. "

A data-driven economy is therefore predictive e automated and can take advantage, compared to the past, of a much larger amount of information (often heterogeneous by source and format): for this reason the data becomes “big data"And the business intelligence function, certainly not new, increases its importance in the life cycle of a company.

An economy data-driven it is therefore

predictive e automated and can

take advantage, compared to the past, of a large size

more information

However, it is a more "traditional" activity than IT system integration which allows you to create value around data. And the role of the Information Technology function (internal or external) is also to provide the company with the overall vision of this process.

Let's see why.

1. Which organizations need the most "data"?

The answer to this preliminary question is: potentially all. Some examples can be given about this.

Banks and insurance companies can grant loans and loans in a more informed manner thanks to an integrated management of data concerning customers. Utilities improve their remote control systems and energy performance, thanks to greater information wealth. The data also allows logistics and transport companies to monitor the progress of each individual delivery journey (including checking the traffic on the communication routes).

Furthermore, the vision of an 4.0 industry, that is the digitalization of the internal processes of manufacturing companies (including SMEs), of which much has been talked about in recent months, can only be achieved if the data guide the organization's functioning. Digital4 remembers: “New generation sensors that allow you to measure, monitor, identify and locate anything, together with Intelligent Transport System applied to every means of transport, inside and outside the factories, they help and increasingly help the Industry 4.0 to reduce the risks associated with human errors, ensuring maximum visibility with respect to the operation of the plants, optimizing production and warehouse management for the benefit of the entire supply chain ".

Not to mention the government of data in the Public Administration: data driven decision was also discussed in Rome in the last edition of Forum PA (23-25 May 2017). And Diego Piacentini, extraordinary commissioner for the Digital Agenda, had already explained the vision that must guide the PA: "Creating technological skills can help those who approve laws to go faster". But this is possible only if there are "standards of production, analysis and maintenance of computer data as assets of public affairs". And it is not just a question of internal data governance, as the request for administrative transparency by citizens is increasing: the open data sets of the Italian PA, collected and standardized, are available on a subdomain of the government website.

According to a recent study by the European Commission (commented here by Il Sole 24 Ore), the number of data workers in the EU will grow by an average of 14,1% a year between now and 2020: in 2015 they were 6 million and already in 2016 they had risen to 6.160.000 units. And the overall value of the data economy, from 300 billion last year, will grow to 739 billion in 2020. As a consequence, new professions are emerging around the data business both in the private and public sectors: among all, that of data scientists, definamed by the Harvard Business Review “the sexiest job of the XNUMXst century”.

Both in the private and in the public sector, new professions are emerging around the data business: among all, that of the data scientist, definamed by Harvard Business Review “the sexiest job of the XNUMXst century”
Most organizations, private or public, can therefore expand their business and increase their public prestige thanks to data management. But what work does it take to gain value from information? System integration applied to databases.

2. Data integration: because it is useful and with what means

Data, in itself and without a re-elaboration process, is not useful for the growth of an organization. Even linguistically, there is a difference between "given" and "information": the data is raw information, which in order to communicate something to a user must be processed and possibly integrated and compared with other data.

Non-aggregated data, present in organizational databases, generally have some characteristics that do not make them suitable for reading. They are often:

redundant (because the same raw information is duplicated),
fragmentary,
not consistent (from English consistence, ie coherence: different data tell us different things about the same object),
not updated.
There are many platforms on the market to facilitate data integration and data quality processes (to obtain consistent and non-redundant information). Some of these data integration and / or normalization products belong to well-known information technology brands. Just to give examples: Oracle, JBoss, Pentaho, SAP, SAS, Microsoft SQL for the analysis of internal activities; HubSpot and the Adobe suite for integrated marketing; Magento and Openbravo for online sales. Others are issued by companies less known globally but are equally valid. As regards data quality and data governance, we mention the Qiss system, a product that has established itself on the Italian market. The vision that guides their use is always to structure a single information flow in relation to the management cycle that interests us (that of customer care, supply and sales, personnel, etc.).

But integration platforms alone are not enough.

In fact, they do not replace the work of a system integrator. This is because, in the first place, the management and configuration of these products requires an IT department that has already performed the task in other situations. And secondly it is possible to extend the functionality of the platforms in order to adapt the tool to the customer's particular business model. This can be done by an experienced system integrator.

It is possible to extend the functionality of the platforms in order to adapt the tool to the customer's particular business model. This can be done by an experienced system integrator.
From a technical point of view, in this work of data integration there are a series of approaches: the traditional ETL process ("Extract, Transform, Load"), with which the data are extracted from the initial source and are transformed into the desired format, for then store them in the database; or the more functional creation of intermediate diagrams, which allows to transform not the original data but rather the queries with which they are searched; or even semantic integration, which aims to resolve semantic conflicts between the original databases without having to build new IT architectures; or the so-called data lake approaches, which associate to each element of the "lake" an identifier and metadata, as Tech Target explains.

For these two reasons, we need the work of an IT system integrator to offer the customer the benefits of having integrated data: a unified flow of information; the possibility, by the various area managers, to decide based on shared facts; fewer management errors (especially if you decide to combine data integration with dematerialized document management); consistent, updated and non-redundant data, with lower database administration costs.

It is a work characterized by a good level of "craftsmanship" and difficult to replicate: each case is different and specific.

3. Which business areas are data integration interested in?

Also in this case the answer is: potentially to all.

Often it is the Finance manager, with all the branches of his competent offices, who make the request for an integration of information flows. The Sole 24 Ore points out: “Whoever holds the financial reins of the organization must (…) be able to have, and take advantage of, the growing amount of information in synergy with the other business functions, from the supply chain to the automation up to logistics ". An approach of this type is winning especially when transversal production cycles are digitalized to many processes. An example above all, concerning instead the sphere of business administration: the active cycle. The greatest benefit of the operation is the ability to make more correct decisions more quickly.

The major benefit of the operation is the

ability to make better decisions and in

faster times.

When we talk about data integration, we cannot but think about the areas that interface with customers and leads: Sales, Marketing and Sales. Ideally, these business functions must be able to know the consumption behaviors of each individual interlocutor and their updated, complete and populated personal data with additional data useful to the business. With marketing platforms (and with the work of a system integrator) it is possible to integrate all the sources that the organization considers relevant to learn more about its interlocutors: ERP, social networks, website analytics, information request forms ... And so it also becomes easier to map the typical customer purchase paths (buyer's journey), and to distribute the most appropriate information or promotional material at each stage.

But that's not all: the Human Resources department can also benefit from greater information integration: for example the CEO of Fosway Group (HR research and consultancy company) admits: “In the vast panorama of HR, the departments related to Human Resources manage different types of data, which also come from extremely varied HR systems. Often, these data are fragmented: only by integrating them together can the HR managers use them profitably for the entire organization ". This is also because the search for talent poses problems of integrated information management: “Acquiring and retaining talent is an area of ​​primary interest for many organizations. To identify, retain and develop talent, a more holistic view of the staff is needed, what it does and why it works for your company. "

4. And the (new) role of the IT department?

We have seen that the Information Technology function has the task of integrating heterogeneous databases (platforms alone are not sufficient).

But does his task cease here?

We are traditionally inclined to think of IT, and the Chief Information Officer specifically, as mere "technology suppliers". But a report by the 2014 signed Vanson Bourne (here the comment by Digital4) warned against this interpretation: already on that date, IT represented, according to half of the companies interviewed, a service broker and consultant for functional lines. Also, but not limited to, a simple IT service provider.

More specifically, what then will be the new role of IT in relation to data? Also in this case, a more advisory task will complete and enrich the profile of IT service provider (such as system integration).

What then will be the new role of IT in

relation to the data? One more task

consultancy will complete and enrich the

IT service provider profile (such as the

system integration).

In fact, Walter Vannini still writes:

"Only the CIO has the overall vision of business processes (...), because for better or for worse, IT is the main hub of corporate data. For this it would be time for the CIOs (...) to begin to think and behave like the Chief Data Officers they have to become: someone who understands, promotes, extracts and protects the business value of the data. And that, as a result, can suggest how and where to use the data to meet the needs of the company ".

Author Paolo Ravalli

CEO Mainline srl