Today's Golden Nugget for CIOs: Smart Data
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Today's Golden Nugget for CIOs: Smart Data

Carsten Linz, Global Head of Center for Digital Leadership, SAP

Today, every company is evolving into a technology company: digital data surrounds us–often in such large amounts that its full potential is hidden or too complex to reach. Luckily, CIOs have the instruments in their hands to pave new ways for doing business. Cloud computing, hyperconnectivity, in-memory computing and smart sensors put data-driven insight and action at the center stage.

As data is becoming the golden asset for companies, CIOs need to shape their technology roadmaps proactively towards gaining the competitive edge for their companies. When IT becomes an integral part of the company’s value-creation process, many CIOs are under pressure because they often lack the competencies and experience in these new leadership domains.

Today it is key to derive the optimum value from your data and extract insights for new customer offerings and incremental revenue streams. With the right leadership skills, CIOs can elevate their game and make information technology a strategic driver for business success.

Act as a Visionary Data Alchemist-from Raw to Smart Data

In addition to the four traditional CIO roles–as technology advisor, IT service provider, business partner and security chief within the company – we at SAP’s Center for Digital Leadership see the following roles evolving in every company: visionary, entrepreneur, data alchemist and digital transformer.

  As data is becoming the golden asset for companies, CIOs need to shape their technology roadmaps proactively towards gaining the competitive edge for their companies  

The CIO must especially embrace the role of a data alchemist and build organizational capabilities to evolve huge amounts of raw data into smart data and smart processes, which yield knowledge and actionable insights for the business.

Imagine your company has terabytes of accurate geospatial weather data available and an elastic cloud platform in place to create detailed, real-time results around actual weather risks, historical climate data and the probability of future weather risks. Insurance and reinsurance companies, the public sector or the agricultural industry could benefit from smart consumption of this data in a variety of ways, including:

Observation. Analysis of satellite data contributes to predicting the climate health status of planet Earth. The biomass and vegetation index helps in yield prediction and therefore contributes greatly to food security in a world facing rapid population growth. That information also provides a deeper understanding of weather patterns and climate that can help optimize the energy harvest of wind and solar plants, tell us how water consumption has changed in past decades, or how the aeronautical and sea industry may change in the future.

Diagnostics. This allows the interpretation of the data and surrounding circumstances. An analysis of ice melting in Greenland or Antarctica quantifies rising sea levels to four millimeters per year. This supports analysis on the needed long-term investments in low-lying areas around the world and informs mitigation efforts, indicating the need for higher dikes along coastlines. Together with the European Space Agency (ESA) and based on the data and information coming out of Europe’s Copernicus program, we intend to diagnose such data using our SAP HANA Cloud Platform.

Prediction. This allows the creation of reasonable or even valid assumptions out of your data, through which you can make an assessment of each risk based on historical and up-to-date information. Based on this, you can better predict future scenarios, their probability and potential actions to take. Farmers will not only know about upcoming storms, but also about optimizing the water usage and fertilizer on their fields based on satellite information. Even better, a farmer can detect the imminent onset of the most common crop diseases and start preventive treatment immediately.

Decision support. The use of programmed enterprise systems intelligently recommends business decisions. This means that information systems can react autonomously and self-optimize. This signifies a shift to true management-by-exception approaches. For example, in case of a calamity, rescue teams are alerted automatically, and supplies for evacuated people come on time and in appropriate quantities.

Data Management is Essential

The prerequisite for everything described above is that the foundational enterprise data is clean, semantically correct, current, trustworthy, consistent across systems and delivered so that the business has fast, accurate results every time. These data requirements should be met with simple and easy processes using a high level of automation so that we can scale and ensure reliability and speed.  

CIOs must think about how to manage the multi-tenancy of big data environments, how to deal with data sets gathered from multiple sources, as well as how to establish data origin and ownership. Thus, data management is an emerging new business capability with the vision of consistent master-data creation and maintenance processes, improved tools and systems, and best practices for data organization and governance. SAP’s own internal Enterprise Data Management approach includes building four capabilities over multiple years:

  • Set-up of organization and governance
  • Ongoing data maintenance to manage the master data lifecycle and address normal data “decay”
  • Preventive, proactive data processes
  • Tools and systems

To drive the project forward, company leaders established an executive data steering committee and a global data council comprised of data leads from each SAP board area. Once these capabilities are built, the program will include ongoing data quality maintenance, data quality tracking, shared data services, and compliance oversight. This transformation requires a holistic, business-driven approach with fundamental changes to business processes, operations and IT systems with accountable roles and strong governance.

Data and the CIO

Data alone is not knowledge. However, with several breakthrough technologies hitting scale together, more companies will be able to extend insight-as-a-service offerings. An early example is SAP Digital Consumer Insight, delivering crucial insights for retailers and other location-based businesses, including the number of people in and around a location, aggregated demographics, and location of origin. It gives users the ability to answer questions instantly, which previously would take weeks of research and a significant financial investment. We anticipate this type of offering will proliferate for different industries, roles and lines of business.

In general, smart data initiatives offer significant opportunities for companies to develop a more thorough and insightful understanding of their business, leading to enhanced productivity, more efficient processes, a stronger competitive position, and greater innovation–all of which can have a significant impact on the bottom line and your overall data strategy.

The CIO has a key role to play. Strengthening the collaboration with other stakeholders in the C-suite is crucial. Namely the line of business executives in driving digital initiatives and revealing business needs as well as with the Chief Digital Officer, the Chief Data Officer and the Chief Marketing Officer. With strong internal and external partnerships, CIOs can create a winning digital strategy for the whole company, in which data-driven insight and action is a true asset.

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