Risk Management / Data Economy

JOANNE FREARSON The open data revolution that’s transforming risk

SIMON ASHBY How big data is improving even my musical library

ANOTHER AWARD FOR BUSINESS REPORTER Institute of Risk Management presents us with its top journalism prize

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The inspectors call René Carayol on why over-regulation is threatening to take the reward out of risk

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How over-regulation is threatening to take the reward out of risk OPENING SHOTS RENÉ CARAYOL

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U R T R A DI T IONA L approach to management has been well defined, dutifully trained and has had robust processes supporting it for well over a century now. It is well oiled and has all the measurements and protocols that enable the tight control of risk to the business.

Despite this legacy, we still have a litany of near-catastrophic failures that somehow escaped the tight net of management – from Enron to Lehman Brothers to Volkswagen, with many more in between.

Even with ever-more-sophisticated models of risk management in place, companies are becoming more vulnerable to sudden geopolitical crises, natural disasters, and competitive threats.

Ever yone thinks more independent board directors will have the ne ce s sa r y r i sk oversight to mitigate poor decisions but there is no

evidence to prove it. When Lehman Brothers went bankrupt, eight of its ten board directors were independents.

The introduction of “balanced score cards” appeared for a while as the way forward. While they have certainly had much acclaim and success, there is little evidence that this tighter measurement and reporting had any real effect in preventing the global financial crash in 2008.

Third-party oversight and policing is the current flavour of the decade. Regulators on both sides of the Atlantic have stepped into the breach, and have collected stupendous amounts of money through fines and penalties. They have been hugely interventionist and quite muscular – but to what long-lasting effect?

“There is no way you can comprom i se,” say s L a r s Seier Christensen, CEO of Copenhagenbased Saxo Bank, a financial services firm focusing on online trading. “When allocating resources, meeting regulatory requirements is always top of the list.”

“This industrial strength heavy policing of rogue behaviour by individuals has yet to deliver sustainable success”

@renecarayol

By now nearly everyone recognises the challenges inherent in increased regulation, but less obvious are the sustainable benefits.

In the fourth quarter of last year Britain’s productivity figures took a significant plunge. Yet it was not the steel debacle that caused it or anything to do with manufacturing.

This was our nation’s golden goose – financial services.

Before the crash, everything from speed and ease of use to solid risk management and systems redundancy marked out the financial services industry for its operational excellence. With the rise of cyber-crime and politically motivated online attacks, risk management has remained at the top of the agenda. Reputations have taken such a hammering that they will take many years to repair.

The huge cost of handling regulatory complexity has led to the hiring of thousands of compliance and risk officers, and internal auditors are also in huge demand. The never-ending demands and everhigher expectations from regulators and from the customers of financial services firms has provoked even

more hiring of these controlling types.

This is all very well intentioned, but it might be time to pause and reflect on the real cause of the slow-down in productivity. This industrial-strength heavy policing of rogue behaviour by individuals has yet to deliver sustainable success but, with all the new processes and checks and balances, the means of production are grinding to a halt.

Many of the envisaged gains provided by the high investments in digital and mobile technology are being frustrated by ever-more strangling controls. While George Osborne’s rather heavy-handed intervention with the CEO of the Financial Conduct Agency last year appeared to be “letting the banks off the hook”, it might just have been provoked by his eyes on the slump in the national productivity figures. He might be on to something here.

Maybe it’s high time for a fresh new approach to risk management.

Given all the disruptive technology that is being unleashed, can we not come up with a fully automated “Management 2.0”?

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Business Reporter leads the way… again!

Institute of Risk Management presents us with its top award for journalism

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T A GL I T T E R I NG ceremony in London’s Park Lane Hilton, Business Reporter was presented with the Institute of Risk Management’s Global Journalism Award – the second time that Business Reporter has won the award in three years.

“It’s a fantastic accolade for us,” says Business Reporter MD Bradley Scheffer. “To be recognised by such an important organisation as the IRM shows how seriously we take our coverage of the risk management sector. Both commercially and editorially, we understand risk management and what is important to the people in the industry.”

Editor Daniel Evans said: “We won the inaugural IRM award for risk management journalism in 2014 and made the shortlist for 2015. To be back in top spot again in 2016 is a terrific achievement – it shows how consistently well we cover risk management from all angles.”

The central feature in this year’s winning entry involved three exclusive interviews by senior reporter Joanne Frearson with “The Risk Enforcers” – people whose day-to-day life demands assessing risks coolly

MAY 2016 Publisher Bradley Scheffer Editor Daniel Evans Production editor Dan Geary Client manager Michele Taylor: production@business-reporter.co.uk Project managers Safia Butt, Ben Ruffell

No Pulp Fiction here: web editor Matt Smith, editor Daniel Evans, senior reporter Joanne Frearson, video sales director Emmanuel Arthur and production editor Dan Geary Portrait: Andras Rac

and quickly. We talked to a hostage negotiator, a fighter pilot and a poker player who talked about how their hugely differing experiences translated into managing difficult business scenarios.

Nearly 400 international risk leaders converged in London from more than 40 countries for the awards. The event was hosted by Gabby Logan and VIPs included Dame Judith Hackitt, DBE who received a Lifetime Achievement Award. A total of 17 awards were presented to winners who travelled from as far afield as Canada and Dubai to be present.

More than 130 entries were received for the 2016 awards,

an increase of 50 per cent on last year.

Josè Morago, chairman of the Institute of Risk Management, said: “From its inception 30 years ago in the City of London, the remit and scope of the Institute of Risk Management has developed to serve a profession that continues to increase in importance, prominence and recognition by the day. The awards celebrate the full range of practical qualities required for risk management excellence in today’s world, and I encourage anyone connected with the risk management community to start thinking about entering our 2017 awards.”

And the praise just keeps on coming…

Anton Emdin, the brilliant Australian cartoonist whose work often lights up our front pages, has been shortlisted for the 70th National Cartoonists Society Reuben Awards, the Oscars of the cartoon world, for his work with Business Reporter. Emdin, who took top prize in the Newspaper category last year, is back in the running again. This time, the judges were particularly impressed with his illustration highlighting the story that the government is set to allow online voting in the UK’s next general election, due on May 7 2020.

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Know your data, know your customer D Spencer Wyer is global CTO of EDM Group

“The problem with digital transformation is that it often only addresses digital channels”

ATA IS the fuel of today’s digital economy. Customer behaviour is dictating the way they want to be communicated with, and increasingly this is via mobile apps. With the majority of businesses now undergoing a “digital transformation” programme, this enables real opportunity to bring businesses closer to their customers. Closer and more frequent customer interaction is also generating more and more data, making real-time capture, accuracy and speed of access to data critical to maximising the value of every customer relationship. Companies who fail to leverage their data will not maintain these close relationships with their customers and will lose out to competitors who are doing this well.

To explain the importance of data context and speed of delivery to the decision maker, think of a traffic light – the data is simply red, amber or green. The information is that red means stop, but you also need the context of the road and direction of travel to know if it’s relevant to you. If you get the data too late or out of context, you’re in the middle of the junction facing a collision.

Apply big data to this example and the problem is multiplied. You get to find out about every red light in the city at the same time, but you have to work out which one is relevant to you right now.

The problem with digital transformation is that it often only addresses digital channels. If you don’t solve data capture across every channel at the same time, you don’t have complete information. Ultimately the legacy channels, such as inbound mail, can become more and more expensive to service as you switch interaction from analogue to digital. And some of your customers may take a very long time to move over.

If you get data capture working like a well-oiled machine across every channel, with context, accuracy and speed, you can leverage closer relationships with your customers, and improve efficiency, resulting in a more fluid organisation. More importantly, you can create real competitive advantage. This is not just digital transformation, this is business transformation!

But there’s a dangerous side effect inherent in the data economy. On the one hand, you want to interact digitally with everyone making data as widely available as possible.

Conversely, there’s an increasingly valuable black market for customer data where cyber-criminals will exploit the slightest lapse in your controls and sell your data to the highest bidder, resulting in potentially massive fines for any regulated business.

Spencer Wyer, global CTO of EDM Group, says: “Every organisation should capture

data and documents from every channel of communication in real time as part of their digital transformation road map.

Without this, there is a significant risk of snail mail and even email, preventing true digital transformation.” A future-proof digital mailroom is much more than just the traditional wire-basket mailroom with scanning. It’s the convergence of communication, content and process, turning analogue information into true digital assets. Data can then be captured intelligently, processed efficiently and deliver invaluable management information and business intelligence in real time.

As digital transformation progresses you arrive at fully digital interactions with customers. This brings new challenges for any situation that involves the customers signing a document. You’ve gone paperless!

So you can’t get a wet signature. The answer is eSignature technology that enables the customer to sign electronically.

There’s more to this than you think. The signature can be a squiggle with a stylus or your finger on the screen which will look nothing like your actual signature, or just “click to sign”. For this to be valid you also need the date, time and ideally location of the signing event. Most important is authentication of identity. This is the tough one, because the UK doesn’t have an

electronic national identity system. The simplest way can be to ask a few security questions which could be verified at a later date and capture a picture of a driving licence or passport. Then you need to lock all this up in a legally admissible document securely stored for the life of the contract.

The last piece of the puzzle is legacy systems. There are big businesses out there still running on 20- or 30-year-old mainframes which they aren’t going to replace anytime soon. You need to get data out and then back into these systems as part of the digital customer interaction. Integrating technically can be very expensive and take forever. To get the data out some eSignature solutions have a quick fix known as “print to sign”, which is a printer driver that creates an eSignature PDF just by printing from the legacy system. Getting data back in can also be solved simply by something called “robotics”, which is a virtual user that logs into the old system and follows a script to make updates. This technology has been used in call centres for years and is seeing a resurgence as part of digital transformation.

EDM Group has already helped the best known brands to capture and leverage data in real time, truly enabling digital transformation: you can now buy a car on finance and drive it away in 45 minutes rather than

48 hours. Obtain a decision in principle on a mortgage, including all property risk factors, in 30 seconds. Accelerate the process of getting your house or car fixed in an insurance claim. And they have even helped pension administrators find all of the data they need from years of fiche, paper and electronic files in 10 minutes to enable you to retire and get your pension.

Talking of retiring, the next generation of technology is artificial intelligence and semantic meaning. This is true automation where the computer understands the meaning and learns from every interaction. Some commentators say it is going to replace people in the workplace eventually. Given a recent study demonstrated that an 83,000-processor supercomputer was equivalent to about 1 per cent of the human brain’s processing power, maybe we don’t have to worry right now about being replaced by technology.

Perhaps we should focus instead on providing our knowledge-workers with the best possible solutions to interact effectively and efficiently with customers in any way the customer chooses. This is what customers value, and it will maximise your relationships with them.

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Risk study: 2015 ‘most lethal year’ in terrorist violence

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AST YEAR was the most lethal year for terrorist violence in Europe in nearly a decade, as terrorists increasingly target private citizens and public gatherings, according to the Aon Terrorism and Political Violence Map 2016.

The map (pictured) – produced in partnership with Aon and The Risk Advisory Group – found that since

January 2015, nearly one-third (31 per cent) of all attacks in the western world have targeted private citizens and public gatherings.

The global threat posed by Islamic State unsurprisingly dominated many of the findings in this year’s edition of the map, as the terror group entered a more aggressive phase of mounting mass casualty attacks in 2015 and

early 2016 in the US, France, Turkey and Belgium.

The terrorist organisation’s activities have contributed to either sustaining or increasing risk levels in more than a dozen countries worldwide. Far-right activism as well as civil unrest risks stemming from the European migrant crisis and the increasing influence of extremist parties, were

also found to be driving rating increases.

Scott Bolton, director in crisis management at Aon Risk Solutions, says: “The threats highlighted in the map should encourage business leaders with global footprints to adopt a more strategic risk management approach to limit the impact of attacks on their people, operations and assets.”

Online shopping gets personal Joanne Frearson speaks to Expedia’s Gary Morrison about how millennial customers are more willing to share personal data in exchange for a better retail experience

77% Millennial customers who see benefit in sharing their personal data online

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HE MILLENNIAL generation is fairly accepting of being targeted with personalised ads online. Research by Expedia and the Future Foundation has showed that 77 per cent of them see value in sharing their personal data.

“Millennials have grown up in an era where the whole ad industry has been predicated on sharing data, so they are more familiar with how online advertising works than prior generations,” Gary Morrison, SVP, head of retail at Expedia, tells me at the Mi l len n ia l 20/20 Sum m it in London.

According to Morrison, millennials have an expectation that if they are interacting with a website then recommendations are going to be made to them based on their data.

The research by Expedia and the Future Foundation showed this was true in nearly all countries around the world except South Korea. The percentage of millennials willing to share personal data in exchange for recommendations was highest in China, at 80 per cent, followed by Brazil at 65 per cent and then the US at 60 per cent, while the UK was only 44 per cent.

Says Morrison: “Data can improve the relevancy of the information displayed. The more a company can learn about a person’s preferences, budget, party size, what they are interested in, and so on, the more they can provide that person with the most relevant recommendations on the first page of results.”

At Expedia, there are more than 7.5 billion searches a year and numbers are crunched through machine learning. The data helps them understand what different groups of people are looking for and allows them to target people that have similar interests accordingly.

It allows Expedia to orientate content towards people depending on how they are interacting with the online travel firm on their website or through emails. For example, if Expedia sees a person engaging with a type of content on their website, such as beach hotels, it would target them with more beach-orientated ads.

Morrison tells me that as long as companies act responsibly in how they use data, and use it in a way that can inform and improve recommendations, then people are more comfortable with it. But he is also quick to point out that it is vital to ensure data is not used in a “creepy” way.

He says: “We want our use of data to be relevant, but we do not want it to be so relevant that it tends to be somewhat creepy.

“In using customer data, obviously you need to comply with all the relevant laws and regulations. There is a sense of acting responsibly. Most of us are able to understand what represents good marketing.”

“We are trying to find what we call an effortless experience.

We want it to be as seamless and easy as possible” – Gary Morrison, Expedia

Expedia’s data is also generated through surveying customers on their trip to see if what they booked meets their standards, and is used to improve the customer experience. Through analysing this in real time, Expedia can quickly work out what customers like and do not like and thus shield them from experiences which do not meet their expectations.

Sarah Gavin, global head of Communication at Expedia, tells me: “The number one detractor is a bad hotel experience – if people have a bad hotel experience they are much less likely to be loyal to Expedia.

“If we can find you the right hotel that matches the occasion you are travelling for, it is much more likely to be a positive experience and you are much more likely to be a long-term Expedia customer.”

The data harvested from customers is mined to look for what Expedia calls “customer pain points”. If there are frequent comments about hotels which are less than optimal, Morrison

explains, the hotel is made aware of these and a process is put in place to iron out these pain points.

He says: “We are trying to find what we call an effortless experience. That is the overall site experience – when you come to Expedia we want it to be as seamless and easy as possible.”

According to Morrison, this use of data will only continue – and he sees customers’ mobile devices becoming the centre of this retail revolution.

“Millennials almost want to live the experience before they have the experience for multiple reasons,” he says. “Mobile phones will become the bedrock of how you experience travel, all the way from checking in to flights to [airport] terminal maps. I would expect that at some point too, whatever films you have on your mobile phone, you will place them into some sort of cassette and be able to watch that on the airline. Recommendations will become more personalised about local experiences based on what others like you have already done.”

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All in the wrist action Joanne Frearson investigates how Fitbit is encouraging businesses to take a greater interest in the health and wellbeing of their employees $

4.1bn

How much Fitbit was valued at following its IPO last year

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HE FITBIT business has been built on data.

The company, which was valued at $4.1billion following its IPO last year, connects millions of people around the world with devices that can monitor their heart rate and sleeping patterns, not to mention count calories, steps and stairs climbed.

And the technology is having a knock-on effect in businesses too, with some using the devices to foster greater employee engagement and wellbeing.

“When you look at the data on the app it is the most engaging part of the whole process. There are a whole host of people now who are extremely interested in the data on how it positions them within a community of users,” Gareth Jones, VP and general manager of EMEA at Fitbit, tells me at the launch of the company’s smart watch Fitbit Blaze and activity tracker Fitbit Alta. A big growth area for Fitbit has been in the business-to-business offerings, and companies such as Barclays and GoDaddy have all signed up to their wellness platform.

Jones says: “What we are seeing is companies want to be seen improving the health and wellness of their employees, improving their work-life balance, making their time at work not just a sedentary experience. They are also seeing the chance to build cameraderie and a degree of company loyalty, and to develop inclusion across geographies.”

“Companies want to be seen improving the health and wellness of their employees” – Gareth Jones, Fitbit

Companies can undertake Fitbit Corporate Challenges as part of the wellness programme designed to help drive employee engagement.

According to Jones, the programme helps spur a degree of gamification and competitiveness, helping to make people feel part of a group and position them within a community of users.

Jones says: “The most important thing about our products, whether it is about heart rates, steps, walking or floors climbed, is that it’s trying to encourage people towards a positive trend, so you will walk more than you did last week or climb more stairs. If you’re improving and can see you are walking more, stepping more and your resting heart rate is getting less, then that is the correct trend to follow – it is encouraging you to do so.”

Although the amount of data generated by a Fitbit is vast, wearers of the device have the ultimate choice of how they want their data used, whether it be part of an aggregate or individually.

And employee data will not be compromised – Fitbit takes protecting private information seriously, and has numerous safeguards in place to guard against the misuse of data. “We do not sell our data to anybody,” says Jones. “If you have your data with us, you can be entirely certain that it is not going to be used in any third-party feature.

“You have to be consistently vigilant, and we never take it for granted that our systems are 100 per cent secure. We are constantly monitoring what is out there with respect to threats, but also what is out there with respect to ways of protecting the data. There is a whole separate department in place which is designed entirely to make that as foolproof as possible.”

Big data promises need small data foundations

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HE HYPE behind big data is relentless.

I can’t remember the last time I ventured online without coming across some form of communication selling its benefits and the way it will disrupt the world of business. Small data, on the other hand, gets little mention, drowned out by the compelling promises of its younger brother.

So I’d like to stand up for the little guy and talk to you about small data. Because small data – the lifeblood of your business – needs an evangelist too.

The problem with the big data promise is that it is based on an assumption – a big one. It assumes that the organisation using it already has the small data foundations in place to capitalise on any newly captured insights. This is often not the case.

As an example, consider the promise of strategy. Strategy is supposed to differentiate companies, creating new blue oceans of growth, yet often senior executives lay out new, exciting business strategies without arming their employees with the plans, capabilities and insights required to execute their vision. They essentially expect their teams to achieve significantly better results with the same intelligence and resources they have always had.

Strategy therefore needs to be followed up with disciplined and aligned execution;

26% The amount of data managed by businesses that is inaccurate Source: www. cioinsight.com

based on a clear understanding of business goals, their required contribution and the reason for current results. The devil lies in the detail – in the small data that flows throughout your organisation.

Understanding this detail heightens operational control and improves an organisation’s ability to execute change. As Sean Culey, a business transformation expert we’ve worked closely with in the past, explains: “You cannot control what you do not understand and you cannot

sustainably improve what you are unable to control.”

There’s now a plethora of new analytical tools available that aim to help organisations tackle this operational challenge head on; the most advanced of which is self-service prescriptive analytics. To many, prescriptive analytics is about understanding long term strategic trends – its immediate value is often overlooked. The timely, actionable insights contained within these tools can improve operational control, helping ensure

supply meets demand, inventory levels are optimised and risks controlled.

The self-service aspect is essential as it enables organisations to protect one of their most precious commodities – time. The prescriptive capability moves users beyond hindsight reporting to a place where they can sense events and take actions that control the future response. Prescriptive tools understand the relationship between cause and action – they don’t just report on past events or predict what might happen, but instead provide actionable intelligence that can be used to directly impact future performance.

As big data matures, organisations will soon find themselves with a myriad of new data sources they’ll be able to mine for insights. It will therefore become increasingly important for organisations to understand their existing data to ensure these future insights can be acted on effectively. While this data may be less exciting and smaller in volume than its big data brother, it is not necessarily smaller in terms of impact. The insights you need may be closer than you think.

INDUSTRY VIEW

Fred Hermans (left) is CEO, Every Angle f.hermans@everyangle.com

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Driving the changes in data Business Reporter talks to Dr Steve Melia and Professor Graham Parkhurst about how data lies at the heart of the driverless car revolution

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Right: Dr Steve Melia; above: his book on urban sustainability, Urban Transport Without The Hot Air

N A weekday morning, you step out of your front door in London’s suburbs and climb into a driverless car. Your journey to work in the city is smooth, as the autonomous vehicle follows a route designed to avoid congestion and red lights. Your journey is much quicker than it used to be, thanks to an expertly managed transport system fuelled by big data analytics.

This is the vision of the future touted by those behind the technology, but how close is it to reality, and how effectively are governments and firms using the road data available?

For Dr Steve Melia, senior lecturer in planning and transport at the University of the West of England (UWE) and author of Urban Transport Without The Hot Air, the potential is there, but these organisations must first have access to the data and the means to process it.

“The question is usually about access to it – the practicalities of obtaining it and who has the capacity and the time and the resources to do what with it,” he says. “There are a number of big projects that are looking into those issues.The potential for research – to better understand how vehicles behave in a city, for example – that is something everyone has recognised the potential of. There’s been a lot of talk and there are a small number of projects, but it’s a massive job.”

One obstacle is that data that could be used to bring about more efficient and sustainable transport is held by private companies, which either view

it as confidential or simply lack any business incentive to share it. “One of the major issues with all this is intellectual property and who owns the data,” Melia says. “A company such as Uber would collect an awful lot of data, but it’s probably not going to be very motivated to share it with other parties.”

That said, even with the right data in the right hands, there is no guarantee our transport problems would be solved.

The potential of self-driving cars, for example, has filled many column inches, but it is difficult to predict exactly how a technology will change the world.

“It’s one thing getting the technology to work, but it’s actually at least as big a challenge to work out how the world would operate if there were lots of these things moving about the roads,” Melia says, before explaining one of the potential unexpected pitfalls.

“One of the negatives from a capacity point of view is that if respecting all the rules was actually built into the vehicles, that would significantly reduce road capacity in many ways, because in reality most of the time most drivers don’t respect those sorts of guidelines.”

As well as large-scale analysis to tackle capacity issues, there is also potential for automated cars to share data with each other – a prospect that Professor Graham Parkhurst, professor of sustainable mobility at UWE, says would open up “all kinds of possibilities”.

“If vehicles were more connected together in terms of their

operating systems then you could have platooning, which is running vehicles very close together because their braking systems are interlinked,” he says of data-sharing vehicles travelling on high-speed roads.

While this could increase the capacity of motorways, for example, Parkhurst says that in urban areas where vehicles are closer together anyway the data shared could enable self-driving cars to synchronise their journeys with traffic lights and cut energy waste.

“In principle you could optimise vehicle speeds so they arrive at the traffic lights to find they are ideally on green… so you are not braking and accelerating, which is bad not only for carbon emissions but also for noxious air pollution,” he says.

At a management level, increased data collection could enable those in charge to build more accurate predictions of congestion at a given time. Think of the traffic data in Google Maps, Parkhurst

“It’s one thing getting the technology to work, but it’s at least as big a challenge to work out how the world would operate if there were lots of these things moving about the roads” – Dr Steve Melia

says – but more detailed, and available to inform road management.

“One of the big ideas is that we can use predictive analytics to work out, based on where people travelled before, where the problems and congestion is likely to occur on future similar days,” he explains. “The idea is that transport system managers, if they had these data analytics, could be pre-emptive in their management.”

There is certainly potential for data to change the way we travel, but there are still challenges to be overcome to bring these ideas into the real world. One of these challenges is the volume of data available, which can be too much for firms and governments to process quickly.

“I think one of the challenges is that the sheer speed at which this technology and the availability of data is changing will exceed the capacity of organisations to make full use of it,” Melia says. “So to what extent it is used and in what ways I think will probably depend on more traditional issues of politics and finance.”

And despite the technology available and the potential of big data, Melia points out that it is not an automatic solution to problems surrounding congestion and the environment.

“Technology itself does not solve human problems,” he says. “I tend to feel the technology itself is neutral… Whether technology leads to an improvement or to a worsening of the situation depends on how human beings use it.”

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The open data revolution that’s transforming risk C 9bn OMPANIES SUCH as Thomson Reuters, Arup and Syngenta are using open data to help reduce risk, overcome challenges in business and gain a competitive edge, according a new report by the Open Data Institute (ODI) given exclusively to Business Reporter.

The report discovered these companies have adopted an open approach to keep pace with change, adapt to new markets and influence whole sectors. It found that being “open” has become crucial for overcoming challenges that many big businesses face.

Jeni Tennison, technical director at the ODI, says of the report: “The thing that struck me most about the case studies was that each organisation was taking a really strategic approach to using and publishing open data, but also to openness in general.

“They were not just doing it for the sake of openness. It was because they saw a gap or an opportunity or a risk that they thought they would address by using openness.”

For example, she explains that Thomson Reuters is using data as a strategic approach in order to adapt to a changing publishing

industry which has been moving towards a free model.

Thomson Reuters introduced PermID, a system which assigns a unique identifying number to each organisation and works as a reference for the company, so all that data about the firm gets linked to that one number. This adds value, Tennison explains.

W hile A r up’s open innovation approach has involved working with third parties that use open data, it has also enabled Arup to build services that are more flexible and agile because it allows them not to be confined into restrictive terms and conditions which traditional third-party suppliers can have.

“When you rely on a particular supplier of the data, often that means being locked into their products and services as well,” Tennison says. “This reduces your flexibility to move to better products and services that might be offered by other companies, perhaps because they are better suited to your needs, or cheaper.

“This reduces your agility and efficiency, and is therefore a risk to the business.

Openness can reduce risk for companies

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The amount free government information can contribute to GDP Source: Lateral Economics

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EXCLUSIVE Joanne Frearson talks to the Open Data Institute about how freely shared information is better for business

by lowering lock-in to particular suppliers. When you rely on proprietary data, you are usually dependent on the single monopoly supplier of that data.

“If the company withdraws access to your licence for whatever reason, or the company folds, changes its focus, or decides you’re not a favoured customer any more, you can no longer use that data.

“The licence to use open data, on the other hand, can never be revoked – you can always use whatever data you have.

ODI: data accessibility at risk from proposed Land Registry privatisation

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This reduces your risk and dependency on the organisation which is providing that data.”

Elsewhere, Syngenta had been facing long-term challenges about the sustainability of food supply. The agricultural company started publishing open data in order to address these issues.

Tennison says: “For Syngenta, it’s not so much about being competitive, but more about the sector as a whole facing some very big challenges around agricultural

N A draft response to the UK Consultation on privatising the UK Land Registry, the ODI has warned that economic value could be lost and accessibility to data placed at risk if it is put in the hands of private owners.

Research commissioned by the ODI from lobbying consultants Lateral Economics showed core government open data assets are of greater value to the economy compared to data people have

to pay for. According to the research, these assets can inject an additional 0.5 per cent of GDP into the economy, amounting to £9bn in the UK. Jeni Tennison, deputy CEO and technical director at the ODI, says: “This report highlights the wide economic benefits of a strong, open data infrastructure, and raises concerns about the economic impact when core data assets aren’t available for everyone to access, use and share.

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How big data is improving even my musical library EXPERT INSIGHT SIMON ASHBY

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production and food sustainability. The only way Syngenta can contribute to these challenges is if it is open, transparent and collaborative.”

According to Tennison, companies are using openness to stay competitive with regards to market changes and to collaborate with their partners in order to build some common data assets and develop standards for a sector.

For example, the Open Banking Working Group was set up in September 2015 to explore how data could be used to help people transact, save, borrow, lend and invest their money. It is recommending the creation of an open banking standard to help improve people’s banking experience.

Companies using open data can reduce their costs, not just in paying for licences for data, but the overhead cost of negotiation when getting hold of data.

“Its analysis is particularly resonant in the UK, where the government is now feeling the effects of privatising address data along with Royal Mail, but is simultaneously consulting on the privatisation of the Land Registry.

“Policy making should be led by evidence. We would like to see more economic research that helps inform the decisions governments are making about data.”

“If we do not have open information, we will make less informed, and therefore worse, decisions” – Jeni Tennison, ODI

The ODI’s Jeni Tennison

“Negotiation can take a long time,” she says. “Figuring out what the licence is, figuring out what you can do with it. With open data these costs just disappear – you can do anything with it. It makes using data more efficient and reduces friction.

“Data is becoming infrastructure for our economy in the same way that roads provide our core transport infrastructure. As a modern business, you need to be using data in order to make informed business decisions.

Open data is an important part of that data infrastructure.

“Using data to make a decision is like travelling on a series of roads. To get from point A to point B without open data is like stopping at toll booths at each road junction.

“Some journeys you just wouldn’t want to make because they are too much of a pain. So some decisions you will not be able to make because that data is too difficult to access.

“In other cases, decisions will be much more expensive. If we do not have open information then we become a lot less informed and we make less-informed decisions, and therefore worse decisions.”

As the ODI report shows, companies that use open data are helping to reduce risk, overcome challenges and build products which give them more flexibility and make them more agile. Using open data is providing them with a competitive edge.

To view the main ODI report, see http:// theodi.org/open-enterprise-big-business

HEN I was born in 1971 computers were the size of houses and the preserve of large corporations. As I grew we marvelled at devices like the Sinclair Spectrum and, later, internet-connected PCs. I first encountered these as an economics undergraduate in 1989, and I did not see it catching on.

The internet then was slow and mostly seemed to consist of bulletin boards in which American economists argued about healthcare insurance (plus ça change…).

Today the internet is used by almost everyone and contains much that is essential to our daily lives. We all have gigabits of personal information on the internet, from our browsing histories to personal websites and information on purchases, payments, publications and photos. Social media has evolved far beyond small bands of grumpy academics – even my mother has a Facebook account.

All this means that there is much more data about us than before. While a few organisations and close friends/family might have had some personal (hand written and manually indexed) information about us in the 1970s, now personal data is available to anyone bothered to look. As individuals some of us may have concerns about this, but from the perspective of our growing data economy this information provides many opportunities for businesses to generate a profit.

One key growth area is of course cyber-security, an area so important that businesses, such as Apple or Facebook, have resisted even government attempts to bypass security controls. But while cyber-security is now big business it is not where the real innovations for business can be found. What is much more interesting in terms of business opportunities is the world of big data.

While you might not know what big data is, you will probably have seen it in action.

Anyone who has bought something from Amazon will find

that when they next log in, or periodically via e-mail, Amazon will recommend new products in a manner that is personal to them. I especially like it when Amazon recommends music. I have what can best be described as an alternative taste in music, but Amazon quickly learned what I like and I now regularly buy what they recommend and am rarely disappointed.

Essentially, big data is about using massive amounts of data, from a wide variety of sources to help make more accurate predictions and better informed choices. Moreover, it is not just something for web-based marketers like Amazon; more conventional organisations can use big data in a variety of ways.

For example, many insurance companies use big data to help them assess risk, using tools like social media to predict potential new risks and also to better understand the impacts of existing risks such as flooding/ terrorism or motor claims. In life insurance big data can be used to help predict individual life spans much more accurately. I have just bought a Fitbit and there is now talk of using the information collected by such devices to help provide more customised life insurance quotes. Soon it will not just be my wife berating me for not achieving 10,000 steps a day – I could see my life insurance premiums increase also.

More generally businesses in services and manufacturing can use big data to facilitate more accurate stock control, predict new markets/trends or enhance their logistic arrangements.

However, at the moment there remains a significant skills gap in this area. While there are many management consultants, like McKinsey, and IT companies, like Google or IBM offering big data services, it is only when this expertise is developed in-house that businesses will be able to take full advantage of the data revolution. Schools and universities take note.

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Big data may be the elephant in the room, but it’s the agility of the greyhound that wins 80% Users who gain business value inside 12 weeks

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MONG THE hype about big data and the digital economy, the fact remains that all analytics must be based on solid data foundations. Big data can quickly generate big problems and false results unless sound data-management practices are in place. Big isn’t always beautiful – sometimes the devil is in the detail. It may not be glamorous but the quality of a company’s data and the governance surrounding it is fundamental to its value as an asset.

The management of the key elements of data within an enterprise, known as master data or reference data, are crucial to this. The rise of the CDO (chief data officer) is an acknowledgement of this issue as they are the ones tasked with getting value from their organisation’s data.

Crucially, they must have the vision and skill to view both the business and its data holistically.

Data is used to bring value to a business by equipping management with the information needed to make more accurate business decisions. The quality of these decisions is directly proportional to the quality of the data available. Analytic tools provide visualisations that make this easier

but if the data is poor it is just easier to reach poor decisions. Typically, the key elements of data in an organisation are spread around 15 to 20 business applications such as ERP, CRM and finance systems.

The attributes of this data are well defined and its relationship with the business is well known. Despite what some may argue, this is not the random sea of data waiting to be released – it’s a pool of knowledge that can be organised and tapped.

Pulling this together to create one reliable source of data ensures analytics are based on a sound footing. It may be fashionable to talk about big data, especially if you are a software company seeking an IPO, but Semarchy argues that getting the foundation right ultimately provides more value to the data economy.

Semarchy entered into a crowded marketplace some four years ago in the knowledge that it had to offer something distinct from the traditional players it would be up against. A pedigree in data management equipped it to achieve this – the management team previously developed a leading-edge data integration suite that was ultimately acquired by Oracle – and the company set about building a disruptive

No spreadsheets required: unlock the value of your business relationships “It’s much easier to maintain and use data than it might seem”

I

T SHOULDN’T come as a surprise to you that your company is always collecting data. Each email received, sale completed, and phone call made is one of many data points that can define the future of your business. So what does your company do with its data? Are these incoming pieces of information analysed to increase the probability of future success? Or do they lie dormant in an unused and neglected system?

The truth is that it’s much easier to maintain and effectively use data than it might seem to the uninitiated – provided, of course, that you invest in the proper CRM (customer relationship management) resources. But how can you tell the good CRM solutions from the poor? There are so many different software options available to track, store and analyse data that the search process can quickly become overwhelming.

The first and most important thing you should look for in a CRM is automatic data capture functionality, so that you can eliminate manual data entry and create

more time for productive action. It also goes without saying that CRM should be both mobile and cloud-based so that your company can save time and money. But what kind of technology can help your company truly stand out from the crowd?

A proactive intelligence tool like Bullhorn Pulse can help you take your relationship management to the next level. By synching your company’s email and phone conversations with Pulse, you can ensure that every interaction is automatically tracked and translated into meaningful insight so that you’ll know when a relationship requires action.

Bullhorn Pulse and Bullhorn CRM are designed to help you automatically unlock the value of your business relationships – no spreadsheets required.

INDUSTRY VIEW

To learn more about how Bullhorn Pulse and Bullhorn CRM can help you turn data into incredible relationships, visit sales@bullhorn.com +44 (0)20 3617 6262

technology that would provide value to business more quickly than previously achievable. While mainstream products (the “400-pound gorillas”, as Gartner calls them) had grown fat over many years, Semarchy built a lightweight, agile technology to enhance the quality and provide governance for an enterprise’s master data.

Being a new generation product, Semarchy could take advantage of the cloud – it was the first MDM product on AWS marketplace – as well as tablets, smartphones and

traditional PCs, and conceived the idea of evolutionary MDM – all with the intention of providing return on investment or business value, in a fraction of the time commonly experienced.

Big data may be the elephant in the room, but it’s the agility of a greyhound that wins the medals.

INDUSTRY VIEW

richard.branch@semarchy.com www.semarchy.com

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Inspector The Inspector was excited to hear that Team GB Olympic rowing bronze medallist, Constantine Louloudis, is an advocate of the use of data analytics and science to make boat racing faster.

Speaking at an event at the London Rowing Club in Putney, Louloudis says: “Now that materials have improved and we’ve made a lot of positive steps in the past few decades, the new way to get better is to be more scientific, being more intelligent with our training and that means monitoring and using data.”

SAS, a data analytics firm, is helping the GB rowing team maintain its tradition of first-class Olympic performances by analysing data from all aspects of the squad’s preparations for Rio. This can identify where marginal gains might be made to help make the boats faster and give the team a competitive advantage.

Hugo D’Ulisse, head of analytical platform at SAS UK & Ireland, says: “British rowing has been very successful in a competitive world of very fine margins.

And we know significant improvement is possible through the aggregation of marginal gains.

BY MATT SMITH, WEB EDITOR

Dogberry

Riskmethods

www.riskmethods.net/en/blog

For a more sector-specific approach to risk management blogging, look no further than Riskmethods, which focuses on risk in the supply chain.

The blog, which is run by the people behind the supply chain software of the same name, combines news, comment and insight to help you make the right decisions.

“By using detailed data analysis it’s possible to make decisions that aren’t purely based on gut feeling. Then there’s the possibility to finetune what’s already being done to make small improvements and finding unexpected correlations between things you would not have otherwise discovered.”

I recently learned that the Bank of England used big data techniques to monitor social media channels during the Scottish Independence Referendum to see if there was any effect on financial markets and a potential run on Scottish banks. I suspect they will be doing the same in June prior to the EU

referendum. I wonder if anyone will use big data to predict the outcome of the referendum before the results are known.

New data protection rules coming in across the EU are expected to boost demand for cyber-liability cover, according to a report by BNY Mellon, Insurance Linked Securities – Cyber Risk, Insurers and the Capital Markets.

Cyber-risk is one of the fastest-growing exposures faced by the corporate world, with the market predicted to grow to $25bn by 2025.

The report showed that although steps have been taken to standardise cyber-risk data and to design products that cater for cyber-terrorism, the insurance market for physical damage and bodily injury arising from a cyber-attack is nascent.

Paul Traynor, pensions and insurance segments leader of

international at BNY Mellon, says: “There’s huge potential for cyber-risk to be transferred to the capital markets using insurance-linked securities in a similar way to how cat bonds underwrite hurricane and earthquake risks. However, significant progress is needed in aggregating and modelling the risk. This needs collaboration between insurers and tech experts to better understand the interdependencies between systems and the frequency of attacks.”

IBM Big Data & Analytics Hub

www.ibmbigdatahub.com/blogs

Risk Management Monitor

www.riskmanagementmonitor. com

This blog, run by Risk Management magazine, provides daily articles, interviews and videos on all aspects of risk management.

Some of its most recent posts take a look at the effects of the recent earthquake in Japan and the responsibility of insurers when it comes to cybersecurity and data breaches.

Risk Management (Free – Android)

This reference app features a comprehensive guide to the field of risk management, along with a glossary of the area’s key terms.

Hadoop Tutor (Free – Android)

Get to grips with one of the most prominent frameworks for processing big data with this app, which guides you through the important principles.

IBM’s big data blog examines all issues related to data and analytics, from the masses of information generated by the expanding internet of things to the ways airlines are improving their customer satisfaction and efficiency with clever use of big data – and those are just a few of its frequently-uploaded posts.

AWS Big Data Blog

blogs.aws.amazon.com/bigdata

The team behind Amazon Web Services (AWS) offer their insights and advice on collecting, storing, cleaning, processing and visualising big data on this site. The blog is part of a series run by Amazon and AWS that cover everything from Java development to security, and features a podcast with more than 130 episodes.

Video campaigns from Big data

BIG DATA

Innovation

INNOVATION

Pensions

PENSIONS

Risk management

RISK MANAGEMENT

Whether you have a zettabyte or a megabyte of data Companies of all sizes run the risk of becoming obsolete if The introduction of freedom and choice in pensions has Risk can be defined in a variety of different ways, on what your customers bought today, at what time, in they fail to innovate. brought sweeping changes to the pensions landscape. depending on the nature of the business and the what quantity and the price they paid, it is only valuable if SPOTLIGHT ON… market(s) within which it operates.

SPOTLIGHT ON… you can draw insights from it.

SPOTLIGHT ON… • Cloud technology • Pension freedoms SPOTLIGHT ON… • Regulatory compliance • Consumer experience • Regulatory landscape • Risk culture • Predictive analytics • Innovation strategy • Investments • Recruiting risk professionals • Risk management • Business transformation • Auto-enrolment • Digital identity • Strategy and implementation • Packaging • Retirement • Data security To watch these videos, and for more information, go to business-reporter.co.uk/category/video • Data capture

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Four pages of analysis and expert comment

Business Zone

How to cash in on the big data treasure trove

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It’s not about the bucket…

“It’s all about trust. It’s all about data” – James Wilkinson, CEO, Entity Group

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ASTEN YOUR seatbelt. The digital revolution is just getting started. As consumers, “digital” has already fundamentally changed the way we shop, learn, communicate, entertain ourselves and in some cases meet our significant others. Yet, less than 20 years ago, conventional wisdom assumed that people would never use their credit cards on the internet. Conventional wisdom was wrong. Most businesses are unprepared for the next wave of digital.

Our digital future is all about user experience through trusted, secure and “invisible” interaction. When buying fuel, why should the pump require a physical credit card? Your vehicle is unique and verifiably yours. Your phone is in close proximity to the pump and it can already make payments. The ingredients are all present and ready for action. The transaction can be automatic, effortless, secure, trusted, and… invisible.

It’s all about trust. It’s all about data.

The new business landscape lives at the intersection of people, objects (“things”), location and specific events – or POLE. The traditional transaction becomes the invisible interaction. The foundation of the interaction is trust – trust that the right interaction occurred, trust in the information supporting it and trust that it was timely and secure. Every product from every industry must participate in a digital conversation mediated by a so-called smart contract. It’s no longer about slick apps or websites – the digital ecosystem is the “killer app”.

By its nature, the digital ecosystem requires flawless and timely digital participation. Amazon disrupted retail.

Digital cameras disrupted Kodak.

Netflix disrupted Blockbuster. Apple disrupted Nokia. Uber disrupted the taxi industry. You haven’t seen

anything yet! Organisations must redefine their core business process around the concept of purpose and around the exploitation of trusted enterprise data in the context of POLE. Where does your company sit? Will you be the digital invader or the Blockbuster of your industry?

Preparation doesn’t require brain surgery or huge expense. Successful organisations deploy active data landscaping strategies, not weed management. It’s not about acquiring new big data technology, new enterprise warehouses or apps. These are simply buckets for data. To wash a car you need clean water, soap, a brush and a bucket. The important bits are the water, the soap and the brush. A bucket is required, but its size, shape and colour contribute little to the outcome.

The building blocks for success are more fundamental.

It’s important to review the basic interactions you have with customers today and to contrast them with how you desire to interact tomorrow. Next, consider how your enterprise data supports those interactions. The gaps around entity resolution, data description, data quality and missing information quickly become apparent.

From there, put in place an evolutionary, pragmatic, structured and agile approach to drive your digital transformation.

INDUSTRY VIEW

James Wilkinson is CEO of Entity Group (www.entity.co.uk), a leading global provider of digital transformation services, helping organisations exploit their enterprise information. Read more in Entity’s forthcoming book The Data Delta – a practical guide to making sense of the digital economy. entity.co.uk/datadelta linkedin.com/company/entity-group-ltd

OMPANIES ARE sitting on vast amounts of data which, when analysed, could provide them with a competitive edge in their business and help them in their digital transformation.

“If you want to do something that will get your business jumping up ahead of others, big data engineering will help business owners differentiate themselves from their competitors,” says Nick Puntikov, CEO at First Line Software.

“This is where the huge potential lies. Data is a great asset – but the big question is, how do you draw value out of it?”

However, big data engineering is still in its early stages and there is some confusion by a lot of companies as to what is needed for that role. Often firms have hired data scientists that have been hugely expensive, difficult to find, but have disappointed on the job because they did not bring the value that they were expected to bring.

What companies should be doing, Puntikov suggests, is to establish “a

one-stop shop –to employ a firm that has experience and expertise in manipulation and managing the data on a physical infrastructure level, as well as having a sophisticated task force who know how to analyse the data and draw value out of it.”

Businesses can look at this outsourcing model in a similar way to the data-as-a-service model.

For example, a company can subscribe to a yearly service and get certain reports about their data every month.

First Line Software has built a team of individuals who are brilliant at the technology behind big data analysis, and understand how to put together infrastructure as well as configure and integrate data. It is about being ahead of the curve.

Data is extremely valuable to any company, and having it analysed by those with the right skillsets can really give firms a competitive edge.

INDUSTRY VIEW

Nick Puntikov is CEO of First Line Software Group +1 617 548 6426 www.firstlinesoftware.com

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Cyber-security: the weakest link

H

ACKERS ARE becoming ever more ingenious in their attempts to wreak havoc in the cyber-world. Despite increased awareness of the need for systems security, businesses small and large are increasingly vulnerable to attack.

The Talk Talk cyber-attack in October 2015 exposed the personal data of 157,000 customers, and the threat of severe reputational damage to companies as a consequence of hacking. Talk Talk’s clientele suffered no financial loss but the damage to the company’s brand was severe. The total cost to Talk Talk is reported to be a staggering £60million.

Many companies have increased their focus on cyber-security since the incident, but many more continue to make the understandable error of leaving everything to the IT department.

Even though hack attacks are increasingly common and more often reported in the media, employees are typically an organisation’s weakest link. Four out of five data breaches occur through attacks on employees such as phishing, malvertising, or simple social engineering.

Without doubt, investing in good IT security is vital to protecting data.

Alas, despite best efforts to prevent attacks with firewalls, passwords and

60m

£

The total reported loss to Talk Talk after the data of 157,000 of its customers was leaked last year

software solutions, recent events demonstrate that no computer network is impenetrable. Even that of NASA came under attack in February this year: the credentials and personal details of 2,414 NASA employees were reportedly released to the world.

Closing the employee loophole is equally important. Simple and effective measures can protect against the risk of human data breaches. Companies must create a culture of cyber-security.

This will include a number of simple precautions: all employees should be suspicious of unusual calls, visits, or emails enquiring about other

employees or systems. It is almost always relatively simple to verify such people’s credentials. Doing so is critical to cyber-security.

Despite the best possible IT precautions and employee training, cyber-attacks will sometimes succeed.

Insurers will share their specialist crisis management skills and experience to guide corporate victims through the incident. A cyber-insurance policy will also ensure your company is reimbursed for the financial loss arising from a successful attack.

Less reported, but potentially more destructive, is the loss of income a

company may suffer due to the failure of their computer systems. Almost every business in the developed world relies on technology and their computers in order to manufacture, trade and distribute their products or sell services. A good cyber-insurance policy will protect your company in the event that your network fails or is disrupted.

INDUSTRY VIEW

Laila Khudairi (inset, left) is head of cyber at Tokio Marine Kiln communications@tokiomarinekiln.com www.tokiomarinekiln.com/cyber

Having a risk plan for a defined benefit scheme has never been more crucial “No one knows what the next 10 years will bring, but we must expect more volatility, and the need for a plan to control and manage this risk is more crucial than ever” – James Auty, JLT

T

HE SHORTFALLS in UK private sector defined benefit (DB) pension schemes have doubled since 2006, despite employers making contributions worth £160billion. This is primarily the consequence of increasing life expectancies and low expectations of future investment returns. The estimated assets backing the promised DB benefits have grown from £0.65trillion in 2006 to £1.3trillion in 2015. However, over the same period the estimated cost of providing these benefits (often referred to as the liabilities of the scheme and estimated here as the cost of buy-out) has risen from £1.1trillion to £2.1trillion. This means that, collectively, deficits have doubled from £0.4trillion to £0.8trillion. On a per-person basis, this is the equivalent of £73,000 per DB scheme policy holder (including all active, deferred and retired members).

Putting this another way, these schemes will have to pay pensions to members in the future estimated to total £3.6trillion. With current assets

worth £1.3trillion, there is a gap of £2.3trillion – 1.2 times UK GDP (£1.9trillion in 2014) – that will have to be closed by a combination of cash contributions from the sponsoring employer, future investment returns and a reduction in liabilities through de-risking exercises.

It is vital that we learn from the lessons of the last 10 years so that they are not repeated in the next 10.

As shown in the figure above, the deficit has been volatile, caused by market experience such as the credit crunch around 2008 and the fall in

government gilt yields around 2011.

I am not saying that we should have been able to predict these events, but had more of these schemes had risk plans in place, the position could have been very different at the end. For instance, consider a risk plan which varied the proportion of assets invested in growth assets (such as the share market) compared with assets better matching the pension payments to be made (such as governemt gilts) based on the funding level. Such a plan might have seen the growth allocation increase in 2008 as

funding levels fell, but then increased the matching assets as funding then improved over the next two years.

The increased matching assets would then have provided more protection againast the fall in government gilts.

A few schemes have such risk plans in place now, but many more need them if we are to not repeat the last 10 years. The plan will not just cover the assets allocation but will also consider risks within the liabilites and assess these realtive to the strength of the employer sponsoring the scheme.

No one knows what the next 10 years will bring, but with the Brexit vote, speculation over when base rates will change and the impact of the new freedoms of choice in how pension funds are spent we must expect more volatility and the need for a plan to control and manage this risk is more crucial than ever.

INDUSTRY VIEW

James Auty is director and actuary, JLT +44 (0)7939 049982 James_auty@jltgroup.com

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Bridging the data divide Data is divisive. From project failure to escalating costs, management demands for better information are simply not being met BUSINESS INTELLIGENCE projects are high risk, high cost and take too long to deliver essential insight. No wonder data is creating board level rifts. So what next?

Matthew Napleton, sales & marketing director at Zizo, insists it is time for a fresh, business-driven approach.

B

USINESS LEADERS know that access to fast, trusted and reliable data is increasingly key, not just to competitive differentiation but simply to keep pace with the competition. Yet more than two decades into the data revolution organisations are now painfully aware that upwards of 80 per cent of business intelligence (BI) projects fail. That is, not just fail to deliver benefit, but fail to work at all.

And yet the need for better information is so strong, so compelling, that organisations continue to invest in a vain hope that, this time, it will be better.

So what has gone wrong? BI is a victim of its own self-promoted success, in many ways. Reporting and analytics tools, especially the current crop of highly visual, intuitive tools, are deceptively simple. They appear to turn base data, any data, into compelling and easily understood business insight at the touch of a button. The truth is very different.

BI is tough – disconcertingly so. And that is where so many companies have gone wrong. Believing the myth, hype and sheer misinformation surrounding BI, too many companies have assumed it would be easy – they have underinvested, especially in people, and made undeliverable promises to the business users.

The result? BI projects that demand ever more funding to deliver ever less corporate value.

Cost complexity The cost of the BI investment is also a huge point of contention because most companies simply do not understand the total cost of ownership of these types of data projects. Providing BI costs so much more than a snazzy reporting tool. By the time a company has factored in the database, data quality, ETL (Extract, Transform and Load) software and reporting tools, the typical cost for even a small, 50-person solution is around £200,000 per annum, and that doesn’t include salaries, training or hardware. By failing to understand the complexity associated with data extraction, cleansing and storage up front, companies find it impossible to make a valid business case. Instead, far too many businesses have invested in a pretty visualisation tool only to discover that it does perhaps 10 per cent of the job and without extensive additional investment in data quality and ETL technology, the tool is useless. At which point the realisation hits that the cost of people, time, money and systems work to address the rest of the BI project is untenable and the project is shelved. Another failed investment.

The success of any data project, especially BI, will always be compromised without accurate costing up front. Organisations need to be realistic. £1,000 per month on an analytics tool that delivers graphical key performance indicators (KPI) sounds great, but consider the full costs: how many people are running the project, at an employment cost of £50,000 each per year? How much has the training, the servers, the database and the ETL tools cost? Go for full

200k

£

Typical cost per annum for an in-house 50-person business intelligence solution

disclosure on the total BI investment and most companies will discover the true cost is closer to £25,000 per month. What ROI is that delivering to the business?

Old technology Of course BI can deliver value – massive, business changing value – but it demands a different approach.

The essence of the problem is that the vast majority of BI projects are attempting to achieve the impossible by using technology that was never designed for the job.

RDBMS systems that are designed for operational purposes are pretty useless for analytics. Attempts to shoehorn BI and analytics into RDBMS operational projects were, in retrospect, always designed to fail.

New technologies and systems designed specifically to handle analytics have been in the market for a while – they are mature and proven. With the right approach they can address the cost, time and risk issues associated with traditional BI projects. However, organisations still need to recognise the challenges of data cleansing and storage – even with the right technology investment.

Does it really make sense to make the massive internal investment in hardware, tools and, critically, people required to achieve BI success? Data experts are highly sought after – attaining and retaining good people is becoming a massive concern; even if the business gets the right infrastructure in place, the entire BI solution can be rapidly derailed when key staff leave. The reality is that most IT departments simply will never have the resources needed to deliver fast, accurate business insight.

define the business need and entrust the problem to a third party that already has the technology and skills required to turn the base data into business intelligence? To define a clear business analytical requirement, hand over the data and then receive, within a finite timescale, a dashboard on a mobile with eight different KPIs or real-time updates on sales in-store that reflect weather patterns or traffic flows?

By doing this organisations can remove the risks, provide cost transparency and can take the businessdriven approach that is at the heart of BI success. In a multi-channel world, with the continuous creation of new streams and sources of data organisations need to be able to experiment with data, change horizons and innovate at a predictable cost and with an acceptable level of risk. That is simply not possible with the old technologies and methodologies. Any business attempting to find value from BI with these outdated approaches is always going to be playing catch-up at best, or at worst throwing good money after bad.

Organisations clearly need to get information from their data. But there is now a choice: continue to take a high-risk, high-cost approach to BI and hope, with fingers crossed, that their project will be one of the 20 per cent that delivers, or adopt a business-led servicebased approach that leverages innovative analytics technologies. With this new approach based on a business model that both de-risks and reduces BI project costs, organisations can get the right information at the right price from their data, and get measurable business value for the business.

INDUSTRY VIEW

New model In an era of cloud computing and Everything As A Service, isn’t it time to consider a different model? How much more compelling for a senior manager to simply

Matthew Napleton (left, inset) is sales and marketing director at Zizo matthew.napleton@zizo.co.uk www.zizo.co.uk

May 2016

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The debate How can business make the most of the data economy?

Richard Branch

Fred Hermans

VP operations UK & Northern Europe, Semarchy

B

E BOLD – do something. Many IT executives fear a data management or big data initiative because the sheer scale of data available is daunting. Because of this inertia the value in their data lies undiscovered.

Data discovery is a good place to start, but don’t expend vast amounts of effort on this. Better a short, sharp exercise to examine the data, see if there is hidden value, and then move on. Of course, these analyses need to be based on accurate and timely data.

Semarchy specialises in data management software that espouses agile techniques to enable fast results. The insight gained provides very fast time-to-value, the risk is diminished because of the minimal resources expended. The message is clear: do not spend months or years talking; it’s better to get started now then grow incrementally. And remember, if a project is going to fail, it’s better that it fails fast.

INDUSTRY VIEW

richard.branch@semarchy.com www.semarchy.com

Mark Adamson

CEO Every Angle

B

EFORE THE Shard was built in London, Renzo Piano had to first develop a blueprint marrying award-winning design with constructional stability. He was well aware that before his iconic glass vision could emerge, months of effort were required by the construction team to clear the land, dig the foundations and lay the concreate and steel. Hard, messy, unglamorous work – but without it, the Shard wouldn’t have withstood the first ill wind that blew its way.

Now, at the dawn of the internet of things, it is easy for companies to forget these construction essentials. The lure of new customer insights and connections has many dazzled and excited by the prospect of big data. However, it is imperative that they prepare for this new world by laying down solid foundations; foundations based on the truth and integrity of their master and transactional data.

Without developing concrete small data foundations, companies may find their big data aspirations are built on sand. Capturing multiple demand signals is great, but of limited value unless you can translate into accurate action.

Director JLT Employee Benefits

W

ITH BUSINESS data multiplying faster than your average bacterium, it may challenging to keep up with developments in big data and the data economy – and the amount of data will only increase.

Big data plays a part in winning new clients and developing new solutions, but what we can’t forget to do is to lift our eyes up from the morass of data beneath our feet and think rationally about using it to the advantage of clients. Look for patterns in the data you hold that tell you what has worked for your clients and what hasn’t – and what they like and don’t like. Use those patterns to work out what others might want and structure your client conversations accordingly, consulting with them rather than selling to them. If you put your clients’ needs first, that will work in your favour in the end.

Big data tells you a lot in general, but clients buy on their specific needs – we need to harness both.

INDUSTRY VIEW

+44 (0)117 968 9725 Mark_Adamson@jltgroup.com

INDUSTRY VIEW

+44 (0)1235 841580 f.hermans@everyangle.com

Intuition or data? How business leaders make decisions can affect their prosperity

62% Percentage of executives who rely on gut feeling to make business decisions

T

HE WAY executives make decisions has become as important as the decisions themselves. Should they rely on intuition and experience, or back up choices with data? Striking the balance has become one of the most important skills a business leader can have.

The increasing volume of data available to companies gives them greater visibility of every aspect of their organisation, market, customers and suppliers. With so much valuable data and business intelligence technologies available, one would expect business leaders to rely more on data-driven decisions, rather than on intuition, to drive their company to success. However, according to a survey from Fortune Knowledge Group, 62 per cent of executives feel it’s necessary to rely on gut feelings to make decisions. The question is, why?

Relying on gut instincts can be easier and faster. Especially when the alternative is waiting on data to make an informed decision, which can take weeks. Not making a choice can be worse than making a wrong one.

But what if business leaders aren’t condemned to choose between gut feelings and data-driven decisions?

A new generation of business intelligence tools is rising with a significantly different approach: making business intelligence as easy as doing a web search. Users can analyse business data just by entering queries in a search box. Meaning data-informed decisions can be just as quick as any spontaneous, visceral choice.

Wizdee is the perfect example of one of these new type of BI platforms.

Imagine being able to grab a smartphone, ask “Expected revenue for this quarter” and a chart automatically pops into your screen. Wizdee allows users to analyse data just by speaking or typing queries using plain language. It connects to both cloud and on-premises data sources to make all business data easily accessible.

With Wizdee you can quickly gather all the knowledge you need to back up your gut feelings, because at the end of the day data doesn’t make decisions, business leaders do – and Wizdee can help you make the right ones.

INDUSTRY VIEW

+44(0)7584 287732 www.wizdee.com