A Race Towards Cloud: Commodisation of Systems and Analytics?

Having recently attended Teradata Partners 2015 user conference organised by and for clients of Teradata, the push towards Hadoop based solutions is relentless – the vision of benefits remain strong while the evidence of business value actually realised remains small. Perhaps it’s just early days and organisations are still learning. The big buzz is around cloud.

Perhaps the interest in Hadoop is partly driven by the opportunity to get the IT services in to the cloud. This solves a number of complex IT management challenges. By outsourcing platform provisioning, data centre management, capacity planning, specialised skills development and retention, the cloud offering can potentially deliver on the analytical agility and flexibility required by the business. We now have organisations that are going through their application and analytical systems one by one and determining what can be outsourced to the cloud, particularly to Amazon.

So we can have a future where any organisation just need to sign-up to a cloud provider who would have the environment (and perhaps applications) to get the business going. They can get core financial systems up and running, get access to product applications when they need it and even access operational and analytical CRM solutions this way.

In its full maturity, this environment leads to IT systems and analytics as no longer a source of competitive differentiation. We have seen the bandwagon effect of IT staff outsourcing (everyone’s doing it now) and this is definitely following the same path. Although Tom Davenport’s recent article shows a reversing trend.

This got me thinking about what then becomes the sustainable competitive advantage of companies. Strategy? (most organisation have similar approaches to the market): People (they have been outsourced and worse comes to worse, pirate key staff): Ability to Execute (alot of products are IT dependent and hopefully will no longer be a constraints – so is this mainly customer management?).

What about analytics? Is it the ability to see things happen ahead of competition; formulate decision options backed by data and execute quickly; and be ready for the next challenge?

I see a lot of initiatives starting to focus in to getting the IT services and platforms commoditised in to the cloud which is perhaps the early start of a major transformation in the industry. But here is the thing. . . have organisations focused enough in preparing and improving their analytics capability if it is to become a more prominent source of a company’s competitive advantage? Moreover, analytical agility is not solely a platform issue. Often it is the inflexible business and IT process governance that has not adapted to the new paradigms.

Organisations can start the preparation process by doing a stock-take of their current capabilities and organisational environment beyond platforms and IT provisioning. Best to let people outside the organisation do an analytical maturity assessment to get a fresh and unencumbered view.

Renato Manongdo is a Senior Financial Services Industry Consultant at Teradata ANZ and is also the practice lead for Business Value Assessment in Asia Pacific. Connect with Renato Manongdo on Linkedin.

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