VANTAGE POINT: Information Ecosystems

Information Ecosystems and Bridging the Gap from Data to Insights and Action

By Russell Evans, Vice President, Global Business Intelligence, and Kamal Tahir, Senior Manager- Commercialization and Market Leadership, Global Business Intelligence, The Nielsen Company

The concept of information connectivity is not new. If we go back in time and look at some of the great empires, they thrived because of how they acquired, distilled and utilized information of different disciplines together to develop a competitive advantage in their positioning in trade, military and infrastructure.

The key factor today is the availability of exponentially increasing information and our potential ability to leverage this increased information as a source of competitive advantage. The information is richer in scope, granularity and frequency. At the same time we have access to increasingly powerful processes and tools to help us manage all this information, and to make good use of it.

Let's start with a simple hypothesis; it is unlikely that our industry will get to a place where there is one master system which meets all our business needs. This is true for two main reasons:

1. We live in a dynamic world. Things change constantly, new sources of data, new types of data, types of data previously not used or deemed important, or even needed. To have a large stable platform that is agile enough to tackle these dynamics is not an easy task.
2. Even if it was possible, it would not make sense. Specialization has its advantages ranging from speed of development to specialized focus and best of breed approach.

For the foreseeable future at least, we will have groupings of different systems, applications, tools and technologies coexisting. To leverage this wealth of information, alignments must exist between these clusters as well as within these clusters.

The Information Ecosystem

Initially, it is important to distinguish the essential elements of the information ecosystem; data, information and insights.

Data: Whether you are working with internal or external raw data, it must be cleansed to provide a solid foundation, or the rest of the process will crumble.
Information: Stacks of relevant data organized by function. This requires data that's both synthesized and organized.
Insights: To provide real value, an insight must reflect five key elements:
   1. Specific
   2. Timely 
   3. Relevant
   4. Critical
   5. Actionable

By no means are we saying data is not important. Quite to the contrary, it is the main construct on which the ecosystem exists. Data is the core component, or building block, without data there is no next step. For data to provide the necessary fuel, it must be clean and timely.

Information is the organization of data into logical stacks. These stacks can be organized in numerous ways including functionally (sales, marketing, finance), regionally (north, central, country) or vertically (automotive, consumer goods, banking).

True insights address not only the "what" of business performance, but also "why" is it performing the way it is, and "how" one might influence that performance. For years, industry reports have been adept at explaining what happened. But, to what degree does reporting enhance efficiency and value? If an information ecosystem is configured to predominately address the "what" of past performance, companies will risk spending a disproportionate amount of time and resources focused on the rearview mirror.

To navigate the road to success, which comes at an ever-increasing velocity, we must have visibility to what lies ahead. That is why insights are essential. Insights work similar to headlights; they illuminate your path ahead. The further ahead you can see thereby mitigating risk and giving you the ability to move faster. Insights let companies plan effectively, and facilitate business decisions that help grow profit, volume and share.

Anatomy of the Information Ecosystem

Data Collection -- This is where it all begins. When data is not clean, it is like introducing a contaminant into a habitat. All it takes is one weak component to harm the entire ecosystem. Look for sources that have a long history as a market leader and will bring substantial value-added intellectual property to data collection.

Master Data Management (MDM) -- As stated earlier, information is data organized in logical stacks. Those stacks could be logistics information, sales and marketing information, or enterprise resource planning (ERP) information. To make those stacks work together, MDM is required. MDM is the initial and ongoing, harmonization and synchronization of data assets.

For example, in a global context, it provides multi-country harmonization with a consistent metadata layer. That broad integration capability allows the ecosystem to interoperate and keeps it healthy. Relying on manual updating of reference data and metadata introduces risk to maintaining a healthy ecosystem. Look for companies that either provide tools or offer MDM services.

Demand Signal Repository -- With the initial two components functioning well, demand signal can help pave the way for savvy business choices. Look for a flexible database architecture that can dynamically join data, enabling delivery of data on a daily, weekly, or should your business require even day-part basis. An example would be if a company decides to run a three-week promotion at specific stores, and wants to keep the shelves stocked. A demand signal can be produced each day indicating what was sold, what is in transit and what is being produced. It can then generate a forecast by store that is synchronized with delivery dates and times.

Business Intelligence (BI) -- The BI layer is the face of the ecosystem to your enterprise and to your collaborative partners. The BI layer takes full use of the entire ecosystem. While demand signal can address some key business concerns, the source of true insights is business intelligence. The rest of the ecosystem feeds into this layer. The BI layer is where you drive value through addressing business issues within context and drive intellectual property by leveraging best demonstrated practices (BDP) workflows combined with your own.

We are not talking about a simple BI tool that displays information, but BI in context. To produce BI -in context- requires advanced analytics built into the layer along with work processes that can integrate with your own work processes.




Fostering a Healthy Ecosystem

The best insights arise from a healthy information ecosystem with technology data stacks that have a high level of interoperability, where each component from data collection to business intelligence plays an indispensable role.

A strong information ecosystem allows an enterprise to mine data in order to reveal the root cause of business drivers. The inner workings of this ecosystem are made of work processes that support each other with a high level of interoperability.

The ultimate goal is informed business decisions based on relevant insights. If any component is not healthy, the entire ecosystem suffers. Therefore, businesses must carefully guard the health of each component of the information ecosystem. To maintain a healthy information ecosystem, industry leaders adhere to these best practices:

> Utilize multiple sources of cleansed data
> Create stacks of information that are organized, relevant and harmonized
> Drive integrated information to the demand signal
> Incorporate a business intelligence tool that reveals high-value insights to drive effective business decisions

The ability for companies to implement highly tuned ecosystems driven by technology, has proved challenging. The challenges are vast and range from, lack of change management processes, to legacy systems and applications, to a closed ecosystem built internally making it rigid to many of the new technologies necessary to enhance the environment. With the increasing amounts of data and acceleration of change in our environment from channels to consumers, the value of a credible insight is higher than ever. The ability to make faster choices that are more informed will separate good and great organizations. To achieve that competitive advantage, decision-makers need to sort through ever-increasing sets of complex data.

Because the amount of data is increasing faster than our ability to manage, a gap forms. The gap between the amount of data we manage and the amount of data we utilize to make informed business decisions is the information ecosystem competitive advantage zone. This zone encompasses cost of data storage, harmonization, mining and maintenance. If a company is spending resources on any of the above and not utilizing the information, it has a negative effect on investment ROI.

The companies that close the gap most efficiently and effectively will win in the marketplace and the success of that endeavor hinges on a vibrant information ecosystem. So the question becomes, how healthy is your ecosystem, and how healthy is your competitors'?