As recently as a decade ago, many executives who were asked to identify a transformative business technology likely would have pointed to centralized ERP systems as the catalyst driving new business opportunity. In today’s business climate, the engine enabling transformation isn’t a technology at all. But it is forcing organizations in every industry to rethink everything from strategy, to business models and processes, and even to how decisions are made.
The engine is big data, which — even more so than a technology trend or concept — is driving a fundamental shift in how businesses create value. This shift is from the traditional approach of a highly structured workflow-centric data and information architecture to one that supports data exploration, predictive analytics, and real-time decision making to leverage vast volumes and varieties of data.
This shift has taken root across businesses in all industries and sectors. Our clients are trading IT complexity for business agility as their ERP systems evolve to capitalize on making data more accessible, more meaningful, and more critical to competitive advantage and business success. Exploring big data means using rapidly advancing analytics technologies — such as database platforms like SAP HANA and data discovery tools like SAP Lumira — to enable insights and decisions that drive innovation and change business models, customer interactions, and operations across the entity.
Big Data Creates Opportunity
With oceans of big data and advanced technologies, decision makers are no longer limited by relying on complex and rigid pre-aggregated data, but are instead using advanced technologies to rapidly explore large datasets and derive solutions to complex business issues.
Companies that successfully navigate this shift will be better positioned to achieve profitability, competitive advantage, and growth. Much like a rising tide that lifts all boats, today’s technology is an equal opportunity enabler of this innovation, but only for those who are willing to put their boats in the water. Most organizations should by now recognize that traditional analytics — formulating questions in advance, querying IT, and coping with long lag times for IT to engineer answers — is as limiting as fishing from shore.
With oceans of big data and advanced technologies, decision makers are no longer limited by relying on complex and rigid pre-aggregated data, but are instead using advanced technologies to rapidly explore large datasets and derive solutions to complex business issues. It’s important to note, too, that driving innovation entails more than merely using analytics tools to churn through an increasing volume of transactional data. With the increasing importance of social media, enterprises are devoting more time and resources to analyzing social sentiment across a wide spectrum of sources to create new revenue streams. Informed decisions must be made today, not tomorrow. Cloud technology reinforces this changing paradigm: an enterprise requires flexibility and scalability to support immediate action on fluid datasets.
A New Way of Thinking
Within these dynamics, it’s easy to see that big data is much more than a technology challenge. Instead, its far-reaching implications can potentially affect the entire enterprise — its strategy, organization, business case, workflows, and people. Big data is not limited to finding new ways to generate reports or compliance updates. It’s about answering this fundamental question: how does a business become, at its core, an information-driven organization?
Where do we start? That’s the question companies often grapple with when preparing to launch into the sea of big data. At PwC, our deep understanding of and vast experience with big data issues helps organizations navigate through potentially rough waters. Essentially, there are two methodologies at work, with the difference stemming from what goals the business has identified:
A top-down approach starts with exploring all big data possibilities; PwC assists with developing a wish-list of analytics initiatives that will drive business value. When potential is demonstrably identified, PwC then can help companies affirm their business case for investment and build out data and analytics capabilities.
A business issue-focused approach, conversely, starts with a specific tactical problem; the business may or may not have the IT infrastructure in place to deliver the answer. While data is available already, for the most part, it’s more a question of how to use this data in a predictive capacity to arrive at new solutions for an existing challenge.
So whether organizations start with general “what-if?” scenarios or specific business opportunities in mind, both approaches involve becoming highly data-centric in decision making, and that will lead successful companies to the same place: a big data and analytics capability that will transform the way they do business. This involves more than a technology upgrade.
Big data questions cannot be answered in a one-hour strategy session. Capitalizing on this transformation requires the strategic thinking, change management capabilities, and architecture skills for which PwC is known. And while PwC certainly understands the considerable technology and cost impacts involved in meeting this opportunity, our strategy-first, technology-second approach toward solving our clients’ issues and challenges is well suited for the transformation enabler that is big data.
The Time Is Now
So, why are many organizations still fishing from shore, so to speak, when it comes to netting actionable intelligence? One of the hesitations we hear stems from the general perception — accurate or not — that IT has long been an impediment in terms of time or cost to driving innovation.
A common misperception is that ever-increasing volumes of data and more advanced analytical tools will only exacerbate this issue. Combine this with the fact that big data is often a difficult concept to grasp in terms of how it will translate into immediate, tangible benefits, and organizational reluctance to embrace it is understandable.
To help allay these concerns, we often recommend that our clients make a relatively small investment as a short-term discovery exercise to explore value opportunities and ROI potential. This is often a precursor to organizational buy-in for large, transformative projects. In our experience, the leap of faith akin to launching one’s craft into recently uncharted waters is rewarded several times over.
Tools like SAP HANA exist to enable this transformation where business agility trumps complexity, and decisions are supported by and based on real-time data. Many organizations today already are using advanced analytics to completely change their business models and transform their business, including how they interact with their customers and how they deliver products and services more efficiently and cost effectively.
Gaining a Competitive Edge
The organization that accepts the transformation taking place and takes action to drive business value is well positioned to gain a significant competitive advantage. Conversely, to continue to rely on complex and rigid pre-aggregated datasets to drive decision making is to risk alienating a customer base that is no longer satisfied with the slow track.
In today’s consumer-driven economy, customers expect to have an abundance of data with which to make informed decisions; everything from where to go on vacation to which car to buy. This is increasingly true of business as well, and failing to use the available technology is the consumer equivalent of walking onto a car lot without having done any due diligence. Five years from now, big data will have completely changed the way the enterprise handles information flowing through its ERP systems.
Historically, increasing profitability entailed finding ways to make goods or services more inexpensively and reducing cost by increasing efficiency. We are now at the point where big data opportunities are arising just as those marginal cost opportunities are shrinking, and it’s becoming clear that the next margin advantages will stem from superior analytics.
In the not-so-distant past, when the current technology meant implementing an ERP system to integrate information across an enterprise, PwC was there to assist clients and SAP customers with strategic decisions to help benefit from their investments and understand business value.
Today, as the big data wave begins to crest, PwC’s long-standing strategy-first methodology is especially well suited to help SAP customers ride along on this transformative journey.