Digital Transformation and the Need for Data Connectivity
“Digital transformation is really the idea of using digital assets to drive a business. That’s the quick and dirty definition of it,” said Craig Chaplin, Senior Product Manager at Magnitude Software. But amassing digital assets alone won’t lead to transformation without the ability to connect those assets to meaningful insights. Fortunately, businesses are waking up to the important role connectivity plays in digital transformation. “We’ve seen a rapid shift in awareness at the enterprise level beyond seeing connectivity just as a tactical tool, to becoming a business imperative,” remarked Tony Fisher, General Manager at Magnitude Connectivity.
Chaplin said that the ultimate goal for many businesses is to either stay competitive or become more competitive, and companies approach the process of digital transformation in a number of ways. Some use digital tools to create cost savings, some start relying more on data for planning, and for some, existing manual processes are converted to a more automated or digital process.
In disrupted markets, such as consumer transportation, businesses are reacting to outside factors affecting their ability to compete. How quickly can a taxi company get a driver to a customer looking to be picked up, when doing everything by a phone call is no longer appropriate? Chaplin remarked that:
“If everyone else around you is transitioning to a more digital approach, then you’re going to have to stay current with them as well, and having digital assets and digital processes in place facilitates that.”
Opportunity Drives Change and Disruption
Why are companies changing so rapidly? The simple answer, Fisher said, is because they can. Not that long ago, IoT, mobile, social platforms, and other transformational technologies were unavailable. Their emergence has given rise to organizations such as Uber because technology advanced to a point where new business models could be created.
The same is true for existing large companies that develop large capitalized equipment — organizations like Caterpillar and GE. These companies were able to change their business model by drastically reducing the amount of time, energy, and resources it took to do maintenance on some of the big systems they sell.
Chaplin echoed Fisher’s assertion that these companies needed to stay competitive by reducing the cost of the way they managed their customers and their equipment. The emergence of new technology gave them the means to change. “It was something they couldn’t do without IoT, without cloud, without mobile, or without some of the analytics and machine learning things that are prevalent today.” Without these developments, he said, companies wouldn’t have been able to embark on these alternate business ventures.
Changing User Needs
Chaplin attributed some of the demand for new technologies to how users have changed. The user base is much broader, where before, users were primarily IT professionals or business analysts with a deep understanding of the role of data in business success. While it’s no longer that simple, Chaplin said, “The real power comes when you can start to expose those digital assets to other users as well.” Workers on the factory floor, for example, the people driving trucks, and the people servicing farm equipment are starting to understand the need for data to stay competitive. “You really need to be able to cater to the different user types that are interacting with it. That’s a pain point and an opportunity.”
Varied Sources Complicate Access
Another factor Chaplin sees as important is a lack of unified data access across cloud, on premise and hybrid environments. “We’re no longer talking about simple systems that manage all of this data.” In the past, a company may have had one corporate system housing all of the company’s data in a warehouse. Although that legacy system is still an important part of the business, data stored in the cloud, unstructured data from social media, application data, and other sources are now added to the mix, creating another pain point with an opportunity as well.
Companies are racing to manage access without overloading the scarce resources of their IT departments with the need to configure access to so many different user types wanting data from multiple sources.
Fisher said that organizations are now faced with change in the workforce, requiring a different type of worker. The utility company that formerly sent an employee out to read the meter now needs workers who are able to understand the systems that consume digital information and move their business forward. “It’s a real change in the work force because it’s all been digitally transformed.”
An Infinite Cycle
Both external and internal applications have become commonplace, which is impacts the variety, the volume, and the velocity of data available to the business. Having access to the differing sources of data applications comes with the responsibility to combine it and consolidate it in such a way that it makes sense across these applications.
In addition, it must be consumable by business analysts and the rest of the business, he said. Fisher describes it as an infinite cycle, where more and more applications are added, generating more and more data, while legacy systems are still used along with multiple cloud instances and external data from third parties.
“This leads to a need for consolidation of more and more data, which leads to additional business ventures, which leads to more applications — and you just keep that cycle going,” he said. Companies are struggling to gain insight from these disparate proliferating sources, but without connectivity among them, true digital transformation is not possible.
Connectivity Enables Transformation
“Data connectivity has never been particularly easy,” said Chaplin, but there are proven opportunities for value.
Access to reliable analytics provides value for data-driven decision-making, and data from various applications can be used in new ways to see unique business opportunities. Transparency and compliance is possible for highly regulated businesses, and operational efficiency can be gained for more reliable supply-chain management.
Companies that have developed transformative business models empowered by the innovative use of data include:
- Transportation companies such as Tesla, Uber, and Zipcar
- Pay-as-you-go services, like Spotify and Netflix
- CAT, GE, and Eaton, using just-in-time maintenance
Why a Data Connectivity Platform?
Gone are the days where companies are only accessing two or three different sources of data, he said, so the challenge is to work with multiple different data sources but to simplify it in a way that can be deployed more easily for the company. While there are multiple ways to provide connectivity, a connectivity platform can provide additional benefits:
- Lower costs for integration and validation as well as the elimination of the need for multiple drivers
- Streamlined management provides a simple user-friendly experience without the need for IT involvement
- Centralized governance, usage analysis, and monitoring, with a single place to manage user access
- Personalized views
The Gateway Solution
“Magnitude’s Gateway platform provides for that single connectivity pipe and helps manage all that connectivity out to those sources,” said Chaplin. Because it provides a centralized data connectivity platform, additional services — such as access and privacy controls — can be included. “By having that centralized, IT and business have a better awareness and can monitor and audit who’s accessing data.”
It’s not just about providing access to the traditional sources, he said, but also providing it to SaaS applications or applications running in the cloud, such as Facebook or Sales Force, as well as graph data base, which has various use cases, or time series, which is often used for IoT device data.
Providing access to these different data types can be challenging for use with general purpose applications such as Excel. To address that issue, Gateway provides connectivity through JBDC, a data connect client in standard use for several decades, he said.
Optimization of the Supply Chain
With understanding of production schedules and real-time inventory levels, a manufacturer can anticipate the need for a certain part, Fisher said. “And it’s because of digital transformation that I can not only see that need, but also place the order to replenish it in time for the manufacturing process to continue without interruption.”
A lot of what is happening in the digital data world is facilitating the ability of the business analyst to drive the business forward and make decisions independent of the IT community. That’s a lot of what Gateway is about as well, he said. “It’s making the digital assets of an organization available to the business without a whole bunch of disruptive unnecessary IT involvement in the whole process.”
Take a listen to DMRadio Deep Dive episode “Transform! The Information Economy Demands Agility,” with Fisher, Chaplin, and facilitator Eric Kavanaugh of the Bloor Group. It is an expansion on the topic and discusses digital transformation and data connectivity in even more depth.
Image used under license from Shutterstock.com