Caught in the Crossfire

By Michael Vizard  |  Posted 02-19-2013

Caught in the Crossfire

By Michael Vizard

As is often the case, CFOs will rightly insist that ERP applications are the official systems of record. But from a practical perspective much of daily business is now being managed via CRM and social media applications. The CEO and the board of directors, of course, wants all these systems reconciled, which unfairly puts CIOs squarely in the crossfire between different business leaders that often have conflicting business priorities and objectives.

“We see this issue all the time. It’s definitely a tough time to be a CIO,” says Paul Allen, worldwide service line leader for finance & analytics for Hewlett-Packard. “But it also creates a mandate for the CIO to solve the problem.”

Savvy CIOs see this conflict as an opportunity to leverage some creative tension to finally address a range of application integration and data management issues across the enterprise. In fact, new big data and in-memory computing technologies may finally give CIOs control over data in a way that has eluded them since the days when mainframes reigned supreme over all of IT.

Unfortunately, it usually takes a major event of one type or another to get organizations to focus on the core problem.

Over a decade ago when DirectTV wanted to launch NFL Sunday Ticket, a service that lets subscribers watch every NFL game being televised on any given Sunday, the company had multiple systems of record in place that made it difficult to share revenues with the various networks televising the games. To solve the problem, the senior management team simply declared one application would be the company’s official system of record.

“The senior management team recognized the need to address this issue back when we had nine different systems,” says Mike Benson, CIO of DirectTV and a member of the Technology Business Management Council, a nonprofit organization of IT executives.

Unfortunately for CIOs, with the growing usage of CRM systems there is now more tension than ever between sales and finance.

“We’re seeing CRM systems increasingly becoming the system the business relies on more simply because that’s where they get the most visibility into what’s really happening  in the company on a daily basis,” says Eric Berridge, CEO of Bluewolf, an IT services firm.

Brandon Brown, CIO of Trident Marketing, a direct response marketing firm, says this issue is more pronounced in some vertical industries than others. In manufacturing industries where transactions still tend to take place on a quarterly basis, the ERP system still dominates. But in a lot of business-to-consumer transactions, Brown says there tends to be a lot small, high-volume transactions that are happening in real time. That kind of business environment tends to shift the focus of the action within the company to the CRM system.

“It now really depends on the nature of the industry as whether the business is going to be driven by a CRM or ERP system,” says Brown.

Brown also notes that with advances in analytics platforms from vendors such as IBM it’s becoming easier to unify disparate business processes and applications.

Caught in the Crossfire

In fact, as advanced analytics continues to evolve alongside the rise in-memory computing, the data management pendulum may finally be swinging back in favor of the CIO.

Many CIOs have been trying to unify business processes via application integration projects that make sure there is a single truth manifesting itself across every business application.  Conflicting data from different applications, however, can easily wind up rendering those applications all but useless. In addition, organizations often wind up having to deploy analytic applications against data warehouses that add a lot more complexity and expense.

Simo Said, vice president of database and technology for lines of business and industries for SAP, says unifying all the raw data in one system is one of the major business benefits of investing in a system such as the SAP High Performance Analytic Appliance (HANA). In effect, HANA becomes the system of record for processing all data in real time, which can then be accessed by any application that either runs directly on top of HANA or via an application programming interface. Rather than having multiple copies of the same data running throughout the enterprise, HANA provides an opportunity to centralize all that data in-memory in a way that makes distributing multiple copies of data around the enterprise unnecessary.

SAP HANA is not the only database platform that IT organizations can opt to process data in memory in real time. Exasol, for example, makes it possible to run existing SQL applications on top of an in-memory database. Conversely, Starcounter has developed a NoSQL database that runs completely in-memory.

Alternatively, some organizations may simply get by with Apache Hadoop implementation, which may not be as fast as an in-memory database, but at the very least allows IT organizations to more cost effectively build big data analytics applications.

Obviously, it will take some time for the transition to in-memory computing to fully play out across the enterprise. In the meantime, CIOs, in the absence of a corporate mandate that identifies one particular application as the system of record within the organization, may want to bide their time.

The simple fact is that a lot of the division that exists in many organizations winds up being reflected in the IT systems that support business units that are either not quite as closely aligned as they might be, or are hostile to each other because the underlying business model is fundamentally flawed.

Of course, that doesn’t stop anybody on the business side from accusing IT of not understanding the needs of their business unit, even though those needs are often in direct conflict with the needs of another part of the business. More often than not, CIOs are simply making the best of a bad business situation that is currently, but perhaps not permanently, beyond the means of their control.