By Jeff Spicer, CMO at Yellowbrick Data
Analytics matter more than ever.
Six months into the pandemic-shaped business environment, I feel completely confident making this statement. A recent conversation hammered this home for me.
I was speaking with an industry consultant who told me, “Most companies now are starting to reach a kind of equilibrium.” She didn’t use the vastly overused “new normal” terminology; rather, she made the point that today, with six months of insights to look back on, forward-thinking businesses are not languishing in surviving-through-disruption mode. There’s now a track record of companies that have successfully navigated the past six months of uncertainty to draw upon.
I’ll take that thought a step further — from what I’ve seen, businesses employing a modern analytics infrastructure have a clear competitive advantage when it comes to knowing what’s going to change in the near term, how fast things are going to change, and how quickly they need to move to stay ahead of the curve. And what company doesn’t want that, especially now?
It’s not that analytics didn’t matter prior to COVID-19. They certainly did. But the infrastructure that delivered them was, in many cases, a patchwork of legacy systems underpinning disparate point solutions with an occasional top level of modern analytics tools. For many companies, that worked well enough to get by. Now, in our current phase of not pre-COVID anymore but certainly not post-COVID, that’s not good enough to run a business with the efficiency and insights required for optimal operations and competitive advantage.
So, what’s a business to do? Modernize your analytics infrastructure sooner, not later. In fact, your business can’t afford not to.
Years worth of digital transformation in months
Investing for the future is critical for every business. From a technology standpoint, we’ve all been exposed to the hype around “digital transformation” and the potential it is supposed to unleash. While digital transformation’s track record is mixed, there are enough success stories to keep believing and investing. Cloud computing, databases, AI, and mobile are among the most important. Not surprisingly, all of them play important roles in a modern analytics infrastructure.
The “big idea” with digital transformation was — and still is — to utilize modern technology and leave legacy products behind in order to power past the competition (i.e., the ones that just can’t quit their legacy infrastructure). And, if done well, it works! The issue has been that while most companies have been at various stages in their journey — including planning but not yet investing — it’s been taking a long time, even years in many cases.
Frankly, I see this every day as the CMO of a modern data warehouse for hybrid and multi-cloud environments. Outdated, inefficient and expensive data solutions piled on top of each other and delivering the bare minimum of analytics needs are still chugging along – even as the cutting edge of digital transformation leaves these architectures further in the dust. What’s been missing is having enough modern infrastructure to future-proof the analytics infrastructure, balanced with a strategy of divesting from remaining legacy products without causing any hiccups.
One of the trends in our current business environment that COVID has laid bare is separating the companies that have been investing wisely in digital transformation efforts (such as analytics), and those that have not. It has exposed weaknesses that have been around for a long time but managed enough to keep going. One of my colleagues described it as what happens when the tide goes out and you can see all the detritus on the shoreline that had been covered up at high tide. It’s not pretty. Fortunately, that’s changing in the wake of COVID-19 as companies work to triage the weaknesses that can’t be allowed to hide any longer.
Businesses are investing for the future at a more rapid clip and speeding up slow, stalled and even nonexistent digital transformation efforts. According to Adobe’s Digital Economy Index report from June (summarized in Forbes), COVID-19 has accelerated e-commerce growth “4 to 6” years. Other reports I’ve seen extend that out even further.
Along those same lines, according to a recent study by McKinsey & Company, there’s a “great acceleration” going on right now. The report states: “Companies with resilient, future-ready business models positioned to ride these trends have pulled further away from their peers, while those with legacy business models have, for the most part, fallen further behind.”
Why a modern data analytics strategy matters — right now
Analytics underpin much of the value that digital transformation brings. You have to be able to derive insights from the data your technology generates to realize value from it and run your business successfully. The faster and deeper the insights are, the better. But, despite the technology to power a modern data analytics strategy being readily available, it is constantly under intense pressure from internal and external forces.
Internally, businesses are faced with increasing data volume, numerous and disparate data sources, growing complexity, and an expanding demand for interactive analytics. On top of that is pressure to accelerate a transition to cloud computing.
From an external standpoint, I am seeing legacy vendors failing to do any meaningful innovation in data warehousing (and let’s not even talk about Hadoop-based data lakes!), cloud-only vendors hitting a price/performance wall due to a reliance on VMs tied to commodity hardware, and most acute, business models breaking under the pandemic-induced strain.
The bad news? I see these negative forces frequently. It’s not surprising given that a lot of existing analytics infrastructure isn’t up to the challenges any longer because it was optimized for the pre-COVID environment. The good news? The strategies and solutions to overcome them and optimize analytics infrastructure are out there if you take the time to do your homework.
Create an analytics infrastructure that propels your business forward, with hybrid cloud, price and performance leading the way
No matter what analytics tooling you choose to use, the most effective architecture to support it is hybrid cloud. This approach combines on-premises infrastructure with public cloud platforms to blend performance, flexibility and agility — to find the aforementioned “equilibrium,” if you will.
As someone who lives and breathes data infrastructure and analytics every day, I have a few pieces of advice that have been sharpened by learnings from the past six months.
First, being able to do real-time, ad hoc analytics – at scale – at the best possible price/performance ratio is the most important business problem to solve today. The fewer the limits on both, the better your chances for succeeding.
Second, having the flexibility to deploy analytics applications anywhere is a requirement today. You shouldn’t have to choose between on-premises and cloud. Choose both. Go hybrid.
Lastly, I would caution everyone reading this article against relying too heavily on “speeds and feeds” at the expense of price and performance. Seeing an “X” next to some numbers in a vendor’s marketing materials is great, but that alone is not going to solve your analytics problems.
Learn quickly, adjust quickly
As with any period of uncertainty, the people and companies that learn quickly from what’s happened and constantly adjust their strategies and tactics are the ones that survive and, in some cases, thrive. I’m seeing this now as we pass the halfway point to the first year of life with COVID-19.
The key is having data to work with and the agility and strategy to make constant course corrections to stay in the game — whatever your game might be. That’s what’s happening right now across industries and geographies. Analytics are paving the way for success in a pandemic, and deploying a modern infrastructure to generate them is now table stakes for getting there.