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Greetings, everyone, and best wishes for a great start to 2014. In this new year, utilizing best practices and skills learned in 2013 will be critical for optimizing the use of efforts to support both business and IT. In 2013 many organizations made progress in balancing technology decisions across business and IT as the lines of business continued to take leading roles in investment and prioritization. Major investments were made in business applications using software as a service,VRLogobug400x400 business analytics and mobile computing applications. In some other areas of innovation, particularly big data and social collaboration, deployments are just beginning to happen and a significant amount of projects are in experimental and proof of concept than enterprise use.

As usual, there was no shortage of diatribes from technology suppliers. Gamification and virtualization were loudly touted, but the most exaggerated were variations on the “Internet of things,” which at times seemed to include, well, anything found anywhere on the Internet. Beneath the hype, however, is something very real: the need to interconnect people across the Internet and the enterprise more seamlessly and in ways that would have seemed futuristic not long ago. All this is having an impact on the IT function. As many of these technology innovations are becoming part of business, IT is beginning to be become more aligned to what the business needs now and in the future, backing off from making assumptions about what is needed. Savvy IT pros, from the CIO down, realize that If business decision-makers are not convinced IT will make such an alignment, they will insist on going their own way and not only spend what they believe is required to improve operation of the business processes they are held accountable for, but also invest in areas that they believe will give them a competitive edge and lead to the best outcomes for their areas of responsibility. This sets the stage for our focus in the new year.

Building on our work in 2013, we have set our 2014 research agenda, which is geared toward helping you figure out what makes most sense in the new landscape. Using our market research approach based on proven methodologies, we will provide a new generation of insights on how to get the best use of technology to support business and IT. I hope that you will look to us for the research facts and analysis that inspire you to make decisions based on a balanced perspective for both the business and IT sides. Don’t let your direction be skewed by advice from only an IT or a technology perspective; instead, make sure it is based on perspectives that are relevant to your business areas and the demands of your industry. Without this balanced approach you risk taking the wrong path, wasting time and valuable resources and lengthening the time to value in your markets. To get a balanced perspective on a variety of critical business concerns, you can dive into our research agendas and through our announcement of them. Here’s a snapshot of them.

In the overall area of technology innovation for business and IT, our research agenda for 2014 provides guidance to help organizations realize the potential of technology in the critical areas of big data, business analytics, cloud computing, mobile technology, social collaboration and social media. Our benchmark research shows that in each of these areas organizations made significant strides in 2013 in terms of maturity in their deployments and use; we recognized a number of them in our annual awards program for top technology suppliers and organizations across business and IT. The most powerful outcome of these technologies is when they are blended together to meet specific business needs in innovative and transformative ways.

For the Office of Finance, new research in long-range planning and finance analytics will provide a strategic guide on what it needs to drive the best success from its efforts. Not only does Finance maintain a leadership position for its own processes, but it increasingly provides leadership and guidance for human resources and IT as well as assistance to sales, marketing, customer service, the supply chain and other areas that are key to the operations of a corporation. With a full review of financial management vendors in our Value Index, we will bring a deeper assessment of applications for finance and business planning. Our Office of Finance research agenda for 2014 not only focuses on some key points in the areas of financial management and next generation of business planning but also on pricing, profitability and even taxation, areas that are sometimes lost when suppliers talk about ERP solving every business problem – which it does not. New research on the overall direction of the office of finance will bring a reality check to what finance is investing upon in regards to technology and business processes that meet their specific needs. Be sure to follow the astute analysis of trends and markets by Robert Kugel, our senior vice president of research.

Another top priority is utilizing people effectively, a critical aspect of every business requiring investments in human capital management that enable organizations to effectively recruit, engage and retain quality workforce with the best possible employee experience. Organizations cannot just overhaul traditional HR technologies – they must also integrate talent management for salary workers and workforce management for hourly workers to ensure that the entire workforce operates efficiently and that the investments made reach their full potential. HR, an early adopter of cloud services, is now in a transition period in which it needs to unify the myriad applications it has rented. In many cases this means consolidating suppliers to get a more cohesive and streamlined view of employee performance and simplify employees’ access to systems. In our 2014 Human Capital Management research agenda, more capable HR systems and advances in mobile and social technologies that support learning management are key priorities; this agenda builds on newly released research on workforce management and human capital analytics, and upcoming payroll management. If you haven’t already had a chance, check out the market and technology analyses of Stephan Millard, Ventana’s vice president and research director, as you go forward with your human capital management efforts.

Other areas of continued refinement are sales and marketing, which of course are critical to achieving successful business outcomes and optimal financial results. Improving sales performance requires a concerted effort, and over the past decade we have been refining a blueprint to ensure that sales teams have the proper applications and technology to support their activities. To provide that support, it is essential to determine if the right level of investment is being made. Many professionals now realize that customer relationship management and sales force automation meet only part of what a sales organization needs, from executives and management to the sales operations required to manage the hierarchy of sales and account representatives and their managers. One key activity is sales forecasting; many organizations do not have sufficient visibility and knowledge of the sales pipeline to adjust their focus to reach the best possible outcomes, and today they need not just quarterly data but also monthly and weekly views. In addition, the compensation and incentives that motivate sales leave much room for improvement, needing data to determine not just variable pay but how well sales people and group are reaching the full potential in their quotas and territories. Our 2014 Sales and Marketing research agenda will bring forward research and facts to help Sales make the right investments in these areas and others to focus on efficiency and execution. Those leading sales teams will need to determine whether and where they need to make improvements, which includes creating a better alignment with marketing to generate sales demand using new techniques and to educate prospects to help ease the sales process. This can’t be done without having the right information about products and services that can be used in marketing as well as in commerce, sales and the supply chain; product information management is essential, and we will continue to track and write about it. These areas of focus, along with examining the role of sales analytics, will uncover new potential in what Sales can do to meet its mission.

Engaging customers and providing a great experience is essential for best-in-class organizations, but that requires effective technology in all aspects of customer interaction and service. This is excruciatingly important, as the ability of customers to comment on a customer experience (negative or positive) is instant via social media. Our research agenda for customer applications and technology shines light on a range of helpful tools, from customer engagement applications to the use of analytics and cloud computing in optimizing multichannel contact centers, as well as subscription billing and recurring revenue. Building on a foundation of research on customer service agents in contact centers and other areas of the business, it reveals that much must be done to retrofit the archaic telephone call centers of the past to meet the interaction needs of today and the future. If you have not had a chance to examine the analyst perspectives of Richard Snow, Ventana vice president and research director, I encourage you to do so.

Further, the energy in business analytics continues to increase as organizations begin to see a return on  insights that help them more confidently lead and manage business initiatives. Business analytics is moving beyond business intelligence efforts that are typically managed in IT, and organizations are starting to make big data investments that bring a new generation of tools to analysts and business users, enabling them to utilize more self-sufficient discovery and exploratory methods, including predictive ones. Providing visualization of data will only meet a small set of the business analytics needs of organizations though much of the focus in 2013 was in this area of focus. However, in the shift to empowering businesses with analytics many organizations have gotten caught up in the excitement around the technology without rationalizing the needs and skills of their users; they need to develop a clear set of what we call personas to align the right technology with the right individuals. We also address the issue of most organizations still being challenged by a lack of automation in assembling and integrating data for business analytics, functionality that can save time in realizing the value from analytics. The processing of events for real or right time needs are critical as found in our operational intelligence research that will also assess and rate the vendors in 2014. Also at the beginning of this year will be the release of the most comprehensive rating in our hands on evaluation of mobile BI products in our Value Index that will cover products that operate on smartphones and tablets. A new version of the business intelligence value index will come in 2014 too. New research in location analytics and information optimization (finding value in information through big data) set the foundation for upcoming research in big data analytics that will reveal insights from early adopters and enable others to benefit from their efforts. We have found that there is a skills and process gap in most organizations, and we’ll conduct new research on the next generation of business analytics to help organizations fully utilize analytics and exploit the insights. Tony Cosentino, our vice president and research director, has a robust Business Analytics research agenda for 2014 that will help organizations build a foundation and roadmap.

Not to be overshadowed by the momentum of business analytics, big data is becoming less mysterious for organizations, many of which love the conversation but have not investigated how they can actually step forward to seize innovations in the storage and processing of data. Getting past the market diatribes about the four V’s of big data – variety, velocity, volume and veracity – is critical; we see a new generation of value characteristics described as the four W’s: who, what, so what and now what, which are address the classic when, where, who and why. Our big data and information optimization research agenda for 2014 examines the growing portfolio of big data technologies including databases, in-memory processing, appliances and Hadoop, all of which have distinct characteristics and require different skill levels. As we enter 2014 a new generation of converged technology is unifying these capabilities in appliances that bring hardware and software together, making big data initiatives easier to implement and deploy. Just as organizations continue to deploy new types of big data technologies to gain a competitive edge, we have entered a new age of requirements for big data integration that can help utilize data across the enterprise in an architected manner, which is part of the background for new research in this area. We will also have a new Value Index in data integration for 2014 that will cover the needs across the department, enterpris and big data. Our new research on finding information value from big data will help business and IT set a more balanced focus on big data.

We have now publicly unveiled the research agendas for 2014 to whichValueIndexLogo we provided early access for our clients. We post research agendas publicly to provide depth on the themes and plans for our research in the year including benchmarks and Value Indexes. Unlike us, most IT analyst firms do not publish their annual plans and have dropped the process, ignoring the rigor it takes to ensure an independent level of research is conducted. This is part of the challenge I laid down to the IT analyst industry, in which too many just go along and “wing it with nothing” or refuse to publish with access at no charge. We have a passion for research and a laser focus on the best practices and insights related to the applications and technology that help business and IT be successful. I believe our firm plays a meaningful role in helping organizations improve their use of technology.

For more than a decade Ventana Research has been providing fact-based perspectives, from our analysis and guidance to our best practices and insights. Such perspectives are not available from any IT analyst or consulting firm that is aligned to a particular vendor’s technology and resources. We demonstrated our commitment to public dialogue in two great events held in 2013, our business technology leadership and technology innovation summits. To see what I mean, look at the video replays available online, as well as presentations on business technology leadership and technology innovation. This year also will include summits that will help provide the guidance and insight you need to be successful in utilizing technology effectively across business and IT. Equally exciting was the recognition of recipients of our Technology Leadership and Technology Innovation awards, furthering our commitment to celebrate technology pioneers and leaders in organizations and suppliers. Please follow us on social media at Twitter or LinkedIn to get the latest updates on our events and research.

On behalf of the entire team at Ventana Research, I wish you a prosperous and innovative 2014. We hope you derive full value from technology in 2014, and we look forward to hearing from you through any of our channels, including research, blogs and social media. Taking heed of best practices and benefits realized by others is critical, but aspiring to be ahead of your competition through the best possible business and IT results will require innovative approaches in use of technology. Refer to our research agendas to ensure that you don’t miss the big ideas and practice methods in your efforts, and count on us to help you build further assessments and benchmark comparisons to reach your full potential.

Best Regards,

Mark Smith

CEO & Chief Research Officer

I was recently at Oracle Analyst World which is the vendor’s annual gathering of technology industry analysts. Its executives and others in the products organization deliver the latest news on where the titan is focusing efforts to expand its technology and markets. This year, against the background of the consumer and business markets embracing mobile and cloud computing, Oracle is working to sound like a more friendly supplier that can help remove legacy issues and inefficiencies that plague CIOs and data centers. Oracle also used this forum to attract IT departments to the technology advances it has made across its deep and broad portfolio of products. Oracle has more than 3,900 software products and more than 3,000 software patents that indicate its significant investment in R&D. Now the company is beginning to release improved products more frequently, which most customers now expect from technology vendors.

To analysts Oracle emphasized four enterprise imperatives: big data, cloud computing, mobility and social media. These are among the six technology innovations our firm tracks – Oracle does not prioritize advancements in the other two at the top level, business and social collaboration and business analytics, although it offers products for them and are part of its significantly large product portfolio. There was significant time spent discussing their engineered systems of server, software and storage technology, which are targeted to transform data centers. This is a big-money center of opportunity for Oracle as IT organizations strive to streamline data processing and be more cost-effective in operations. Oracle also is furthering vertical integration of its technologies. Speakers invoked analogies to Steve Jobs and the innovative efforts of Apple, but that is really not a relevant comparison, as the dynamics of consumer markets do not translate to the business aspect of technology, whether it is rented by business units or purchased and installed by IT and are not as easily convinced about vertically integrated technology for business. The two constituents of business and IT and their approach to software continues to evolving differently, as I recently assessed. But even so my analysis of Oracle’s imperatives comes in the context of simplifying IT while pushing innovation.

Let’s look first at big data, a market that continues to grow across the spectrum of technology used to capture, store and access business information. Our benchmark research on the topic finds that the RDBMS has reached a saturation point, being used in 80 percent of organizations, while other technologies have smaller penetration but will grow significantly until the end of 2015: in-memory databases (22%), Hadoop (20%) and data warehouse appliances (19%) all will be deployed in that time. Our research shows that the expanding volume, velocity and variety of data are important across types of big data technology, and Oracle is investing to ensure that IT organizations see it as a viable option for all of them. Oracle is embracing Hadoop broadly, from loading to data services, to ensure it can utilize the HCatalog metadata and Hive-based methods in its business intelligence efforts. The latest Oracle Big Data Appliance, Oracle Exadata and Oracle Exalytics, which include its BI software, are designed to serve organizations that have limited resources and time to fine-tune their configuration. In my analysis Oracle has not been as aggressive as it could be on communicating the value of big data and now in conjunction with its acquisition of Endeca is beginning to focus on what we call information optimization, which ultimately is the value derived from big data, as I have pointed out.

I also think Oracle should look at more tightly coupling big data vr_bigdata_big_data_capabilities_not_availablewith its business intelligence and analytics to help business analysts in using large amounts of data. For example, the largest needs for big data according to our research are what-if analysis and forecasting (44%), predictive analytics (41%) and visualization (37%). Oracle has products for all of these, but they should be part of a more integrated presentation and technology stack for organizations to use them more easily.

In both big data and business analytics overall, where Oracle has a broad portfolio of products, its acquisition of Endeca shows real promise, achieving advances in information discovery, interactivity and visualization as well as self-service access to information. Oracle is working to make its BI products as appealing to the business side as they have been to IT organizations but still needs to make clear the value to analysts, let alone those in managerial or management roles. In this area improvements in the user experience are critical: According to our benchmark research usability is the top priority for organizations evaluating new software.

My colleague Tony Cosentino recently covered Oracle’s latest release of business intelligence. He notes that it shows steps in the right direction but lacks integration or use of Oracle’s latest mobile and collaboration technology. Here the company cannot rely on the perspective of IT, which does not consider these aspects important; our business technology innovation research shows that the lines of business have them as two of the top three priorities. Not much is new in the mobile aspects of Oracle BI, although I pointed out at the beginning of last year that it needed significant improvement and requires more frequent updates.

Oracle also is slow in advancing its analytic applications across ERP, CRM, EPM for finance and industry-specific analytics; users in these areas need to transition from tools and dashboards of charts to applications that help not just measure performance but act on and manage it more effectively. Oracle has decided to concentrate its more advanced analytics and visualization on operating against the Oracle Exalytics appliance. This limited approach could hinder its potential as business analysts are less interested in having an appliance package than in tools and software they can use for business analytics with big data or not.

For cloud computing, Oracle is beginning to see returns on its investments in a range of engineered systems that can operate across private or public clouds in single or multitenant approaches; the approach also encompasses storage through archiving data to its Oracle Virtual Networking. Along with IBM, followed by HP and Dell, Oracle is working to turn its range of software into a competitive advantage and appeal to a growing population in IT that realizes it must emphasize usability of technology to meet the next round of business on a more timely and continuous basis.

In the realm of business applications, Oracle is working to supportSPM_Weighted_Overall them in whatever combinations users want, even in a single organization. It has made its global data centers available for any level of demand on a 24-by-seven basis. With the acquisitions of RightNow and Eloqua it has become relevant in customer services and marketing applications. Oracle’s intention is to supercharge its efforts in the B2C markets and to provide more choices for customers. It has continued development of its Social Relationship Management and utilization of social media but but hasn’t caught up with point providers Attensity, Clarabridge and Kana. I believe Oracle will also need to address multichannel contact centers and the dynamic aspects of customer interactions. Mobile and social channels are driving a new generation of technology that Oracle is not now competitive with. At the analyst gathering I heard almost no references to its efforts in sales force automation and other sales-related tools where Salesforce is sharply focused and Microsoft is rapidly advancing. In our 2012 Value Index on Sales Applications Oracle showed a very competitive offering and earned a tie at the top spot, but it cannot afford to be complacent here. In fact Oracle’s Fusion for CRM in sales has integrated forecasting (65%) and vr_sales_application_prioritiesanalytics (47%) more tightly than Salesforce, addressing the top two priorities of sales organizations found in our Sales on the Cutting Edge research. Oracle is more  effective in its suite of applications for human capital management (HCM), which has fully integrated its purchase of Taleo; it now has a convincing discussion of its cloud services to help HR and all employees be more efficient. Oracle also has progressed with its Fusion Applications; as I pointed out last year Oracle Fusion applications are now available in on-premises, hosted and software as a service (SaaS) methods. I like the innovation in the mobile technology that it is showing in areas like HCM. My largest concern is the continued lack of focus on the Office of Finance; Oracle’s enterprise performance management (EPM) application is still embedded within its middleware approach to BI and those in finance are most interested in business applications for their processes. Oracle’s potential to help Finance is significant but the split of its accounting and finance applications for management and operations remains a barrier that is an organizational challenge for Oracle than the buying audience readiness to advance its application portfolio.

It is positive that Oracle has gone beyond just virtualizing or cloud-enabling its applications into in-memory processing to take advantage of the growing potential of computing and memory capacity. Oracle sees its ability to handle data cache and grid in-memory as a competitive advantage, and its Oracle Database 12c and TimesTen can take advantage of D-RAM and Flash. In-memory capabilities are also important for accelerating the performance of its BI offering, which can now operate in a variety of options with its caching methods. Its acceleration of investment into in-memory and other next-generation applications for business comes just in time, as SAP continues its investment into Hana to power its applications. Oracle at this point seems to have a more comprehensive approach than SAP but will need to get these applications deployed in more organizations and build its customer reference base. Also, faster is not always better, and the usability and interactivity of the applications with the business processes will determine its future success.

For business and social collaboration, the Oracle Social Network is just beginning to roll out as part of its applications, which according vr_bti_br_technology_innovation_prioritiesto our research is how businesses would most prefer to access this type of software. With rollouts coming in HCM and SFA, the next year will critical for Oracle to build a strong reputation in this category; over the last decade it made many attempts to satisfy the business audience, which in the end cares about collaboration as a business technology and not as middleware, which is how Oracle has classified it. While many in the industry including IT analysts have not prioritized collaboration as important, this is more of a result to their focus on the IT organization and not one of the needs of business to collaborate and streamline their business processes and actions that require rapid coordination and dialogue. Oracle is smart to make collaboration part of its business applications first, as this is the most frequently selected deployment method in 43 percent of organizations, but other approaches including integrated with Microsoft Office (40%) and embedded as part of business intelligence (28%) or a stand-alone product (23%) are not far behind; we conclude that many organizations prefer a mixed approach. I like Oracle’s use of activity streams, broadcasting and discussion forums, all of which are part of the new evaluation criteria for social collaboration in business as we see a shift from the outdated approaches of just sharing folders and documents or posting links to files within a portal. Oracle’s offering is well integrated and now with collaboration being the second most important innovation priority in organizations, there is opportunity for Oracle if it can move forward faster with what I believe now is a good business and social collaboration software offering.

As Oracle’s opportunity grows with its range of new applications and tools for big data and business analytics, its challenges lie in marketing and presenting them to the business buyers who are leading a new wave of technology adoption; these people want to be spoken to in the language of business and time to value and will not be patient with technobabble. If Oracle can communicate with them, business buyers will find more than perhaps they expect in the Oracle portfolio of products and its ability to help them work better.

Regards,

Mark Smith

CEO & Chief Research Officer

Mark Smith – Twitter

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