The catalyst to organizational value

1 | P a g e | T h e C a t a l y s t t o O r g a n i z a t i o n a l V a l u e

The Catalyst to Organizational Value

Introduction

As we enter the digital economy, companies will find the business climate to be significantly more volatile than they have in the past, and at the forefront of this volatility is information enabling market participants that is shepherding in a wave of changes at an unprecedented pace. This rate of change translates to the rate in which the viability of information organized in a specific way to meet the needs of the organization losing its adhesion rather quickly. Understanding exactly what information will serve the needs of the organization and how it will be combined to serve both the marketplace and those who wield information in the marketplace despite the highly volatile digital economy is critical for the survival of organizations. This time is different, there are few organizations who have honed their ability to decipher the contribution information makes to their value propositions, but that is exactly what is needed to understand which information investments will yield the greatest organizational benefit.

Figure 1 The Fourth Industrial Revolution, World Economic Forum, InfoSight Partners, 2016

Combine this inability to decipher information’s contribution to the bottom line with the onslaught of data and the amount of noise inherent in the data streams and it will become very apparent that those who are not in a position to proactively manage information as an asset of the organization that serves as a catalyst to achieving value propositions will be at a disadvantage to companies prepared for the digital economy.

There are several levers that companies can use to influence information’s ability to serve as a catalyst to achieving value. These are:

• Devising information based indicators that assure market adhesion to value propositions


• Eradicating resistance to using information in time critical situations • Implementing the framework that orchestrates the valuation of information assets • Ensuring the alignment of information to the processes specifically devised to achieve value

propositions • Incentivizing using information as a critical component of value propositions

This writing will go through some of the major levers and prioritize a roadmap devised to enhance the capabilities of thriving in the digital economy.

How information serves as the catalyst for obtaining value

Value can be made available to an organization in one of four ways:

• It can be captured from someone else who participates in the same marketplace. • It can be extended through cross sell and upsell opportunities.

o Systemic extensions are those which have an opportunity to be permanent (e.g., capturing someone else’s sales because the quality of their product has been lacking).

o Opportunistic extensions are those which are anticipated to be short lived (e.g., capturing someone else’s sales because of shortages in the raw materials marketplace which you can fulfill and others cannot).

• It can be innovated, which is introducing new ways of doing things which changes the market status quo.

o Iterations are innovations that do not introduce a sufficiently different change to alter the status quo. While they are interesting to track, they will not disrupt the core assumptions of value propositions.

o Innovations are business scenarios launched in the marketplace which introduce some exceptions to the practices engrained in the value propositions of the organization, but are not sufficiently far reaching to require retooling value propositions.

o Disruptions are business scenarios launched in the marketplace which introduce significant challenges to the practices and processes utilized to achieve value propositions and require some level of retooling and possibly a reengineering of value propositions. In the disruptive case, existing value propositions are most likely obsolete.

It is important for organizations to understand how to wield information. The industrial tombs are littered with companies which did not take the digitization of the marketplace to heart (e.g., Borders, Kodak, Blockbuster, Retail trade in general, etc.), all of which have had companies disrupt their core value propositions by offering digital products which disrupted their offerings of products and services out of existance.


Content is king in the digital economy

The digital economy is different. The communications network allows information to flow freely and is always available, through internet connected and mobile devices. Content is the lifeblood of the digital economy, it is how information is delivered to consumers. It can be product descriptions, reviews, feature comparisons and a host of content pushed to and pulled by the consumer. The consumer has access to almost a limitless amount of content, and directing the right content to the consumer at the appropriate time is commonly what is required to achieve a value proposition in the digital economy. No wonder that the fastest growing component of advertising is the publication of digital content.

According to Advertising Age (2016 Marketing Fact Pack, Advertising Age, December, 2016), over 1 trillion dollars will be spent on delivering the right content to buyers at the right time as the means to capture, create, extend or protect revenue. The fastest growing component of this advertising investment is being expended to participate in the digital economy.

This investment in content is being made into a component of the marketplace that is growing significantly faster than the other market channels. While the latest statistics for the size of the digital economy are only available for 2014, the signs are clear that the accelerating digital channels of the economy are growing the fastest. They are the segments of the economy that are most subject to disruptions, a business climate that is anticipated to outstrip the growth rate of the other market segments for the foreseeable future.

Figure 2 Measuring the Electronic Economy, US Census, June, 2016

To thrive in the digital economy, digital information must be combined in ways that derive commerce. This can be as an intermediary to delivering content, as a publisher for content to be used by others or


by using content as a vehicle to deliver goods and services directly to B:B (business to business), B:C (business to consumer) and B:B:C (business to business to consumer) market channels.

The chart above (figure 2), which represents the US Census survey results for the changes in the size of the digital economy from 2013 to 2014, shows growth in the digital economy across industry sectors, with especially high growth in the retail and services market sectors. The casting of numbers for 2015 and 2016 will show an acceleration in the growth rates of these sectors, with an especially high growth rate for services and retail market segments.

The chart below (figure 3), represents the dollars spent to deliver content ($1.1T dollars estimated for 2017), and shows digital delivery of content behind direct marketing efforts ($182.4M vs $331.5M) but growing 7x faster.

• Digital content can be delivered either through internet and mobile pages or through specific applications devised to access content (apps). It is either pushed through exchanges (targeted advertising on web pages), pushed through specific pages (personalized information) or pulled from a browser, app or search session.

• Television (including all forms of advertising delivered to televisions, cable and broadcast) advertising totals $223.9 but is growing much more slowly than digitally delivered content. It is important to note that this television number includes infomercials, which is a growing method of delivering content.

• Direct advertising includes content delivered to the consumer directly. It can be delivered in a variety of means, including a sales force delivering content to prospective and existing consumers.

• It is important to note that direct, digital and television advertising represent 74% of the advertising spend, or $738 Billion.

Figure 3 2017 Worldwide Advertising Spend ($1T), 2016 Advertising Week Marketing Fact Pack, December, 2016


There are some key differences in the digital economy which are by their own merit disruptive to the marketplace that your organization participates in. The barriers of entry in the digital economy are greatly lessened because the ability to launch a digital product can be launched from anywhere in the globe with minimal global logistics barriers.

The size of an organization has little bearing to the ability of communicating with the customers, suppliers and financiers of the digital marketplace. The message, both good and bad, has the potential of reaching a global instantaneous presence by spreading virally at all times.

It is information that enables the communication with the marketplace and delivery of digital products with a global footprint and at an unprecedented speed. The ability to wield information is a, if not the key determinant of success in the digital economy.

Legacy Products / Economy Digital Products / Economy Organizational size Economies of scale favor larger

organizations Any size business with a solid digital strategy can compete

Market Presence Cost of communicating to the market is expensive

Cost of communicating to the market is inexpensive

Information Lag Significant Non-Existent Logistics High cost of physical delivery

mechanisms Low cost of digital delivery mechanisms

Logistics issues Coverage, delivery effort Personal Identity Information protection

Inventory Costs High Low Viral Capabilities Limited Unlimited Reach Limited to physical footprint Global Security Physical Information

Figure 4 2017 10 benefits of digital marketing vs traditional marketing, Business Zone, 2013

Why worry about the alignment now?

We have not completed our journey through the fourth industrial revolution, nor is it expected for the pace at which the volume of data (and information) and the sheer volume of noise available in the streams of raw data to become more manageable than they are today without a change in the approach used to manage this onslaught. If we take clues at what is happening with virtual assistants (Amazon Alexa, Apple Siri, Google Assistant, Microsoft Cortana, etc.), it is easy to foresee a virtual assistant layer that serves as the window to information made available for analysis and automated intelligent processes. This window will use an aggregation layer which uses the map of information expected for business processes (the Chief Data Officer (CDO) map) as input. If the map is not completed, then the automated aggregation for processes completed directly by business stakeholders and automated processes which use intelligence provided by business stakeholders will not be possible nor viable.


Those who delay starting the journey will continue to be victims to the disruptions launched in the marketplace because of their inability to manage the deluge of data and the time it takes for their data scientists to wade through the data, select what is viable for a particular problem, reorganize it to fit the problem at hand and verify the validity of their results (which is the process employed today, which consumes approximately 80% of the time available to data scientists).

Google (Google Assistant), Microsoft (Cortana), Apple (Siri) and Amazon (Alexa) have been investing in the artificial intelligence required to provide a virtual assistant capable of serving in this information search aggregation role through a virtual information assistant. Today these are home appliances (Echo, Home, etc.), but their roles will increase in complexity and their positioning will be more central into daily informational needs, but only if the information required is accessible in a way that can be defined with the problem at hand serving as the framing for information access.

Figure 5 Future State Data Management Framework, InfoSight Partners, 2016

Devising Information Based indicators to assure market adhesion to value propositions

Metrics and algorithms devised to alert that one or more of the assumptions imbedded in value propositions have changed is at the bedrock of using information early. These metrics and algorithms do not solve problems but rather alert the process owners of impacted value propositions that the market conditions are no longer business as usual and some course correction is warranted.

Most companies count on business stakeholders to find the conditions in the warehouse, which is by its nature published after such an alert could be useful. The clues that market conditions warrant review


will not come from internal systems but will rather come from social media, industry sources and their normal impact on the myriad of information available about the activities customers and prospective customers take up to and including the execution of a transaction resulting in organizational value.

Much of this information will arrive from log centric information, some of which is integrated today. Log centric information can come from web logs, mobile session logs, RFID tag logs, Proximity sensor logs, security appliance logs and a host of other logs which together will give an appropriate view. It is true that these logs are published daily after processed and enriched in most organizations, but this daily feed may not be sufficient if there is truly a market disruption under foot.

Information indicators will fit into one of five buckets:

• Reports and canned analytics are assemblies of information that at best once aligned to the processes that will require information. These reports and canned analytics are assumed to not align to the informational needs of processes aligned to value propositions. Many of the reports made available will be derived from internal systems, and will be useful in following trajectories anticipated in business as usual scenarios, but will have challenges in NBAU and disruptive business scenarios.

• Unaligned information, which is information that is available but needs reorganization and other activities to align it to the informational needs of processes aligned to value propositions. Unaligned information has baked into it a delay factor because it has to be aligned to business processes before it can be useful.

• Aligned information that is consumed in a business as usual business scenario. In a business-as- usual scenario, the assumptions and mechanisms used to align information to the processes aligned to value propositions fit as expected and the trajectories mapped in value propositions fit as expected.

• Aligned information that is consumed in a non-business as usual scenario. In a non-business-as- usual (NBAU) scenario, one or more of the assumptions or trajectories mapped in value propositions do not fit as expected, but the non-alignment can be fit without recasting the business process. In many cases, this is caused by an innovation that disrupted the marketplace but was not sufficiently disruptive to render the underlying assumptions in the business model obsolete.

• Aligned information that is consumed in a disruptive scenario. In a disruptive scenario, the assumptions and fit of the business model is obsolete. They can be made obsolete by a new process that impacts the overall cost assumptions to deliver goods and services or a new product that obsolesces the goods and services delivered to achieve a value proposition. In these disruptive scenarios, the innovation that disrupted the marketplace was sufficiently disruptive to render the underlying assumptions used in the business model obsolete and will require one or more components of the business model to be recast, the information required for consumption by the value propositions altered and the processes executed to achieve a value proposition altered.


In many cases and heavily dependent on the industry, there is a time crunch to deliver action against a business scenario. Generally, however, the time criticality of actions in response to NBAU and disruptive scenarios in the digital marketplace is heightened.

One of the benefits to the organization is the ability to identify, orchestrate and dispense potential disruptions using an orderly process. This process is critical to the formation of an ability to dispense with time sensitive disruptions in a way that the outcome is beneficial to the organization. While it can percolate BAU and NBAU business scenarios, the real interest in publishing alerts is to percolate disruptive business scenarios so they can be reacted to in the time made available by the marketplace.

Such a system, illustrated in concept in figure 6, shows a process which consumes data (heard inferences, learned inferences, innovations and knowledge) into a process that filters out noise and using a series of stored algorithms identifies potentially disruptive business scenarios that need further review. It is strongly recommended that these scenarios are orchestrated through workflow and the dispensation of these scenarios saved for tuning of the overall process.

Figure 6 2017 Disruption Discovery Engine conceptual overview, InfoSight Partners, 2016

Eradicating resistance to using information, particularly in Non-BAU and disruptive business scenarios

Resistance is the collection of reasons that information was not used in some process aligned to a value proposition. Mathematically, it is the difference between potential value achieved from information and that actual value achieved from information, but there is much more that needs to be extracted before any meaningful action to eradicating resistance can be taken.

Resistance is categorized into several major groups:


• Trustworthiness is the collection of reasons given for having to ensure the validity and accuracy of information prior to using it for anything important. It could be data quality concerns, the ability to uniquely identify the desired version of information, questions about the scope and breadth and proper applicability of the information, a lack of insight into the derivation of information or a host of other reasons that information made available to processes is not deemed de-facto accurate and valid without first verification. This verification takes time and, aside from inaccurate information leading to improper conclusions, the time it takes to verify the validity of information could be sufficient to eradicate thwarting a time sensitive disruption in the marketplace.

• Clutter is a resistance category and has grown in importance with the advent of big data. Big Data has reduced the cost of storing information, which has resulted in the ability for organizations to extend their inclination to be data hoarders (remember, there is a difference between data and information, data is source aligned and information is consumption aligned). There is an unwillingness to part with information because it may come back into vogue at some time, which makes finding the right information and combining it with other information a greater and greater challenge in most organizations. It is important for you to ask that if you only restate financial hierarchies going back three years, why do you have twenty years of financial transactions available for analysis knowing full well that reorganizations have rendered some component of the information made available for analysis inaccurate because of hierarchy misalignment.

• Context is the metadata, reference data, master data and enrichment data that provides context to consumable information. It is especially important when dealing with log centric information, which is a major source of information that will serve in percolating early warnings of market disruptions.

• Expired data is information that has either no or little value (e.g., security asset prices after the information has been published in numerous sources and made available at no cost, in the case of security asset prices, that is typically 15 minutes. Unless you are in the business of aligning security orders to the security prices during the day and that information could impact transaction pricing, there is little value to holding this information several times particularly if you cannot accurately timestamp it. Making expired data available for consumption will provide sound bites about the lack of trustworthiness in data, plus it is clutter and has no value.

• Alignment of information with business processes so that it can be consumed without spending inordinate amounts of effort reorganizing it is a key source of organizational abilities to wield information in time to make a difference, if ever.

Incentivizing using information as a critical catalyst for the successful execution of value propositions

The shift of managing information in a way aligned to its consumption as opposed to the more common practice of managing information in a way aligned to its sources is a change and will require a level of


incentive to get people in the organization used to this shift. There are a couple of ways to do this, all of which require metering the use of information. These methods include benchmarking the employed information management methods, devising incentives to declutter information stores, and developing management metrics to reduce the time required to use information from the time it is needed (not requested). There will be temporary short lived needs for information and more permanent requests, it will be an eye opener to measure how many informational needs are satisfied with local desktop capabilities as opposed to data stores devised to meet the needs of business. These are largely due to a misalignment between process needs and information organization.

To incentivize using information, a series of metrics to measure the increased usage of information in scenarios where it makes a difference is required. The measures should measure information use and categorize it by scenario type, namely:

• Track the information made available, ensuring that a blind eye is not being set to information not internally sourced.

• Track the percentage of data sourced from streaming sources, logs and social media, which will give insight into time sensitive disruptions.

• Track the percentage of information consumed through algorithms, particularly those that are triggered without human intervention.

• Track the newly aligned information, representing the vibrancy of the map of information alignment to process

• Track the information not aligned, signaling the pool of generated information is potentially cluttered.

• Track the reasons for resistance and the percentage of lost opportunities due to resistance to using information.


Figure 7| Information Consumption Matrix, InfoSight Partners, 2016

The roadmap devised to enhance the chances of thriving in the digital economy

The following roadmap represents a series of starting points required to move the organization to a trajectory devised to thrive in the digital economy. These are:

1. The ability to ensure that information made available is secure and that personal information entrusted to the organization as a consequence of doing business is highly protected and immune from intrusion is highly important. If content is king and your organization cannot protect the identity and activity of those accessing content placed to incentivize commerce, then the content will not achieve the access desired. Greater importance and expenditures should be anticipated to ensure the protection of content and the identity of those interacting with content. Content is that which B:B, B:C and B:B:C consumers, suppliers, partners and financiers access and those internal to your organization who consume content as part of executing processes aligned to value propositions.

2. Organize to manage information as a non-depleting but expiring asset of the organization as opposed to the most common way of managing information practiced today. The matrix of information consumption assumes an organization in place to manage information as an organizational asset, meaning that the proper roles are in place. These roles are accountable for managing information as a consumable asset.


Figure 8| The roles accountable for managing information assets, InfoSight Partners, 2016

3. Provide the team responsible for managing information assets with a framework that houses the mappings of information, processes and the actors who consume the information at the appropriate times. The framework must house information about data sourced, the machinery used to transform data (organized by source) to information (organized by consumption), the identification of potentially consumable information (the Information process map) and the information which was consumed by processes by business scenario type (not mapped, BAU, non-BAU, disruptive).


Figure 9| The contents of the information consumption repository, InfoSight Partners, 2016

4. Ensure the availability of an orchestration layer, which is utilized to record information available to business processes and record the use of information, which is then aggregated to record information value. This orchestration layer must be repeatable and capable of withstanding the scrutiny of an audit.

5. Map business models and understand which business model components of business models are planned to be disruptive to the marketplace, which are reactive to remain relevant to the marketplace and which are components of the business model but neither reactive nor disruptive. Map critical information flows which are critical to the success of the business model, these are the information flows that will most participate in the value propositions of the business model.

Figure 10| Sample Business Model Canvas, Strategym, InfoSight Partners, 2016

6. Develop processes to capture business model and strategic intent changes that will trigger changes to the information – process map. Some of these facilities are depictions of business models (e.g., the business model canvas, Strategym), Potential Market Disruptions (e.g., visioning of market disruptions, InfoSight Partners), the value proposition vision (Vision Storytelling Canvas, InfoSight Partners and an understanding of the collaboration points for business processes (design thinking and collaboration canvas, InfoSight Partners).


Figure 11| Sample Vision Storytelling Canvas, InfoSight Partners, 2016

7. Devise metrics to manage the transformation from a source aligned information management organization to a consumption aligned information management organization and communicate the metrics which includes the potentially consumed, consumed and resistance measurements on a regular basis (see figure 7).

There are three tools that should be implemented to steer the course to enabling using information as the catalyst to organizational value. These tools are the checklist to measure adherence to the roadmap (see figure 12), the data used to compute metrics used to manage the journey (see figure 7) and regularly scheduled benchmarks to determine both business stakeholder sentiment on the journey and continued rigor applied to the overall journey.

Some key metrics used to measure adherence to the roadmap are:

• An intrusion protection index, which measures the readiness to protect the information customers, partners, suppliers and financiers provide.

• An organization alignment index, which measures the fit of the information leadership roles compared to the optimal roles devised to manage information as an organizational asset.

• Information consumption alignment index, which measures the alignment of information to its consumption as opposed to its source.

• IPA map index, which is a measure of the % of organizational information used in business processes appearing in the information – process- actor map.

• Information clutter index, which represents the percentage of information clutter.


Figure 12| Roadmap checklist to enable the use of information as the catalyst for obtaining value, InfoSight Partners, 2016

About the Author Mark Albala is the President of InfoSight Partners, LLC, a business consultancy which provides financial and technology advisory services devised to facilitate focus into the value of information assets. InfoSight Partners is led by Mark Albala, who has served in technology and thought leadership roles and serves as an advisor to analyst organizations. Mark can be reached at [email protected].