This is [ big data ]. (More serious answer after).
What does Big Data mean?
(1) The current use of the term big data took off because it was used to refer to new technologies like Hadoop and MapReduce
(2) Most definitions refer to the data characteristics outlined by analyst Doug Laney in 2001: the 3Vs: extremes of volume, velocity, or variety (other Vs sometimes evoked include Validity or Veracity for data quality, and the importance of business Value). Wikipedia’s definition of big data is along these lines.
(3) Others prefer emphasizing the difficulties of manipulating the data in different phases such as Sense, Collect, Store, and Analyze.
(4) Finally, for many business people, “Big data” is now becoming a generic term for “analytics”, except it’s done by “data scientists” rather than “business analysts”. Business people appear to be more comfortable with the term “big data” than some of its predecessors (DSS or Decision Support Solutions, anyone?), its use is rising in popularity very quickly, and folks like McKinsey and the Harvard Business Review have used it to describe pretty much any business opportunity related to data.
South Africa is fighting a fierce battle against HIV and tuberculosis. Policymakers, health care professionals, and donors aim to win with large doses of education, testing, and treatment, all supported by SAP Business One software.
Nombulelo Cebu, volunteer with the Desmond Tutu HIV Foundation (Photo: private)
The Republic of South Africa is an amazing country from spectacular wonders of nature and exotic wildlife, to hip cities and diverse cultures. But the country is also estimated to have more people infected with HIV/AIDS than any other country in the world, and the fourth largest rate of tuberculosis worldwide. In a country where approximately 25% of the population is unemployed, and lives on less than US $1.25 a day, there’s no doubt the health care situation requires heroes. One group that’s stepped up to help is the Desmond Tutu HIV Foundation (DTHF).
Working toward an AIDS-free South Africa
Supported by Archbishop Desmond Tutu since its founding in 2004, DTHF originated in the HIV Research Unit at New Somerset Hospital in Cape Town. The Unit was one of the first public clinics to offer anti-retroviral therapy (ART) to people living with HIV. According to DTHF Deputy Director, Linda-Gail Bekker, its work has only become more important over the years. “We have a vision of an AIDS-free South Africa. Our research, treatment, and prevention efforts to reduce the effects of this pandemic on South Africans have grown 90% over the past four years,” she says.
In addition to clinical trials, DTHF provides free education, testing, and treatment for HIV and TB to hundreds if not thousands of individuals every year from at least four locations in the Cape Town area. Two mobile units also travel to outlying townships and rural areas. DTHF counselor Flora Thobela, knows first-hand the tremendous difference that timely information and treatment can make. Diagnosed with HIV 20 years ago when she was pregnant, Thobela participated in a clinical trial with the encouragement of DTHF. Today she’s living with AIDS and working as a counselor for the foundation. She says patient response to DTHF has been tremendously positive. People value the medical attention, but having someone who cares is just as important for many.
“As an HIV patient, you have to fight to be heard, and the Tutu Foundation helps give people a voice,” Thobela says. “When you are given an HIV positive diagnosis there’s fear of the unknown. But if a person that lives with HIV tells the person how it feels, what it means, things become easier.”
As DTHF has grown with numerous new projects and leaders who are often away, so have expensive regulatory audits and administrative costs. To better manage operations, including compliance with stringent governance requirements, DTHF turned to SAP Business One for a new grant and financial management system that was developed by SAP partner Bluekey Software Solutions.
Financial transparency helps simplify a complex organization
There aren’t many software packages able to deal with non-government organization requirements, explains Jill Thorne, DTHF General Manager. “SAP Business One is a centralized, credible, robust financial system that increases our ability to receive grants and extend social benefit. It keeps the engine running regardless of where management is around the world.”
Thorne expects SAP Business One to substantially reduce audit costs even as DTHF grows. The system has already reduced transaction processing times by 30%, giving project leaders the ability to authorize and approve projects from anywhere on their mobile devices. Creditor summary reports have significantly improved creditor management, while multi-currency reports automatically calculate exchange rate risks, something DTHF couldn’t do before. Thorne estimates savings of over U.S.$45,000 a year with the new software that allows DTHF to do full cost recovery faster.
What’s more, full transparency allows physicians to understand exactly how much budget they have and what they can spend. “Each clinical trial has its own designated budget that can’t be shared with other trials. Before this, people were so afraid of going over budget that they often wouldn’t spend money at all. Now they can make informed spending decisions easily, freeing up more time for patient care,” Thorne reports.
Anyone using SAP Business One has easy, real-time access to the information they need, also saving time and money. “With a few clicks of a button, they can see where the procurement process might be held up. They don’t need to phone lots of people to find out what’s going on,” explains Thorne.
Getting the right information and treatment at the right time helps save lives
Efficient fund management, grant control, and financial transparency are crucial to secure future funding as well. Bekker points out, “When donor organizations are able to see that their grants are being put to good use and can be tracked and proven, the probability of repeat funding is dramatically increased.”
Bekker believes SAP Business One has made a huge difference in helping DTHF spend more time on the clinical trials, treatment, and prevention efforts the country desperately requires. “People are dying so there’s no time to waste. This system frees up everyone’s time to focus more on what we’re actually about—to end HIV, to end tuberculosis—and make it a better world for the people in South Africa.”
Is the single window part of your global trade vision in 2013? I hope your answer is, “Yes—the transition to the single window is on my ‘trends to watch list,’ as are export reform, electronic communication with customs and other government agencies (OGA), and the introduction of new Korean free-trade agreements.”
Customs and OGA’s certify electronic filing interfaces and certified software providers must keep the interfaces up to date. This cycle of certification and re-certification is an ongoing exercise to keep up with the modernization of customs and their systems.
In this post, I’ll review the complexities giving rise to the need to incorporate single window into our global trade strategy. Let’s look at some of the drivers from an export then import perspective.
Why We Need Single Window: The Complexities of Export Control
As an example, there are two separate export control lists containing products, technology, and materials that are maintained by separate agencies in the U.S.:
Commerce Control List maintained by the Department of Commerce Bureau of Industry and Security, which covers products that have civilian applications but can be transformed to weapons—most prevalent in the chemical, pharmaceuticals, Industrial Machinery and Components IM&C, and consumer products
United States Munitions List maintained by the Department of State, which consists of military and weapons products that are subject to International Trade and Arms Regulations (ITAR)—critical to the aerospace, defense, and high-tech industries
To further complicate things, in the U.S., export licenses are issued by three different groups (the Departments of State, Commerce, and Treasury), and the requirements are based on two different sets of regulations administered by two different departments: Export Administration Regulations (EAR) and ITAR.
Modernization of the global supply chain means investment in systems and technology. The National Export Initiative in the U. S. calls for the consolidation of the current export controls and Harmonized System HS codes. The interfaces for customs, as well as other government agencies, are being unified into one, single window for export, OGA requirements, and import.
Who is driving the adoption of the single window? Organizations worldwide (including Latin America and Mexico), such as:
United Nations Economic Commission for Europe
Centre for Trade Facilitation and Electronic Business
World Customs Organization
Association of South East Asian Nations
United States Automated Commercial Environment
Other global trade trends to watch include product classification. New classification schemes are including export regulations directly into the number schema. The idea is to build as much intelligence in the new schema to cover all global trade, customs, and other government agency requirements.
Why We Need Single Window: The Complexities of Imports
Importing is a very precise process that requires an accurate product classification to avoid customs delays and ensure the correct application of duty rates. The filing of imports requires multiple steps and special procedures depending on the product and its originating country. To speed up the process, pre-entry documents are filed before the actual import entry.
Filing the actual import entry includes:
Customs valuation of tariff rates
Entry process selection
Import reconciliation in cases where actual quantities or tariffs weren’t exact
Further complicating the import process is the variety of ways you can pay for duties. Products can be imported:
Directly into free circulation (entered for consumption)
Into a bonded warehouse where duties are only paid when the product’s pulled from the warehouse
Into a bonded warehouse with duties already paid
Into special manufacturing processes where duties are deferred or recalculated
Via the transit procedure, as in Europe, where tariff duties are suspended until the goods reach the final destination
There’s a lot of work involved for the customer in importing products. Traditionally, this function was outsourced to import brokers who handled everything. However, the larger importers are finding that with automation, they can do the work themselves, thereby:
Reducing costly brokerage fees
Giving the importer more control over the flow of goods
Providing more flexibility as tariffs change or new programs, such as free trade agreements, come on line
The value proposition for import is targeted to the high-volume importers, and the process itself is one of the most crucial and difficult bottlenecks of the supply chain. It’s the mechanism for providing other government agencies, such as the Food and Drug Administration (FDA), with required regulatory information prior to the goods entering into the U.S. It’s also a major security concern.
Recently the Importer Security Filing regulation was enacted. Known as ISF or 10+2, the regulation requires the declaration of goods in containers 24 hours prior to container loading—adding more requirements to importers who use vessel containers (bulk items such as grain or liquids are exempt). ISF requires ten data elements from the importer plus two from the carrier, hence the term 10+2.
The Single Window Solution
All the critical and complex aspects of the import process are driving the single window or Automated Commercial Environment (ACE) in the U.S. The idea is to simplify importing and provide one system and interface to file all documents. Ideally, companies will select a solution that connects to the government systems and connects Customs (CBP), the trade community, and participating government agencies by providing a single, centralized, online access point for communications of all required information.
The single window’s expanding, and companies should begin planning now by becoming familiar with all their requirements and by watching the market for solution providers that can get them there fast.
Single window isn’t just a government mandate— it’s a solution that increases user productivity through simplification and automation. Rather than resisting this innovation, companies should embrace the single window and jump out in front of their competition.
How’s your company planning for the single window?
CEOs and CFOs seek IT/other investment proposals that yield a good Return on Investment (ROI). These executives also favor projects that support, promote and implement their business vision for growth.
The growth and profit objectives are obviously not mutually exclusive. The executives would want both. The question is- Would (or should) the executives still consider IT projects which are not attractive or even anemic from ROI standpoint?
Typical project scenarios with modest ROIs
The following project situations may result in modest ROIs:
“Strategic” projects that help build “bridge” to the future. Such projects are not always aimed at realizing quick returns, but have a different purpose- to accelerate achieving the business goals
“Foundational Projects” that prepare the company for implementing IT/Business solution in future. A typical example is project to upgrade technology infrastructure– which is often cost intensive and hard to translate to tangible benefits. However, a strong technology infrastructure can set the foundation for the company to implement business critical and profitable projects in future. Another example of a foundational project in the context of SAP Programs is implementing a “Center of Excellence”
Projects with considerable “value-added” or “soft” benefits, and relatively small quantifiable benefits typically have lower ROIs. For example, if one of the major benefits by implementing an IT Project is improved customer satisfaction, it can reasonably be assumed that this should enhance customer goodwill and hence result in revenue benefits. But the link between customer satisfaction and increased revenue is tenuous and hard to justify at times. It is even harder to calculate this benefit with some accuracy. So while such benefits are typically documented in business cases and in the discussion on “value proposition”, it does not feature in the ROI calculations.
What is a “modest” Return on Investment?
Let us first define what a modest return on investment is? For doing this I am using “Internal Rate of Return (IRR)”- one of the better scientific measures that also factors in time value of money concept.
The internal rate of return on an investment or project is the discount rate at which the net present value of costs (negative cash flows) of the investment equals the net present value of the benefits (positive cash flows) of the investment.
IRR calculations are commonly used to evaluate the desirability of investments or projects. The higher a project’s IRR, the more desirable it is to undertake the project. Assuming all projects require the same amount of up-front investment, the project with the highest IRR would be considered the best and undertaken first.
Typically, the IRR of a project (or investment proposal) is compared with those of other projects, as well as with the “cost of capital” of alternative investment.
Whether an IRR is modest or weak, is a matter of judgment. However, I am using a simplified way to get my point across:
Modest IRR- Any project with relatively low IRR compared to those of alternative investment proposals
Weak IRR- Any project with IRR marginally higher than the cost of capital
Negative IRR- Any project with Net Present Value of cost-stream exceeding that of benefit-stream. Such a project is usually “undesirable”.
So, how would a smart executive evaluate these scenarios? Insist on reviewing the full picture…
The executives are faced with alternative investment proposals, and have choices to make. While IRR/ROI numbers are important measures, they must be used with caution. The project scenarios mentioned above if evaluated on a standalone basis, the IRR/ ROI would not be attractive.
The executives therefore should insist on reviewing the full picture covering business case, benefits realization and ROI model. It is therefore necessary for consultants/ managers preparing the ROI model and business case to use the following key guidelines:
Build a comprehensive business case- identifying and evaluating the overall “value” instead of using just ROI/ IRR- these are after all just numbers- and only one part of a bigger picture.
Focus on benefit realization – Make sure that the business case provides details of how the benefits will be realized and can be optimized- both for hard and soft/ value-added benefits
Create a comprehensive ROI model- including not just the standalone projects, but other related/impacted projects as well. This exercise will avoid any “skewed” numbers generated by standalone projects such as “foundational” or “strategic”.
Please feel free to share your perspective on this topic, by responding on SCN.
I am a Sr. Principal with the Value Engineering Group in SAP America. Prior to SAP, I worked at a large consulting firm as a Partner and management consultant. You may contact me directly by email (email@example.com) or Twitter @aniljoshisap.
This post originally appeared on SCN Services and was republished with permission.
What are the market researchers and analysts predicting for the future of IT? Are their forecasts mere fads or will they have genuine consequences? We take a look.
It’s the same in economics, fashion, and of course, IT: As the end of the year approaches, experts share their forecasts for the future. Some trends later turn out to be media hype, but which ones? We asked the analysts for their opinions.
1. Cloud computing – is the sky really the limit?
The mother of all forecasts, Gartner 2012 Hype Cycle for Emerging Technologies, names cloud computing as one of the big developments. Cloud will have a major impact on the IT world over the next five years. However, Andreas Zilch, member of the management board of Experton Group, believes that cloud computing is currently undergoing a difficult period. The technology needs to make the leap from media hype to maturity, he says. Nevertheless, Zilch also believes this trend will have a lasting influence.
And some effects can already be seen, says Mario Zillmann, senior consultant at Lünendonk. “Cloud computing is a topic that practically all IT providers are driving,” he says. Zillmann adds that it is no longer a trend, but already forms the basis for specific business models.
Peter Lempp, COO of Capgemini Germany, likewise believes that the cloud has shifted from theory to practice, especially the private cloud. Lempp is realistic about the opportunities and limitations of cloud computing. He says, “Cloud services are particularly suited to making changes fast and selectively. However, they don’t necessarily replace integrated IT landscapes. The challenge remains not to create new data silos.”
Rüdiger Spies expects that cloud computing will mean quite a lot of work for CIOs next year. Spies, who is independent vice president for enterprise applications at IDC, explains: “Cloud computing, notably the use of public cloud components, remains a combination of organizational, legal, and technological tasks.” Decision makers need to get the mix right.
2. Mobile IT and “bring your own device” (BYOD)
Carolina Milanesi, research vice president at Gartner, claims, “Employees are determining what the provider market and the company IT environment look like today.” What Milanesi means is: An increasing number of people also use their private handhelds at work. In view of this, many analysts now refer to BYOD almost automatically when the subject of mobile IT is raised.
And mobile IT won’t be easy, thinks Lempp. “Above all, the future is mobile, even if companies are still struggling with extensive hardware procurement and a BYOD approach,” he says. He sees consumer IT as the pioneer. It will “advance relentlessly into the business world,” says Lempp. Spies notes how big the BYOD lobby is. All major providers are investing in their marketing activities. “It’s a hot topic for employees – and IT needs to solve its part of the issue,” Spies says.
But what about security?
Current trends mean that the topic of security is becoming ever more complex and, as a result, also more critical, according to Zilch. BYOD and cloud, too, will amplify this development in the coming year, Lempp stresses. Apparently, Spies can already hear the CIOs sighing when he says that security “tends to be unpopular, but is inevitably necessary.”
That’s why some industry watchers with a macabre sense of humor speak of “bring your own danger” or “bring your own disaster.”
3. Big Data, business intelligence (BI), and analytics
Peter Lempp is the COO of Capgemini Germany (Photo: private)
“BI remains high up on the agenda,” says Spies. In this area, Lempp concentrates on master data management and data quality management. “Those are topics that we categorize under the term business information management,” Lempp explains. “IT decision makers will continue to focus on the systematic approach of the application life cycle in IT as well as – and especially – on aligning business and IT.”
Zillmann explains that this topic is “highly relevant,” both strategically – in other words, regarding the benefits of the data for company development – and technologically (data retention, merging, and analysis). Here’s an example: Automotive companies can already incorporate consumer wishes expressed on the Internet into vehicle development and integrate them into the development process. Or product varieties with different features can be developed for certain target groups. Zillmann concludes, “With Big Data and analytics, the winners will be all types of IT companies – including management consultancies – who address the issues of business alignment and new business models and lines.”
However, this optimism is marred by reservations – because the search for the purpose and benefits of the masses of structured, semistructured, and unstructured data requires trained employees – which takes Zillmann straight to the next trend for 2013: shortage of talent. “There aren’t enough employees who can filter out meaningful findings from a mass of diverse data,” he says. Zilch is therefore also more reserved with his forecast: As far as Big Data and analytics are concerned, he merely speaks of a “potentially” high business benefit.
On the topic of Big Data, Zilch stresses the social analytics aspect. Above all, collaboration software will revolutionize the path to the social enterprise, both in the business-to-business and the business-to-consumer sector.
4. Outsourcing – companies must look further afield
As Zilch observes, the lack of talent is discussed frequently – and still underestimated. At least in the medium term, he sees in-house training and qualification as a solution, particularly if internal IT organizations widen their horizons and gain more technical expertise. Outsourcing can only be a stop-gap measure.
But many decision makers will resort to outsourcing in 2013 – at least that’s what Zillmann expects. He gives the example of SAP consulting and rollout for midsize and internationally oriented companies. Here, he observes, many companies’ IT departments come up against their limits. There is a growing need for external support.
Furthermore, Zillmann continues, German enterprises seriously require support in setting up organizational structures within the framework of international expansion. “Production locations, sales structures, or administration units (HR, finance) need to be created and hooked up with the other locations and with headquarters,” he explains. “That’s currently a very big issue and leads to many projects for IT service providers.”
Before the theory can be put into practice, however, Zilch believes a number of obstacles must be overcome. He calls for IT decision makers to at last pursue their own sourcing strategies actively and not to simply react. He says, “Nearshore and offshore concepts must also be actively integrated.” But he is not optimistic: He notes that this issue is still dominated by “too much fear and reluctance.”
5. In-memory computing
Frank Mang, head of SAP business at Accenture, DACH Region (Photo: private)
Frank Mang observes the discussion coolly. As the head of SAP business at Accenture in Germany, Austria, and Switzerland, he has seen many trends come and go. Mang concentrates on one topic and postulates for the coming year: “Companies who are not yet looking into in-memory computing should start doing so in 2013 at the latest.”
Mang has no time for IT decision makers who complain about constantly increasing data volumes – especially about the growing amount of unstructured data. “The value of data also increases exponentially, provided that you extract information and knowledge from it,” he says. In-memory technology replaces conventional data storage, which – being row-based and organized in silos – relies on structured data. In-memory therefore acts as a enabler for cloud computing, big data analytics, and mobile applications.
Mang sees the “actual revolution” in the real-time connection of transactions and business intelligence. “The tremendous performance and the new way in which data is organized make it possible for analytics to be applied directly to the operational data,” he explains.
Mang is convinced in-memory computing will have a significant impact. “Every single business process will be reexamined,” he believes. Because, even after 20 years of business process optimization, processes are ultimately based on the separation of transaction data and inventory data, which is only brought together after a time delay. “If this separation disappears, the first step will mean the end of many workarounds and interim steps that add no value and only exist due to technical impossibilities,” Mang explains. “Business process reengineering will blossom once more.”
But regardless of where trend analysts and futurologists see developments, Lempp sums it all up: “Things are still exciting in the IT world, in spite of and not least because of the continuous flow of new trends.” And all CIOs will be glad to hear one piece of news: According to the Gartner analysts, budgets will be up slightly in 2013. For the EMEA region (Europe, Middle East, and Africa), a 1.4% increase can be expected.