Leading-edge Solution Accelerates Business Transformation for Information-Products Companies: How and when will this disruptive solution change your business?

By Kathleen Goolsby
 

Introduction

In his Training ’97 keynote address, management guru Tom Peters introduced his Circle of Innovation concept. He told the companies in the audience that they need to constantly change and radically adapt in order to stay competitive. Without the agility to be able to anticipate and react to change, companies cannot drive business growth.

Although innovation enables agility, it also disrupts business.

As referenced in The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (by Clayton M. Christensen, Harvard Business School Press, 1997), history is full of instances where a competitor’s innovation disrupted—and even destroyed—a well-established company’s core business model.

This paper discusses a disruptive business solution that will help information-products companies (IPCs) change the way they do business. The solution enables information-products companies to quickly transform their businesses through a dynamic new capability that reduces the cost of data processing/management, dramatically decreases cycle time for product delivery and significantly increases the richness of a company’s information products. 

Thus, adopting this solution will change the market position for information-products companies (as well as their clients in multiple industry segments).

As Christensen points out, it is better to be the disruptor than the disruptee. Information-products companies not adopting this solution risk losing significant market share and will be behind the competitive curve by at least 12-18 months.  

Competitive challenges of information-products companies

No matter the industry, today’s companies depend on information-products companies (IPCs) to provide them with comprehensive market intelligence and business analytics that can help them make more effective decisions regarding customers and competitors. But IPCs face major business challenges in delivering effective service to their clients.

Because increasingly competitive marketplaces necessitate making decisions faster, IPCs’ clients now demand faster speed of delivery of information services and products. Thus, IPCs are now forced to figure out how to dramatically reduce cycle times—in many cases by a factor of tenfold. Their clients also demand better-quality data. Nevertheless, despite the need to invest in improving processes and products, IPCs, like their clients, need to reduce operational costs.

Compounding this scenario is the fact that most IPCs have an inflexible information technology (IT) infrastructure. They struggle with outdated systems that are too expensive to operate and are incapable of supporting the velocity of data processing that is required in today’s market. Instead of maximizing investments by focusing on innovation and improved products, their system inefficiencies cause them to invest in ways that do not directly drive competitive advantage.

As an example, when a system is not scalable for new business or not efficient enough, companies typically have a collection of legacy systems and applications requiring more personnel than today’s state-of-the-art platforms. A company might have 100 people maintaining applications, for instance, instead of just 25 people necessary with a more robust system. To address this issue, many IPCs also, as a parallel development effort, have undertaken expensive internal projects attempting to bring their systems up to date by migrating to new platforms. These attempts have a very low success rate—not only because of typical reengineering challenges, but also because the complexity of migration expands exponentially when there are large volumes of data to migrate.

In today’s competitive arena demanding agility, such a do-it-yourself route keeps a company bogged down and prolongs the inability to grow its business.

The solution

The Innovator’s Dilemma author, Clayton Christensen, states that one of the four keys to managing innovation to improve chances of success is to leverage the right capabilities. This is the approach taken by IPCs now adopting Acxiom® Corporation’s business solution for scalable, configurable, grid-enabled data products manufacturing and management.  (Note: This offering is a highly specialized solution for IPCs; it is not a ubiquitous grid utility computing platform to run existing applications, as many vendors offer today.)

Simply put, Acxiom first reengineers an IPC client’s complex legacy data processing infrastructure to run on some derivative of Acxiom’s grid-enabled data manufacturing architecture. (See Figure 1).

Acxiom then works with the client to build a transformation roadmap, including a well-thought-out client migration plan. Then, by leveraging Acxiom’s intellectual capital, transformation experience, state-of-the-art technology tools as well as information management innovation and expertise, the company works as a technology partner to execute upon the transformation. The result is a state-of-the-art data-management factory that enables an IPC to gain a dramatic competitive advantage with the ability to quickly and cost effectively create new, richer products.

Case in point:

Early adopter, Information Resources, Inc.

Information Resources, Inc. (IRI) is a global provider of market content, analytic services and Business Performance Management solutions for the world’s leading consumer-packaged goods (CPG), retail, and healthcare companies. For its clients, IRI captures purchase activity from over 37,000 retailers and 70,000 ScanKeys from its Consumer Network™ Household Panel, repackages it, integrates it and creates a cross-market view of how a company’s products (and its competitors’) are performing in the marketplace. 

IRI has an ongoing commitment to facilitate the transformation of the CPG and retail industries by providing real-time actionable business insights to its clients. But the huge volume of data that needs to be processed and integrated from daily retail, shipment, inventory, and consumer data updates was a problem.

“We had a very good idea of what we wanted to be able to do around grid computing and around the next generation of computing capability,” recalls Marshall Gibbs, CIO at IRI. They issued an RFP to find a partner to help them jump start their transformational vision for their industry and their clients. “But across the number of vendors that claimed to have capability in grid-enabled infrastructure, none of them could actually deliver—until we met Acxiom,” Gibbs states. “They were actually running their own business off a grid-enabled infrastructure and had been through the transformation of moving their primary product set out of their old data factory into this new grid factory.”

IRI signed a multi--year outsourcing contract for Acxiom to provide IRI’s data center operations and support the delivery of its next-generation market insights and decision-support solutions. The move to Acxiom, says Gibbs, gave IRI a significant increase in computing power and performance for the money, as well as access to technology that dramatically streamlines its ability to integrate key data.

Value proposition of Acxiom’s solution

One of Acxiom’s core competencies is creating information products and services to support its clients. Seeking a better, faster, cheaper way to process vast amounts of data and analytics for itself and its clients, Acxiom several years ago created a revolutionary, proprietary operating system (its grid technology environment), which has been in production since 2003. (This is the same technology used for Acxiom’s information infrastructure solutions for customer data management.)  It is, in fact, the largest production grid environment in the world.

Thus, clients’ advantages with the Acxiom grid-enabled data manufacturing and management solution discussed in this paper include the fact that it can be implemented quickly because the groundwork has been done by Acxiom. Grid technology is not bought; it is either built or accessed by outsourcing. It is extremely expensive and time consuming for a company to attempt to build its own grid infrastructure; thus, such an undertaking will prevent agility and erode value.

Moreover, hundreds of people at Acxiom work on improving the efficiencies of the infrastructure and the data manufacturing process. Clients get the benefit of Acxiom’s history of innovation and its investment in continual improvement. The Acxiom solution also reduces security risks; ensuring security and privacy are an element of Acxiom’s core capabilities.

To date, no company has commercialized grid technology the way Acxiom has for this specialized solution of data management; its level of grid computing is currently two years ahead of the rest of the market. While the technology and the advantages it brings are certainly leading edge, it has the valuable attribute of already being an enterprise-class technology. It is a highly redundant, fully monitored and managed environment. 

The outsourced solution can reside in an Acxiom facility or be deployed in a client’s facility that Acxiom manages on behalf of the client. The grid environment connects to a client’s existing business systems.

Grid enablement is a better, faster, cheaper technology, providing companies with the following components of value:

Better—

·         More reliable environment; each node in the grid is mirrored in another city so, if the data center takes a hit, the data remains safe

·         Capacity to store more data

·         Granularity and integration of the data increases the richness of data products

·         Scalable with enterprise growth needs

• Flexibility for multinational locations (accommodating Europe’s safe harbor laws associated with transmission of information across the ocean)

Faster—

·         Speeds up cycle time for creating and delivering new products

·         Speeds up time to market by not having to build the grid infrastructure and by Acxiom doing the reengineering work

Cheaper—

·         The grid computing platform displaces more expensive computing platforms, thus reducing the cost of processing data

·         Acxiom helps clients reengineer and redesign their data manufacturing process, eliminating manual intervention and redundant processes

BTO Delivery Model. Finally, unlike technology solutions from hardware/software vendors, Acxiom is an outsourcing service provider. A key element of value is that the solution is delivered in a Business Transformation Outsourcing (BTO) model. This provides two major benefits to clients, enhancing their ability to maximize their IT investments:

•  Risk sharing. Acxiom will share the risk of achieving business transformational outcomes with the application of the technology and services solutions.

• Lifecycle. Recognizing that outsourcing is a long-term relationship, Acxiom helps its clients manage the technology lifecycle over the term of the contract

For more information , please visit www.acxiom.com or contact Larry MacEachern at 1.877.944.1501