Driving business value with data integration

India Inc. is using data integration to drive business value. There is a shift towards a clear and precise strategy that recognizes data integration as a fundamental cornerstone of competitive differentiation. By Nivedan Prakash

Today, organizations across verticals have realized the importance of data integration platforms, which are seen as an integral part of their business intelligence systems. As is the case in other countries across the globe, the Indian market too has seen rapid growth in demand for data integration platforms.

In fact, in the last year or so, vendors have witnessed a rapid increase in data integration requests from their customers. Industry experts believe that this market is primarily driven by data warehousing, business intelligence and master data management needs.

As per Gartner estimates (Forecast: Enterprise Software Markets, Worldwide, 2008-2013, 3Q09 Update), the size of the market for data integration tools stood at approximately $1.34 billion as of the end of 2008, and a five-year compound annual rate of approximately 9.4% was expected. While the forecast growth has been substantially curtailed due to current economic conditions, this growth rate is quite healthy when compared to most other software segments.

If we go by IDC estimates then the worldwide data integration and access software market will grow to $3.8 billion in 2012, reflecting a compound annual growth rate (CAGR) of 8.7% from 2007 to 2012.

According to Bhavish Sood, Principal Research Analyst at Gartner, typically the two prominent use cases are data integration and consolidation for ERP and business applications as well as data integration for business intelligence initiatives. There is a slight uptake of these platforms for legacy modernization cases also.

“With data integrity being of the utmost importance, Indian companies are looking to have complete access to clean data, which would help them reduce costs. For large enterprises, especially banking, telecom and the government sector where data is huge, data integration is vital to ensure that data is not replicated erroneously to avoid inaccurate analysis. This would help enterprises drive operational efficiency. Error-free data migration is another growth area for data integration solution providers in the Indian market,” opined Dhruv Singhal, Senior Director – Fusion Middleware Sales Consulting, Oracle India.

Fuelling growth

To begin with, one of the key drivers for an enterprise wide data integration strategy is the existence of multiple versions of the truth. The existence of heterogeneous platforms makes it difficult to identify inconsistent and duplicate data, which contributes to the rising cost of data stewardship. In such a situation, it is crucial for organizations to have a single and consolidated view of all their customers as well as prospects across tiers and geographies. Companies are increasingly looking at imbibing this as a part of their intelligence strategy.

Girish Venkatachaliah, Director - Information Management, IBM Software Labs – India, pointed out, “There has been an interesting intersection of factors in just the last year. Firstly, with the economy slowing, clients have had to put their expansion plans on hold and focus on better optimizing their businesses to derive growth. Secondly, many years of automation efforts have contributed to growing islands of data from various channels such as ERP, Core Banking, HRMS, etc. Lastly, some of the early adopters of Business Intelligence and Master Data Management are able to derive a competitive advantage. All of these are driving a spurt in data warehousing and master data management projects. The underpinning of each of these projects is a robust data integration platform.”

Traditionally, organizations have spent a significant portion of their IT budgets on expensive infrastructure, e-mail systems, networks, and hardware; a further significant amount to build applications; and modest amounts on their organizational data.

However, over time, organizations have realized that the true business value that they have derived from these investments have been inversely proportional to their expenditure. The modest investment in data, the organization’s most strategic asset, has in fact delivered the highest business value. With this realization, data driven businesses are giving greater importance to their organizational data.

“We have seen several key business strategies including globalization, mergers and acquisitions, business modernization, driving operational efficiency through outsourcing non-core functions and cost reductions, governance and risk—all of which need data that is relevant, timely, and trustworthy. Many Indian organizations that have run projects over several decades with patchy hand-coding are now embracing the Informatica platform for enterprise level data integration and are establishing data integration as an organizational competency verses it being just a project discipline,” added Suganthi Shivkumar, MD, South Asia for Informatica.

Moreover, an increased focus on the innovative use of data, data mining, transformation needs, and availability of applications to derive information from historical data are also seen as growth drivers for data integration platforms in the Indian market.

Strategic approach to data integration

We would like to mention here that Indian enterprises understand the value of a strategic approach to data integration as a discipline. Some industry leaders are embracing a strategic approach to data integration. Invariably, it is driven by tech savvy, well informed visionary leaders who understand the power of information and how much value one can harness from the myriad touch points that their business already has.

Ashit Panjwani, Executive Director – Marketing, Sales and Alliances, SAS Institute India, commented, “Organizations today realize that managing growth and staying profitable in today’s marketplace requires them to take accurate decisions. This is possible when they have the power of insights to aid them in making factual decisions. However, successful insights are only as accurate and dependable as the data that they digest. With competitive intensity at an all-time high, data integration combined with analytics solutions is rapidly forming a critical part of organizational strategy.”

There are essentially two kinds of users when it comes to enterprise data integration. First, the ones who are working in tactical mode without realizing the value of enterprise data integration because, for them, it is like a quick fix that they look for in every project that they undertake. Often in these situations the quality aspect could end up being overlooked. They regard data integration as a project discipline.

However, the more forward looking and progressive enterprises have realized that, instead of looking at data integration on a project-by-project basis, it is better to look at it from a long term strategic perspective. They realize the importance of investing in a repeatable, reusable process. Today many Indian organizations are looking at data integration in its broader sense encompassing data quality as not just a project discipline but as a competency that they want to build across the enterprise.

“Yes, many of them do understand that the right information can be obtained from company data. These days, the competitive advantages are vanishing and no one can be sure of customer buying behavior. Therefore, to understand the customer, the market, short product lifecycles and logistics, for e.g., one can quickly create competitive advantages in the value chain,” asserted Ram Krishna G., Technical Head, SANVEI Overseas.

Uma Venkatraman, CEO, Ixsight Technologies, said, “A strategic approach to data integration should take into account an organization’s larger objectives. Most data integration initiatives result in data movement from a set of dispersed boxes to a single server without affecting the underlying quality of data or addressing issues relating to data consolidation. The result of this is that data is not useable by various business users though it is available centrally. This also means that no business intelligence is possible since the ‘garbage in garbage out’ theory would hold good here.”

Need for reliable and scalable architecture

Organizations need a reliable and scalable data integration architecture to solve existing and evolving integration requirements. Centralized information architecture is a risky proposition. Companies tend to have multiple databases and several applications making use of the data in different ways. A reliable and scalable data integration architecture helps companies take full advantage of data and make quick decisions on applications.

Panjwani highlighted that data integration forms the foundation of any enterprise intelligence system. Data integration infrastructure determines the quality and completeness of an organization’s data, the ease with which information can be accessed and applied in analytical applications as well as the flexibility in accessing future data sources.

Data integration manages the process of combining data from multiple sources into a single, comprehensive view of enterprise data. The ability to transform cross-organizational data from heterogeneous sources into actionable, insightful information has quickly become a competitive advantage for companies that have embraced data integration.

According to Sood, contemporary pressures are leading to an increased investment in data integration in all industries and geographic regions. Business drivers like the imperative for speed to market and the agility with which business processes and models can be changed, are forcing organizations to manage their data assets differently. Simplification of processes and the IT infrastructure is necessary to achieve transparency, and transparency requires a consistent and complete view of the data, which represents the performance and operation of a business.

The market for data integration includes solutions and services for building, deploying, and managing data warehouses, information systems, and data-centric architectures. Implementing these technologies is critical for companies interested in exploiting the advantages and agility offered by business intelligence and SOA to surpass their competitors and enhance their market share.

Demand for data integration-as-a-service solutions

Data integration technology capabilities that are offered as-a-service are increasingly being examined as enterprises begin to diversify deployment approaches.

This is particularly true when it comes to customer centric data (for example, CRM data) and market intelligence. Such information systems can be remote hosted at third party locations. Data integration as a service therefore fills up an essential lacuna in third party services. User companies are not looking for data integration services in isolation but as part of the complete ecosystem of which data integration is an important component.

Venkatachaliah added, “The movement towards cloud architecture is fueling demand for data integration-as-a-service. With an enterprise data platform and an underlying cloud capability, offering data integration-as-a-service is a logical extension.”

“Regardless of whether working within the confines of a public or private cloud, having a sound data integration strategy across all data assets is imperative to ensure that organizations benefit from the advantages of cloud computing such as improved productivity and lower expenses. Nevertheless, with the rapid growth and adoption of cloud-based services, the result for most organizations is more fragmented data scattered throughout the enterprise. The software-as-a-service (SaaS) model has been proved to provide business users with cost-effective solutions that are easy to provision, easy to manage and easy to use,” opined Shivkumar.

However, the benefits of this model are quickly diminished if the organization doesn’t maintain proper control over these data assets.

As organizations develop a cloud strategy, it is imperative that the organization remains in control of all of its data assets and that it has the greatest flexibility to access, integrate, and trust them, wherever they are. This flexibility can only be delivered through a sound data integration strategy that supports the entire enterprise including the cloud.

In coming years

The growth of the data integration platform is directly related to the size and multiplicity of databases and the newer applications deployed. As data grows, the requirement of mining increases, which in turn pushes the need for a data integration platform.

The growth of data integration solutions has been significant in the Indian market. Organizations are increasingly realizing the importance of not only having enormous volumes of data with them but also the fact that they need this data to be qualified and integrated, giving leaders a single view of their customers.

Organizations are looking to adopt data integration as their IT infrastructure demands accurate, up-to-date data that is highly accessible and flexible. In the past, organizations took data integration to be nothing more than joining two sets of data. Now they have realized that there is more to data integration than this. Having deployed various enterprise applications, they have realized that all of these applications need to talk to each other.

Venkatachaliah concluded, “The platform will evolve with increasing focus on data in motion i.e. streams of data/events. Most current sets of data integration players are exclusively focused on data at rest in databases, documents, etc. IBM is already starting to revolutionize this space with its recent launch of InfoSphere Streams that provides an execution platform and services for user-developed applications that ingest, filter, analyze, and correlate potentially massive volumes of continuous data streams.”

nivedan.prakash@expressindia.com