Data management in the flesh

What sound data management looks like – and does – for SMBs.

Abstract: What does good data management look like for a small to midsized business? What are
some of the ways to get there? What benefits can SMBs expect if they execute to plan? This is
the third in our series of articles that examines the ins and outs of data management for SMBs.

By Andrew Brooks

At least 60 percent of all new data an organization acquires or creates is analyzed and archived
for future use. Given the powerful and fast-evolving data capture technologies out there, this
means a mammoth data management challenge for companies of all sizes, but especially for
small to midsized businesses (SMBs).

In this article, the third in our “Spotlight on Data Management” series, we look at the elements of
any successful SMB data management solution, and the process involved in building one. Data
management is a question of architecture. The word “architecture” refers not only to how the IT -
hardware and software - is set up, but also to how the system integrates with and supports the
goals, strategies and processes of the enterprise. What kinds of technologies are required? What
role should business process requirements play so business users get what they need? How can
the solution be future-proofed to cope with organizational growth, strategic changes and market
changes? And what about the people side?

In the past, the IT part of the equation has tended to dominate not only the eventual
implementation but also the design and planning that precedes it, often with the result that the
solution doesn’t perform as expected. The technology has often forced business processes to
accommodate its own data flows and categories, pulling the project away from its goals and
resulting in a skewed, off-target implementation. In addition, vendor promises, the “quick fix”
approach of naïve buyers and simple miscommunication can also play a role in creating a
mismatch between need and solution.

The advent of the service-oriented architecture (SOA) concept referred to in previous articles
promises a way out of this dilemma. SOA is a comprehensive approach to data management in
which business processes and demands take the lead and the supporting technology adapts
responsively in real time to deliver applications, data and services as required.

The problem is that the SOA idea – and in particular some of its more advanced elements such
as service orchestration and composite applications – remains very much on the drawing board,
with limited and incomplete application in the world of business. Immediate practicalities still rule
when data managers think about making changes, especially in smaller companies.

“SMB data management is done for survival,” says David Linthicum, enterprise IT guru and CEO
of Reston, Va.-based application integrator Bridgewerx. “Basically they do it simply to preserve
data and to maintain competitiveness and productivity, for example by keeping inventory or
customer information in good working order.” They just aren’t going for the big enhancements
such as data warehouses or repositories, let alone SOAs.

One major difference between SMBs and large enterprises is that data in SMBs tends to be
scattered in various systems and applications instead of being centralized. Smaller companies
are also more likely to have integration challenges as they prefer best-of-breed applications – or
their own – over the enterprise-scale packages that deliver common processes and data models
from one end of the organization to the other. And according to research by Boston-based
Aberdeen Group, enhanced ability to integrate applications is one major driver of data
management projects.
But some industry observers say that SMBs have some advantages going into data management
projects too. Aberdeen points out that midsized businesses actually have more of the required
technology skills on hand than do larger companies (and smaller ones). Moreover, they generally
have less complex IT infrastructures, learn faster from their mistakes and are better at change
management (“For Mid-Sized Enterprises, SOA’s Benefits Begin with IT,” January 2006).

“SMBs have an advantage because their business-IT alignment tends to be better due to the
ease of coupling IT with the business,” says William Mougayar, vice-president and service
director, Technology Practice at Aberdeen. Mougayar does believe SMBs will have to wait a while
yet for the full benefits of SOA technologies, as these are still targeted at large enterprises. They
may ‘inherit’ SOA capabilities as their IT vendors add them to their product lines in response to
demand from larger customers, but in the meantime SOA-scale projects just aren’t in the cards.

Planning and implementation

The odds of a data management project succeeding are greatly improved if the venture starts out
with buy-in, sponsorship and accountability from the executive level. It helps if the idea itself
originates with business users and process managers, but the source of the initiative matters less
as long as it makes good business sense.

Executive-level sponsors can defend the project, ensure that it receives adequate funding,
mandate that staff be spared for the necessary training and assume responsibility if and when
things go wrong. They can also make sure that the business rationale takes precedence and that
the IT side keeps things in perspective.

That was the experience at Toronto-based Tarion Home Warranty Corp., which licenses home
builders, ensures that they comply with homebuyer protection laws and provides redress when
they don’t. When the company implemented a new Customer Service Standard (CSS) in 2003, it
recognized that it needed to make a technology move. Tarion’s case-handling process was
paper-based, slow-moving, plagued by unnecessary duplication of effort and error-prone.

Tarion undertook a massive upgrade for its CSS support system, implementing Kofax Ascent
Capture, an optical character recognition (OCR) platform for document handling and data capture
tied to IBM’s DB2 Content Manager software. It was all backstopped by PeopleSoft customer
relationship management (CRM) software along with some of the vendor’s financial modules and
other functions.

The implementation was a case of business processes first, technology later. “They were quite
happy to let us figure out the How – once they’d figured out the What,” says Judy Burton, project
manager. In fact Burton and her team weren’t cut loose to shop for technology until a couple of
months before the deadline for rollout. That’s a pretty compressed timeframe by most standards,
but it was feasible because of the mutual understanding between IT and the process shop.
“There needs to be a lot of fundamental respect for that model to work,” Burton says. “It was a
deeply pragmatic discussion – not a question of just automatically going for the most expensive
technology.”

A similar process took place at Schukra, a Windsor, Ont.-based supplier of seat support
structures to the automotive and aviation industries. In Schukra’s case the upgrade involved an
overhaul of hardware and software. Schukra replaced an old, maxed-out Unix box with an IBM
iSeries server running Report Program Generator (RPG) and an IBM DB2 database. At the same
time it migrated from version 6.04 of SSA Global’s Business Planning and Control System
(BPCS) ERP software to version 8.2.

To a degree Schukra’s upgrade conformed to what David Linthicum says about the “survival”
nature of most SMB data management projects. But Laura Ryall, director of MIS for Schukra’s
parent company Leggett & Platt, insists that the process overhaul was way more than a matter of
holding the line. “My goal was to hand the users a tool that was much more powerful than what
they were using before. We’re getting a lot of pressure in the automotive sector: I had to make
sure that the processes were enhanced if anything, rather than making users change to
accommodate technology.”

The customization trap

But sometimes it pays to live with what the technology gives you. Sooner or later in any data
management project, the notion of customizing a purchased software package arises, whether it’s
a question of improving how the software works, adjusting it to the particularities of the company
or market niche – or just fixing a glitch the vendor hasn’t caught yet. But Ryall was determined to
leave the store-bought code alone as much as possible.

The customization idea came up because the BPCS method of handling the monthly cost roll
process (a management accounting function) didn’t quite match the way Schukra does it. “We
had to do some changes,” Ryall says. “But we didn’t change the ERP itself. We modified the
project to use portions of BPCS with portions that we wrote ourselves to meet the needs of the
organization. By keeping the off-the-shelf product ‘vanilla’ we can more easily handle changes
and upgrades in future.” Integrating new software packages into Schukra’s systems will also be
that much easier.

Judy Burton’s strategy for Tarion was to commit to a suite of products from a single vendor –
PeopleSoft in this case – thereby ensuring that they were integrated from the start. They’ve gone
one better, however, by building their own integration into the system. “We only wanted one of
our operational systems to have a master copy of accounts payable,” she says. “That was in the
customer relationship management system, so we put data in there to identify who we would
have accounts-payable relationships with and passed them from the CRM into the A/P system.
But that data can only be changed in the CRM system. That’s an example of how we’ve
integrated the two.”

Ongoing vendor support is essential during the project phase to keep the implementation on-track
and ensure that the system performs as required. What’s perhaps less well known is that post-
implementation vendor support can also play a role in enabling new processes and in developing
the skills base of the IT staff and system users. At Tarion, for example, Burton says that subject
experts were hired from PeopleSoft when new requirements came up. “Our model here is ‘show
us, teach us and go away’,” she says. “We call vendors in to do training regularly. Given our size
we’re not going to send ten people on a course for a week: if I do that nobody’s doing the work.”

Burton hired vendor experts to train her staff in the configuration of IBM’s Content Manager
software. As a result, that capability is now in-house. A more recent example is the company’s
development of a portal that makes form data available to builders. No one on staff had any idea
how to build a portal with PeopleSoft tools, so Burton hired someone from the vendor for several
weeks to train a couple of her staff. Now that skill set is also a permanent part of Tarion’s
repertoire.

With data now available via the web, Tarion’s claim investigators can work from home, and
Burton is now looking at building functionality for Tarion’s legal team when court cases come up.
“That’s the way to use vendors,” she says. “You don’t want them telling you how to run your
business, but I don’t believe you can do a project with this kind of technology without getting them
involved.”

Web-based data management also means data can be shared outside an organization’s four
walls. SMBs in the manufacturing space, for example, can share detailed production data with
contract manufacturers halfway around the world and keep tabs on manufacturing schedules,
product quality and delivery. Inventory visibility systems can be set up to send suppliers
automatic replenish orders when inventory levels fall below preset thresholds – a crucial link in
just-in-time supply chains, and a telling advantage for SMBs who like to be able to offer faster,
more adaptable customer service than their larger competitors.

Laura Ryall noticed one unexpected benefit from Schukra’s technology project: an increased
accountability on the part of system users for the smooth execution of business processes. The
reason? A quantum reduction in the time those processes required. For example, the daily
manufacturing resource planning (MRP) run used to take three hours. The new system has
shaved that to 20 minutes. The daily cost roll has gone from an affair of six or seven hours to two,
and cheque runs have shrunk from one hour to around five minutes.

“In the past, you’d set up and then go home, knowing someone else would be there when it
ended or when there was a glitch,” Ryall says. “Now, some of them are done before you can even
get a coffee! It creates much more of a sense of ownership over the process. I’ve found that
people have become much more accountable.”

The improved availability of detailed data also enhances any company’s assessment of its return
on investment from infrastructure projects. However, for SMBs an accurate ROI picture can still
be difficult to reach, according to David Linthicum. “Infrastructure investment can have a five-year
payback, but people find it hard to calculate. They don’t understand that with the improved
infrastructure they may be able to maintain and grow the customer base better. It’s difficult to
reflect that back on the IT infrastructure.”

Linthicum says that companies like Wal-Mart are masters at building infrastructure and operations
costs into the pricing of what they offer on the market, but that while even a small infrastructure
tweak can bring huge benefits to an SMB, the equation is difficult to master. However, he says,
that shouldn’t stop them from going ahead. The benefits are there.

The starting point for the ROI assessment of any data management project is the cost of the
technology involved. In the next article in this series, we look at the cost elements of data
management for SMBs. Does a good data management solution have to cost a fortune? What
are the true costs of the technology underpinnings of a knowledge management strategy? And
does it really pay to buy on the cheap?