Revolution in the IT department

Interview with Anders Lund Rendtorff, Director Corporate Communications, Oracle.

Companies are demanding more for less from their IT departments in an IT revolution that is going to force many IT consultants to seek new pastures, and customer experience is the new black. Those are the predictions of Oracle’s Director of
Corporate Communications when asked about the tendencies for 2013 and beyond.

If you ask Anders Lund Rendtorff, Oracle’s Director of Corporate Communications, the most important tendency for 2013 will be reductions in complexity and costs – and the IT 
department must be in a position to support innovation.

‘And this is something of a challenge when the company has invested money in traditional on-premise, and on top of that 60-70 percent of the IT budget is allocated to simply maintaining the existing infrastructure.  There is not much left over for innovation,’ he says.

Oracle is meeting customer challenges with integrated systems, which are the tech industry’s answer to simplifying IT, driving innovation and handling big data – and yes, the last item is once again among the trends this year.

Consultants must assess skills

Costs have to come down, and Oracle’s customers are extremely focused on carefully selecting projects for investment. A project will be considered only if there is a business case, such as a customer need that cannot be postponed or the expectation of a return on investment, in that it will equip the company to attract new customers. When the companies are simultaneously intent on simplifying their infrastructure and making it more dynamic, IT consultants should, according to Anders Rendtorff, ask themselves whether their skills support this powerful trend.

’Handling the data explosion is going to be an ongoing challenge for businesses, so as a consultant you must be aware of how you are helping the company deal with it – and assess whether your skills are good enough.’

A change is coming with regard to how resources are used. Oracle is on the forefront of development in relation to integrated systems, but the competition are working along the same lines. When there is such a strong movement towards eliminating complexity, one of the goals is also to use fewer human resources to run the infrastructure: The human resources you have need to be freed up to focus on generating business. Anders Rendtorff:

’Our sales of integrated systems are growing at a triple-digit rate. I am sure we are going to see the same trend among our competitors. I am not saying that the integrated systems are going to put a lot of people out of work, but it is worth thinking about where the jobs are going to be in the future.’

Revolution in the IT Department

There is something of a revolution going on in IT departments everywhere.  At present, there is typically an IT manager in charge of subordinate skills like database managers, people who understand servers, storage and networks – employees who fine-tune and make sure everything works behind the scenes. When an error occurs, the troubleshooting process must consider compatibility between versions and operating systems. It is this complexity that integrated systems can weed out of the infrastructure. Anders Rendtorff:

‘That means some of the old skills will gradually become redundant, but the idea is that these skills should be relieved of tasks that are basically not value-creating. The fine-tuning simply means that you can deliver. The actual services are to support business operations, run the web shop, be active in social media, deliver accounts, manage the supply chain, etc.’

Focus on data management

The burgeoning mass of data is driving the revolution in IT departments because businesses need tools capable of managing big data. The way we act as consumers and employees when we operate cross-channel and use digital content is generating colossal growth in data quantity. If we keep this up, the amount of data will exceed the physical capacity of the data storage market by 2020.

‘We cannot produce storage solutions that are big enough. That creates a number of challenges in and of itself, from how you compress data to how you filter the noise and store the data you need in the most cost-effective way,’ Rendtorff says.

In addition to integrated systems, Oracle is responding to the need for data management with several analytics products that are becoming a significant aspect of the Oracle cloud world.

Capitalising on social media

The analytics products will be used for purposes including extracting value from social media, which also feature prominently in the 2013 landscape. Not everyone has figured out how to capitalise on social media and if you are unable to do that, analytics become a critical component of the process.  Anders Rendtorff:

‘As part of our cloud solution, we sell analytics tools that reveal what people are interested in and how their interests relate to other areas of interest. What you get is a clear ‘sentiment analysis’ – whether people are talking about your product in favourable or critical terms and the contexts in which the product appears.’

The individual company can use this knowledge in a variety of ways. One is how you select the best spokesperson to market your brand. An American car manufacturer needed to decide which Olympic athlete they wanted to use to market a particular car.  They used Oracle’s solution that connects to the Twitter tube and pokes its analytical nose into all Twitter traffic – billions of tweets. In the initial phase, the car manufacturer had a shortlist of athletes, such as basketball stars, but when they analysed what the target group were ALSO interested in, and what news they were reading about Olympic athletes, the customer discovered that they should use one of the swimmers.
She was not at the top of their list, but they found the target group were actually more interested in her than in the other athletes. 
Anders Rendtorff:

‘When you design your advertising, you get hold of a context that brings you closer to your target group. If these tools were not available, this would have been a very difficult and time-consuming analytics task. And since the tools are available as a cloud service, you can simply assess whether or not you want to pay the price. You do not have to first go out and invest in an infrastructure, build it up and acquire internal skills.’

The gold mine of customer experience

One of the areas in which consultants may find future projects is customer experience, a major focus for Oracle right now.

A study Oracle performed in Europe shows that 80 percent of customers have switched suppliers at least once due to a bad experience.
In addition, four out of five are willing to pay more for a product in order to gain a better experience or feel that they have been treated well. We consumers are getting less patient as we discover what is actually possible Once you have experienced good, fast service, you cannot understand why another supplier cannot offer the same.

From an IT perspective, the customer experience is determined by a wide array of components. One of these is classic CRM – knowing who the customer is – but it is also pertinent if the customer has a clear overview of their involvement with their phone company, bank, or insurance company for example.
Anders Rendtorff:

‘Customers are sending clear signals. You have to react to such strong signals and there will be quite a bit of consultancy work involved in helping companies provide a good and consis-tent customer experience. Especially if you can clarify what has to be done to improve the customer experience and you can help businesses make their infrastructure more interoperable.’

The greatest challenge for businesses is going to be exactly that – to tie the systems together and take a businesslike approach to the challenge. The solutions you deliver have to be designed together. A lot of companies have an embedded conflict between business and IT: Management do not feel that the IT department is supporting business and the IT department feel they are seen only as a cost. These attitudes towards each other make it difficult to create solutions where you think of business and technology as one, but this is absolutely critical to customer experience success.