BITSA

Business/IT Strategy & Architecture

Cloud Apps World Europe

Unlocking the value of
Big Data/Analytics

November 12. 2014

Cloud Apps World Excel London

Linkedin: Steef Klein

Data Management Panel

Unlocking the business value of integrating data into the cloud
#Appsworld: November 12. 14:00

Comprehending the challenges of storing and understanding big data

Best practice in using the cloud to better manage data (big and small)
Examining the benefits: Case study examples of cloud data management optimising
ROI
Analysis: What tools are available to use the cloud to analyse big data and boost its
value?
Security considerations: Necessary steps organisations should take to safeguard data
accessed via the cloud

November 12. 2014

Cloud Apps World Excel London

Big/Data analytics
The industries willingness to use it.
Big data competitors. These are organizations that have access to extensive information from
operations or customer relationships, and use that data intensively. Examples include investment
firms and functions such as marketing.
Overachievers. These are organizations that have limited access to data, but are committed to
using it as much as possible to inform decisions. Examples include consumer packaged goods
companies and operations departments.
Underachievers. These are organizations that have access to extensive information, but fail to
take advantage of it. Examples include telecom companies, and finance and sales departments.
Disadvantaged. These are organizations with limited access to data that rarely use information to
support the business. Examples include healthcare and human resources.

November 12. 2014

Cloud Apps World Excel London

Source: Thomas Davenport

The rise of the 3rd platform

Dedicated, agile and integrated solutions will prevail

In 2020 > 90% of the total IT industrys growth will be based upon 3rd platform
initiatives
The industrys 3rd platform revenue will be 40% of the total IT industry's revenue
A mature 3rd platform will support all SMACT building blocks.
November 12. 2014

Cloud Apps World Excel London

SMACT: Social business, Mobile solutions, big-data/Analytics, Cloud services & internet of Things

Source: IDC

SMACT Building Blocks

Social business, Mobile solutions, big-data/Analytics,
Cloud services & internet of Things

November 12. 2014

Cloud Apps World Excel London

Cloud Computing Services

SMACT is on the move

In 2014, parts of SMACT has reached the plateau (aPaaS, SaaS, mobile)
Big Data is lagging; software industry must integrate this within aPaaS
IoT is on the radar, but still needs time to mature
Cloud Services, aPaaS, Mobility, SaaS, iPaaS, has reached plateau
Social Technologies not mentioned (from IDC), but is embedded within aPaaS, Mobile, etc
November 12. 2014

Cloud Apps World Excel London

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Source: Gartner

Mission, Vision & Strategy

Many companies struggle with the execution
STRATEGY MAP
Process
Theme

Operations Management
Return on Capital

Financial

Customer

Operating Margin

Revenue growth

Short delivery
time

On time,
error free
delivery

Value Streams &

Intelligent equipment.

Improve
Quality

Process

Innovative
value added
products

Optimize Supply Chain

& Manufacturing
Processes

Middle Management/
Workforce alignment

Learning&Growth
Strategic Systems
Decision making environment
Big Data/Analytics support
Mobile solutions

High degree of flexibility

Skilled and trained workforce
Social manufacturing environment
Change Innovation process (IT)

BALANCED SCORECARD
Objectives

Measurement

Improve Profitability
Improve present and future
excess investment returns
Increase Revenue

Market value percentage

Operating income (EBIT)
Return On Capital (ROC)
Free Cash Flow to Firm
growth (FCFF)

Target

Initatitives

Budget

>30%
> 15% of revenue
> 12,5 %
> 7,5% annually

Right, error free, on time

parts
Be close to the customer
Deliver intelligent value
stream equipment

On time delivery to commit

Delivery time
Customer retention rate
New customers

> 99%
< 2 days
> 90%
> 10% of Revenue

Initiate Quality Control

Program
Best in class supply chain
& manufacturing KPIs
Identify Value Streams;
Use Mechatronica

Total supply chain costs

Order fulfillment lead time
Key components material
availability
Inventory turnover rate
Return on R&D investment

<10 % of revenue
< 20 days
< 7 days

Middle Management &

Workforce aligned with
strategy
Develop the necessary
skills (Lean/Six sigma)
Implement modern
systems
Reorganize R&D,
multidisciplinary teams
Acquire IT personnel
Introduce SCRUM

ACTION PLAN

>8
> 18%

Strategic awareness

Yr1 100%

Strategic job readiness

Yr1 75%; Yr2 100%

Systems availability

Yr1 - 75%; Yr2 100%

Reorganization readiness

Yr1 100%

Profiles & acquisition

SCRUM certification

Yr1 100%
Yr1 80%; Yr2 100%

Global processes
Standardize local factory
processes
Extend Service network
Hunter approach

$ XXX
$ XXX
$ XXX
$ XXX
$ XXX

Renew ERP
Implement MES (Incl.
Quality)
Implement APS (SOP)
Improve CRM usage
Strengthen PLM

$ XXX
$ XXX

Global Strategy Program

Job profiles, training

$ XXX
$ XXX
$ XXX

$ XXX

$ XXX

Communications
program

$ XXX

Develop training
schedule & execute

$ XXX

Over 50% of all European companies have a negative Free Cash Flow to Firm (Equity) -2013 Many of these companies struggle to lower their WC, COGS, etc.
A sound strategy in combination with an embedded business model change is needed
Previous too complex 2nd platform related IT solutions prevented a successful roadmap
November 12. 2014

Cloud Apps World Excel London

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Source: Aswath Damodaran

Optimising your ROI using the 3rd platform

Average annual cost savings about $730K per 100 users

Business productivity

9%

44%
34%

Infrastructure cost
reduction
IT staff productivity

14%
User productivity

WC and COGS reduction not taken into account.

A 50% reduction of the total supply chain costs is possible within companies which
are laggards.
November 12. 2014

Cloud Apps World Excel London

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Source: IDC

High level supply-chain metrics

Improving KPIs

November 12. 2014

Cloud Apps World Excel London

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Source: SCOR

Operational Excellence improvement

The possible influence of Enterprise aPaaS on Operational Excellence
(An example Figures are indicative)
On premise based Capex & Working Capital
Revenue
700.000
EBIT(1-t)
45.000
Total WC (15% of revenue)
105.000
Total Capex
42.000
IT Capex (3% of revenue)
13.704
Total Capex depreciation
33.600
Change in NCWC
0
FCFF
36.600

Cloud based Capex & working Capital

Revenue
700.000
EBIT(1-t) + internal IT Opex
46.824
Total WC (11.25% of Revenue)
78.750
Total Capex
37.686
IT Capex (2.1% of revenue)
9.390
Total Capex depreciation
30.149
Change in NCWC
-26.250
FCFF
65.537

Revenue of medium sized manufacturing company

Starting WC is 15% of revenue. Based on average WC research in the Mfg industry sector.
Best in class companies have a Non Cash Working Capital lower than 10% of revenue
An optimal supply-chain can reduce NCWC with 50% when a more complex supply-chain
is at hand.
In this example the operating Income Margin (tax rate) equals 6.4% of revenue. (Laggard)
The FCFF rises with 168%; the intrinsic value of the company , which is calculated over
multiple years will increase.
A business plan written for many manufacturing companies with a sound strategy will in
most cases result in moving from a laggard to a best in class company.

November 12. 2014

Cloud Apps World Excel London

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How to improve your equipment OEE

How can the OEE of an important asset be improved.

Down time: $100,000 revenue loss each hour.

Move to predictive or prescriptive maintenance.
Use Big-Data/Analytics to gather and analyze the information,
Use the SMACT building blocks in order to inform responsible management.
Use Hadoop to gather and process the data from a variety of sources.
Use e.g. Apache Mahout, a Hadoop add-on, to create predictive algorithms.
Use NOSQL or Graph databases to store collected data.
Use an Enterprise aPaaS solution to retrieve and display the information.
November 12. 2014

Cloud Apps World Excel London

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Source: Big Data Predictive Analytics for Proactive Semiconductor Equipment Maintenance: A Review

Big Data/Analytics
Use case example
Enterprise aPaaS Platform

Data
Mapping &
Reducing

Business
Logic
Predictive
Algorithms

Initial data filtering & formatting

Cluster

NOSQL
or
Neo4j
Graph Database

Query and Display

Any UI

Data Store

4
1

Define the different sources to mine

2 Retrieve initial data and filter and

format data within aPaaS platform

3 Map/Reduce data in Hadoop cluster
November 12. 2014

4
5
6

Create predictive algorithms inside

Hadoop add-on
Store all relevant data into a NOSQL or
Graph database
Use aPaaS platform+add-ons to
display end-results

Cloud Apps World Excel London

12

Cloud services and security

Will public Cloud services be accepted by the industry?
Having your own Enterprise App store is essential.
Monitoring & controlling enhances corporate security, industry compliance and employee
productivity.
If your aPaaS platform has a FISMA compliancy it will be certified and accredited by the US
Government.

The most eloquent example:

The US government accepts Salesforce1s aPaaS solution as a secure platform, which
is FISMA compliant.
New dedicated, multi-tenant government instances will allow U.S. federal, state, and local
agencies to rapidly deploy the latest social and mobile technologies in compliance with
FISMA requirements.
New AppExchange for Government delivers the app marketplace where agencies can find,
try and deploy cloud apps for the public sector.
New Government Partner Accelerator Program will train an army of 1,000 integrators to
transform government IT with salesforce.com cloud solutions.
Two-thirds of U.S. federal Cabinet-level agencies and governments in more than 80 percent
of U.S. states trust salesforce.com to power their social enterprises.
FEDERAL INFORMATION SECURITY MANAGEMENT ACT (FISMA)

November 12. 2014

Cloud Apps World Excel London

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Available aPaaS development environments

Some available tools to support complete SMACT
Salesforce1
Heroku
Worlds most powerful The leader in Gartners aPaaS magic quadrant
aPaaS polyglot platform.

Elastic Beanstalk
Amazons aPaaS solution

Azure
Microsofts aPaaS solution

Acquia
The Drupal only platform

November 12. 2014

Google App Engine

Java and Python

Openshift
Red Hats aPaaS solution

Engine Yard
Ruby, PHP and Node.js

Joyent
An independent aPaaS solution

AppFog
An aPaaS differentiator

CloudBees
Primarily Java

Cloud Apps World Excel London

Cloudera Enterprise
Hadoop based
Enterprise Datahub Services

14

BITSA
Business/IT Strategy & Architecture

November 12. 2014

Cloud Apps World Excel London

15