ust three years old, Stratio is now helping the likes of BBVA, Sony, Telefonica and Carrefour reinvent themselves around big data.
Stratio has based their approach on learnings from the world’s highest growth companies – disruptors who have built their businesses around data from the very beginning.
However, the company has a relatively extreme approach to digital transformation, which is to rip out legacy IT and rebuilt the IT architecture from scratch using big data technologies and open source solutions. It tells Information Age that ‘anything less is the road to obsolescence as we move into the machine age’.
They advocate shifting from an application centric approach to a data centric one that unifies operational and informational data stores under a single architecture – removing the need to duplicate data from operational systems into separate informational systems for analysis.
As well as reducing costs and inefficiencies, the data becomes the central asset driving the business rather than merely supporting or enabling it. And more often than not the data is the business.
In an interview with Information Age, Oscar Méndez – CEO at Stratio – discussed the role of big data in digital transformation.
Why is big data fundamental in digital transformation pursuits?
The digital disruptors of today were the pioneers of big data. They embedded data smartness into their operations and into the products and services customers buy. Indeed, these companies have passed the point where data merely supports or enables the business – increasingly, the data is the business. They attract users through better search algorithms, recommendations from friends and colleagues, suggestions for products to buy and highly targeted ads.
>See also: How to manage big data in the age of digital
It is precisely their mastery of data that has given them a very real and seemingly unreachable status as digital disruptors. As we move into the machine and AI age, incumbents will not be able to compete unless they put Big Data at the heart of their digital transformation.
How would you define digital transformation and why is it important?
Most incumbents have been investing heavily in digital transformation projects aimed at eradicating information silos and improving how data is used across their business.
But while they have moved beyond the era of the traditional data warehouse and are using big data technologies on Hadoop clusters and NoSQL databases to improve their analytics capabilities, they are still unable to match the performance of disruptors.
This is because they still take an application-centric approach to IT. Even without the threat of shutdowns, enterprises today waste more than 50% of their IT budgets on inefficient application workload placement, configuration, and management. We believe this legacy approach to IT is the perfect road to extinction.
>See also: The journey of data storage: what’s next?
The only way for incumbents to compete in the future is to radically rethink their entire IT infrastructure. After all, digital disruptors didn’t need to merge Big Data technologies with traditional IT infrastructures – they built their businesses around data from the beginning. For Stratio, digital transformation means replacing all legacy IT with the same data-centric architecture as disruptors.
How have you helped your clients reinvent themselves around big data?
Stratio brings together the latest, most disruptive technologies into a product that transforms businesses in-flight. Stratio DataCentric is designed to help Fortune 500 companies radically overhaul their information architecture in small, tactical steps and put data at the core of their business so that daily decisions and strategic planning can be taken based on powerful insight and well-grounded knowledge.
With a lack of skills and inertia in organisational culture being major barriers to transformation, we provide both the technology and the skills that companies need. Our team of 300 staff accompany clients on their journey through transformation and we often establish joint-ventures.
For example, the digital Startup Datio was born out of a joint venture with BBVA, to lead the bank’s digital transformation. Datio’s success comes from the fact that it brings together the resources of a leading bank with the culture and agile organisation of a digital startup.
We recently completed the first live installation of Stratio DataCentric within the cloud architecture of BBVA. The product was rigorously tested to ensure it met established security, stability, performance, and fault-tolerance requirements.
Is your approach different from other competitors?
Our competitors sell technologies that complement, rather than replace, legacy IT. Stratio uses the same technology paradigm as Silicon Valley disruptors. Our product uniquely combines all operational and informational processes into a single architecture so that any business department can access the data at any time, meaning that the informational and operational silos of the company are merged, saving time and increasing accuracy. By eliminating the need to duplicate data, it delivers inordinate gains in performance.
We are also different in how we deliver projects. Rather than sell closed projects with fixed parameters and deliverables, we use co-working models based on trust in which we work together with our client on open projects: We review where companies are in their transformation process and what their current needs are, but we accept that these needs may change and we have trust agreements with our clients which provide the required flexibility.
Can you provide any examples of how your customers are benefiting from this approach?
We are now helping a number of industry-leading companies to put data at the heart of business processes. This is the only way for companies to ensure a customer-centric approach to business in which they provide a seamless omnichannel experience and use data intelligence in real-time to improve decision-making processes.
For example, we have integrated a fraud prevention and detection model in a health insurance company’s systems, developing an alert that sends real-time warnings whenever an unexpected action is detected.
>See also: Royal Mail’s data journey
By ingesting and analysing huge volumes of data in real-time and cross-referencing that data with a series of specific rules, the company is able to detect and stop any transactions that suggest fraud is taking place.
We have also developed a digital promotions platform that sends targeted deals to the customers of a global retailer in real-time. The deals can be personalised thanks to information collected from the company’s loyalty card that contains years of historical consumer data and the information taken from each new digital receipt generated at the moment of payment.
This data is processed using recommender systems and clustering techniques that mean the company can gain a deep understanding of each individual customer and adapt its offering accordingly.
These are both examples of initiatives that would not have been possible for our customers to achieve before working with Stratio.
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