Sunday, November 10, 2013

Big Data is Not Just Hadoop

Hybrid Solutions will Solve our Big Data Problems for Years to Come 

When I talk to the people on the front line of big data, I notice that the most common use case of big data is to provide visualization and analytics across the types of data and volumes of data we have in the modern world.  For many, it’s an expansion of the power of the data warehouse that deals with the new data bloated world in which we live.

 Today, you have bigger volumes, more sources and you are being asked to turn around analytics even faster than before.  Overnight runs are still in use, but real-time analytics are becoming more and more expected by our business users. 

To deal with the new volumes of data, the yellow elephant craze is in full swing and many companies are looking for ways to use Hadoop to store and process big data. Last week at Strata/Hadoop World, many of the keynote speeches talked about the fact that there are really no limits to Hadoop.  I agree. However, in data governance, you must consider not only the technical solutions, but also the processes and people in your organization, and you must fit the solutions to the people and process.

As powerful as Hadoop is, there still is a skill shortage of Map/Reduce coders and Pig scripters.  There are still talented analytics professionals who aren't experts in R yet. This shortage will be with us for decades as a new generation of IT workers are trained in Hadoop.

This is in part why so many Hadoop distributions are in the process of putting SQL on Hadoop.  This is also why many traditional analytics vendors are adding Hadoop and ways to access the Hadoop cluster from their SQL-based applications.  The two worlds are colliding and it's very good for world of analytics.

I’ve blogged about the cost of big data solutions, traditional enterprise solutions and how the differ.  In short, you tend to spend money on licenses when you have an old school analytics solution, while your money goes to expertise and training if you adopt a Hadoop-centric approach.  But even this line is getting blurry with SQL-based solutions opening up their queries to Hadoop storage. Analytical databases can deliver fast big data analytics with access to Hadoop, as well as compression and columnar storage when the data is stored within.  You don’t even need open source to have a term license model today.  They are available more and more in other data storage solutions, as are pay-per-use models that charge per terabyte.

If you have a big data problem that needs to be solved, don’t jump right on the Hadoop bandwagon.  Consider the impact that big data will have on your solutions and on your teams and take a long look at the new generation of columnar data storage and SQL-centric analytical platforms to get the job done.

Sunday, January 20, 2013

Top Four Reasons Why Financial Services Companies Need Solid Data Governance

Image licensed from iStockPhoto
In working with clients in the financial services business, I’ve noticed that there is a common set of reasons why they adopt data governance.  When it comes down to proving value of data management, it’s all about revenue, efficiency and compliance.

Number One - Accurate Risk Assessment

Based on new regulations like Sarbanes and Dodd-Frank, a financial services company's risk and assurance teams are often asked to determine the amount regulatory capital reserves when building credit risk models. A crucial part of this function is understanding how the underlying data has the on the accuracy of the calculations. Teams must be able to attest to the quality of the data by having in place the appropriate monitoring, controls, and alerts.  They must provide regulators with information they can believe in.

Data champions in this field must be able to draw the link between the regulations and data. They must assess the alignment of data and processes that support your models, quantify the impact of poor data quality on your regulatory capital calculations, and put into place monitoring and governance to manage this data over time.

Number Two – Process Efficiency

If your team is spending a lot of time checking and rechecking your reports, it can be quite inefficient. When a report generated conflicts with another report, it may bring some doubt to the validity of all reports. There is likely a data quality issue is behind it. The problem manifests itself as a huge time-suck on monthly and quarterly closes.  Data champions must point to this inefficiency in order to put in place a solid data management strategy.

Number Three - Anti-money Laundering

Financial Services companies need to be vigilant about money laundering. To do this, some look for currency transactions designed to evade current reporting requirements. If a client is making five deposits of $3,000 each in a single day, for example, it may be an attempt to keep under the radar on reporting. Data quality must help identify these transactions, even if the client is making deposits from different branches, using different deposit mechanisms (ATM or Customer Service Rep.) and even when they are using slight variation on their name.

Other systems monitor wire transfers to look for countries or individuals that appear on a list compiled by Treasury’s Office of Foreign Assets Control (OFAC). Being able to successfully match your clients against the OFAC list using fuzzy matching is crucial to success.

Number Four – Revenue
Despite all of the regulations and reporting that banks must attend to, there is still obligation to stockholders to make money while providing excellent service to the customers.  Revenue hinges upon a consistent, current and relevant view of clients across all of the bank’s products.  Poor data management creates significant hidden cost and can hinder your ability to recognize and understand opportunity – where you can up-sell and cross-sell your customers.  Data champions and data scientists must work with the marketing teams to identify and tackle the issues here.  Knowing when and how to ask the customer for new business can lead to significant growth.

These are just some examples that are very common to financial services.  In my experience, most financial services companies have all of these issues to some degree, but tackle them with an agile approach, taking a small portion of one of these problems and solving it little by little. Along the way, they follow the value brought and the value potential if more investment is made.

Sunday, January 6, 2013

Big Data After the Hype

Total Data Management

This year, I’ve been following the meteoric rise of big data. It has been a boon for vendors who are venturing into this area.  It has produced countless start-ups and much buzz in the data management world.

However, when it comes down to it, what we’re really talking about here is data management and data governance.  Whether you have to deal with big data, enterprise data or spread-marts, data needs to be managed no matter what size. The tides are turning for a total data management approach. Recent surveys shows that despite the market hype, most technologists and business users feel that big data is an off-shoot of data management, not a branch of technology in itself. 

So, why the hype?  I'm convinced it is mostly vendor-generated. In 2010, when big data began to gain notoriety, there was a disconnect for some vendors.  While partnered with traditional enterprise data management companies like the Oracle and IBM’s of this world, not all vendors were prepared for the growing popularity of open source and Hadoop. Others were (and still are) better positioned. They began talking about big data as a product differentiator. Vendors who don’t have the basic architecture for managing data in Hadoop have been and will continue to struggle. 

For example, ETL tools that have a basic connection to move data in and out of Hbase, Hortonworks and Cloudera can’t stop there.  The power of Hadoop must be harnessed, and it’s not always an easy thing to do when your technology requires executables tied to CPUs.  One of the powerful things about Hadoop is that it scales based on a languages like PIG, Sqoop and Java without having to install anything.  Want to expand the number of servers?  Add a datanode server, tell the name namenode and rebalance - and your off and running.  However, even this simple innovation is more difficult on some vendors’ architectures than others.

Another rethinking that is taking place in the market is long-standing CPU-based pricing structure.  Vendors who they keep their pricing structure based on core processors for Hadoop will continue to struggle because it runs counter to the power of Hadoop. You hear about the volume, velocity and variety.  Technically, if you want to step up the volume with another datanode, it’s no big deal. However, it becomes a big deal if you have to renegotiate a vendor contract each time.

Last year, around this time, I did write about the various costs associated with the scale of data. In summary, the costs of licenses and connectors are the bigger for enterprise data, while the costs associated with skills are more likely to affect you with big data.  There will come a time where the skills gap will be closed, however.

In the year 2013, we’ll begin to see the un-hyping of big data in favor of this total data management approach. For buyers, big data will be a tick-box in their RFP’s in the effort to manage data, no matter what the size.

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Disclaimer: The opinions expressed here are my own and don't necessarily reflect the opinion of my employer. The material written here is copyright (c) 2010 by Steve Sarsfield. To request permission to reuse, please e-mail me.