Systems Disparity: The Implications of Data Proliferation on Business Decisions

Description

The increasing reliance on data-based knowledge is rapidly changing how business is done. But the current discussion tends to neglect the often poor quality of insights won through the use of data warehouses by firms that have often not adequately maintained their data storage solutions. This article focuses on the problems generated by proliferated data systems and their impact on decision making in large, complex financial services institutions. Factors that lead to the emergence of systems disparity include: 1. Product and Service Diversity: Any large organization is in fact an umbrella covering many internal businesses that have been aligned to specific markets. 2. Back Office/Front Office Division. 3. Technology Advance: New systems are rarely built on the same platform as previous systems. 4. Natural Development. 5. Geography. 6. Expediency: The most expedient system solution is often implemented instead of the optimum architectural solution, which may take longer and represent opportunity risk. 7. Budgeting and Downsizing. Ultimately, failure at any point adversely affects the chain of events at all stages beyond the point of failure. In a disparate environment, the number of dependencies is greater than the number of disparate systems; and the greater the degree of divergence, the greater the operational risk to the enterprise.