While bigger has been equated with better in the white-hot big data movement, size matters little if data cannot be processed and quickly utilized by business stakeholders. Performance issues result in revenue losses for many firms and highlight the need to improve on-premises and cloud infrastructures to meet the performance needs for “fast data”– practices and technology that accelerate an organization's ability to turn data into real-time business insights.
In July 2014, SanDisk commissioned Forrester Consulting to evaluate the impact of performance latency on businesses. To further explore this trend, Forrester developed a hypothesis that tested the assertion that system performance is a gating factor to business success. In the study, we found that inadequate performance affects key areas such as customer experience, support, and strategic decision-making, which ultimately all have an impact on revenue to some degree.
In conducting an online survey of 162 business and IT professionals and in-depth interviews with three companies, Forrester found that businesses generally understand the importance of system performance but face a number of challenges in making sure that system performance is optimal for both internal IT systems and external-facing systems.
Forrester's study yielded five key findings:
Although many companies with big data initiatives have made investments to harvest and gather as much data as possible for their businesses, a company can still miss out on major revenue-generating opportunities without efficient system performance. It makes little sense to find the proverbial needle in a haystack within your data if an opportunity to use that data disappears during the search. For example, a fraud detection system is less useful if it cannot flag a questionable transaction, or a series of transactions, before money has already changed hands.
Patience is no longer a virtue in the age of the customer, which Forrester defines as a time in which the power has shifted to digitally empowered consumers who demand access to information where and when they need it. Patience is a luxury that most businesses cannot afford, and the need for fast data will increase the need for low latency performance.
Speed is the new differentiator for businesses across all industries.1 It will be the only way companies will be able to cope with the massive data surges that will come from the 1 trillion connected objects and devices that will exist in 2015 via the Internet of Things (IoT).
Today and in the future, firms will be evaluating themselves based on a concept Forrester has called “the speed of the customer,” which is defined as:
The speed at which business must operate to satisfy the customers' need for immediate information, product, or service delivery. This speed will vary by industry and by engagement but must be as near to real-time as possible, as timing becomes increasingly critical to an enhanced customer experience.
Organizations today have two major types of infrastructure in their environments, which will both be benchmarked against the new requirements of the speed of the customer in regards to system performance (see Figure 1):
To succeed, businesses must operate at the speed of the customer (i.e., have low latency performance) for both systems of engagement (SOE) and systems of record (SOR). Our survey results showed that 65% of respondents feel that high-performance SOE are extremely important for their business, with 60% reporting that SOR are extremely important (see Figure 2). As well, 60% of respondents monitor performance for both systems and have performance service-level agreements (SLAs) in place for both systems.
Survey respondents also identified a number of positive business impacts beyond increased revenue that could be derived by accelerating performance of these systems, including (see Figure 3):
The real costs of latency are not fully understood by today's businesses. By steering focus toward performance acceleration and modern “fast data” architecture, businesses will be able to reach positive business outcomes quicker, which is critical to winning, serving, and retaining customers.
When asked if they felt their company was losing revenue opportunities based on the performance of their computing systems, a surprising 38% of respondents said yes. Further probing revealed that these businesses are losing revenue based on system performance due to the following factors (see Figure 4):
Assistant vice president, financial services
While not all companies feel they are losing revenue based on the current performance of their system, they are very aware of the impact that poor system performance could have on their business.
Systems of engagement are the most directly tied to company revenue, as they provide the interface through which the majority of customer interactions take place. As such, loss of revenue, loss of new customer opportunities, and lack of data for business intelligence were listed as the most significant areas of potential impact resulting from poor SOE performance. Systems of engagement serve as the public face for companies. Outages, sluggish performance, or inaccurate information reflect poorly on a company and can damage its brand.
Likewise, while not customer-facing per se, systems of record performance issues can also damage a company, as SOR often handle the back end of customer requests.
Survey respondents indicated that loss of new customer opportunities, order inaccuracies, and loss of revenue and employee productivity are the most significant areas of potential impact for poor SOR performance. SOE and SOR work side by side and are constantly exchanging data, and as more investments pour into SOE to match client expectations, SOR performance must continue to improve to keep pace.
Though there is universal acceptance of the importance of performance, there is a distinct perception gap related to the confidence in which IT and business professionals have in their systems. Only 13% of business respondents felt that their SOR were exceeding expectations for SLAs and 15% felt that way for SOE, compared with 45% and 37% of IT respondents, respectively.
While neither group feels that the systems are performing below standards, this gap in the results hints that these two groups have different views and expected outcomes for each system, which could help explain the gap. Reasons include:
The discrepancy between the perceptions of IT and business professionals highlights the changing relationship between the providers of IT services and their customers.
With the speed of the customer changing customer expectations, the need for rapid performance and provisioning is accelerating to a point where real-time or near-real-time delivery is becoming the only acceptable outcome. Ultimately, this has made business stakeholders less confident about the infrastructure resources at their disposal, whereby simply meeting an SLA is not enough to inspire long-term confidence.
Businesses are already monitoring and setting up SLAs for their systems, and the majority reported that they feel satisfied with their ability to handle both existing data and incoming data efficiently in real time. For those businesses that feel confident about their current capabilities, 39% attribute it to previous investments in infrastructure systems and software, and 30% attribute it to expanded internal computing capacity. Expanded computing capacity through outsourcing/cloud was also listed as an option, but the overall percentage of respondents choosing this option was less than the first two options, at 24%.
This focus on internal improvements was further supported by another question, which asked what companies have done or are doing to prepare for events such as a data surge (see Figure 6).We asked what steps they have taken around:
Flash-based SSDs can provider high performance with a much smaller footprint since a single SSD has the performance of dozens of conventional hard drives. When businesses are looking at overall costs, SSDs can provide high transaction level performance at a lower cost relative to hard drives (see Figure 8).
Businesses understand the value of their internal- and external-facing systems and the commitment to improving the performance for both. Survey respondents indicated that current spending between SOR and SOE is 53% and 47%, respectively, which demonstrates balanced priorities.
As well, companies place an equal importance on performance and reliability. Raw performance on its own is not sufficient since customers must have reliable services to avoid business disruptions. They must also have storage consistency to ensure data is not lost or corrupted in active and dynamic data center environments.
To meet the current and future performance demands of business stakeholders, partners, and customers, organizations should take the following steps:
From June 2014 to July 2014, Forrester fielded an online survey to 162 respondents, with 51% of respondents representing marketing and business roles (customer experience, customer service, and business analyst) and 49% coming from traditional IT (application development, enterprise architecture, and business process design). The respondents represented organizations with over 500 employees, and the survey had 20% representation from the healthcare, financial services, and retail vertical markets, respectively. Forrester also interviewed three business technology executives with knowledge of their firm's systems of record and engagement.
1 Source: “In The Age Of The Customer, Insight Isn't Enough,” Forrester Research, Inc., June 4, 2014.
2 Source: “Measure Workforce Experience Through Engagement, Productivity, And Customer Impact,” Forrester Research, Inc., May 7, 2013.