Week-10 - Engineering and Data

Structure
‫كلية العلوم االدارية‬ |
‫والمالية‬

Chapter 9- Engineering
‫الجامعة السعودية االلكترونية‬
Chapter-10- Data
‫السعودية االلكترونية‬ ‫الجامعة‬

ECOM425 –Department of E-Commerce

26/12/2021
Learning Objectives – Chapter 9 - Engineering
• Engineering capability is key to how you create value for customers and your
ability to remain competitive through differentiation around product and service.

• Find and hire engineers to complement traditional technologists.

• Search and destroy any traditional technology silos.

• How can you be leveraging cloud‐based services in the context of the products
you are creating and the value streams within them?

• Shift to a microservices approach to improve your speed, quality, and flexibility.

• How will you leverage automation for testing, so that software can be updated
through continuous releases?
 Core competencies had to fulfill three criteria:
• Provide potential access to a wide variety of markets.
• Make a significant contribution to perceived customer benefits of the end
product.
• Be difficult for competitors to imitate.

Technology as a Cost Center to Technology as a Value‐driver

3
Technology can create value to the customer and real differentiation around a
company’s product and service.

Companies wanted to own and manage their technology infrastructure versus

outsource it to a third party to manage.

Leveraging technology to create value for customers, on the other hand, requires
a completely different set of considerations and orientation to how you think
about building it.
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 Spaghetti Tech: The Layers of Enterprise IT

Technology capability is key to how you create value for customers and your ability to
remain competitive.

Shifting technology from being primarily functional to value‐producing in established

businesses is challenging because part of the process involves navigating the spaghetti‐
like architecture that has been built over decades.

Legacy architecture takes this to a whole other level: the layers that exist include data,
hardware, software, and business processes.

Moore's Law
Technology teams are often large, hierarchical, and made up of individuals with deep
expertise in a particular hardware, software, or programming language.

Moore's Law predicted that the number of transistors on a microchip would double every
two years while the cost of computers would be cut in half in that same time.

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 FIGURE 9.1 Cost of computing FIGURE 9.2 Moore's Law – cost of storage

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 Legacy Technology

The technological skeletons of established companies include multiple architectures from point‐
to‐point connecting mainframes, services‐oriented architecture associated with middleware, to
the client‐server architectures built in the midst of the dot‐com days.

Many organizations that have changed their front‐end technology and have good apps but the
inventory management system, or pricing management, or property management system or
reservation systems for a hotel chain are the same old systems they have had forever.

This legacy technology jeopardizes the end‐to‐end process, which in turn risks negatively
impacting the experience customers have with the business.

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 The Impact of Product and Rise of Engineering

Digital companies aren't judged by the industries they disrupt but by their ability to use
digital to create new products, services, and markets. In order to do that, technology
could not just be a matter of delivering on an idea. Instead, digital companies hired
engineers who could apply the possibilities of technology to solve problems.

Clients making this shift face a number of hurdles along the way:

• How do I associate engineering transformation to business and/or customer value to

get sustained funding?
• How do I turn my legacy systems into value generators within my digital
transformation?
• How do I divert more of my legacy run spend to growth and transformation?
• I am running Agile events, but how do I achieve real engineering agility?
• How do I achieve speed to market without taking unnecessary risk with resilience and
stability?
• How do I generate value from the cloud instead of it being another data center?
• How do I connect modern engineering to customer‐centric value?
• How do I know all of the investment I have made in modern technologies and
techniques is working?
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Technology and Engineering

From an engineering perspective, creating a core competency in digital requires lenses

across three areas:

• Architecture
• Ways of working
• Talent

This means being able to effect change on front‐stage and back‐stage processes,
including internal operations, as seen in Figure 9.3.

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 FIGURE 9.3 End‐to‐end transformation

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 Architecture: Cloud

Cloud is a key design component for how you create flexibility and agility within your
systems architecture.

Digital business transformation cannot be done through technology alone. To create value
requires an approach where all capabilities are working continuously in concert.

Three main types of cloud service: Infrastructure as a Service (IaaS), Platform as a Service (PaaS),
and Software as a Service (SaaS).

• IaaS offers on‐demand access to help scale hardware, things like networking, storage, and
servers.
• PaaS gives you a cloud‐based environment for testing and development where you can
develop, manage, and host applications.
• Finally, SaaS gives you access to cloud‐based software that you can access independently via
the web or application programming interface (API) into your existing architecture.

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 Contn…

• Private cloud allows companies to host on their own data center and manage it
themselves. Think of this as creating your own intranet with your cloud architecture
protected by your own firewall and security.

• Public cloud is the opposite, where you are given access to the provider's
environment and they manage the environment, infrastructure, and security for you.

• Hybrid is just that: a mix between the two where you determine what aspects of your
environment you want to be public or private and determine the associated security
and APIs to make the architecture work.

Application of cloud will evolve over time based on the needs of your customers and
business, the value streams you are activating, and the growth you seek to achieve.

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 Microservices
Microservices is an architectural approach to building applications that partitions apps into
services that can be built, tested, and updated independently of other services supporting the
application.

Low Code/No Code

Low code is a type of application that helps professional developers develop applications with
little hand‐coding, essentially streamlining their work and helping accelerate the development
process.

Engineers
Engineers follow a different profile than traditional technologists. They are polyglots, traversing
multiple languages. The role they play is in identifying and activating what's possible through
technology and testing and refining based on the needs of the customer.

Automation
Continuous development requires continuous feedback loops. Software is updated through
continuous releases. As the pace of development and releases accelerates, automation will play a
key role in producing value with speed and quality.
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 Learning Objectives –Chapter10 - Data

• To Develop a data strategy, and the capability to serve it, that puts data
to work to drive a better customer experience, innovate new products
and services, and run your operations more effectively.

• Challenge your organization to be data‐driven operationally and

recognize how that increases your ability to move with speed and
quality to create value.

• Ensure that your experience and product capabilities are in service to

your data capability, as well as vice versa.

• When it comes to data and ethics: It's not just what's legal, but what's
ethical.
 Data as an Asset

• Disney's intangible assets in Q1 of 2020 were $100 billion alone. Its other major
assets are vast content libraries, the Marvel catalogue, theme parks, studios, media
networks, and their own streaming platform Disney+.
• Netflix's major assets include some original content rights but are primarily its
streaming platform and superior understanding of the customer.

• Disney+ and Netflix success will depend on its ability to use data, experience, and a
strong catalogue of content to retain those customers.

Getting Started with Data

• A data capability powered by AI and machine learning can actually make decisions,
increasing the speed.
• Frees your teams up to focus on the next level of decisions that will drive more value
from identifying adjacencies and new offerings.

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 Case Study: Netflix

Netflix has now successfully expanded into original film and TV series. By the end of
2019, it had become the largest movie studio in Hollywood based on volume, doubling
and in some cases tripling the output of its competitors.5 The company’s 2020 content
budget was $18 billion, of which 50% was allocated to developing its own content. In a
year when many studios and networks were postponing content creation due to the
coronavirus pandemic, Netflix had already shot its 2020 slate of series and films and
was working on the 2021 season.

In July of 2020 alone, it introduced 59 original pieces of content from popular TV shows
to new series, movies, documentaries, and anime.6 Because it was not beholden to
the studios for content, Netflix was also free from the constraints of release schedules,
and the model has the agility to meet the unique needs of a streaming audience.
Ultimately, the content feeds back into a system that uses data, AI, and machine
learning to further develop an experience, products, and services that meet the needs
of subscribers.
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 Customer Experience and Growth:

• How could we “own” and holistically understand our consumers and start to get a
handle on first‐party consumer data?
• How can we stay more relevant in the eyes of our customers than our competitors?
• How can we effectively use our data to reach our customers and improve our
experience?
• How can we personalize an interaction for a customer based on historical data?
• How can we harness the data we already have (and all the new data coming in from
digital consumers) to drive growth?
• How can we access and provide real‐time data on health and safety to our
customers?

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 Efficient Operations:
• How do we harness our fulfillment data to improve efficiencies and spur innovation
but fuel customer experience?
• How do we harness data to better manage everything from product assortments,
business operations to consumer loyalty – and drive growth?
• How can we monetize our data while respecting customer privacy?
Four lenses that can be applied across any aspect of business
• Utility: How do you get useful data and analytics on the right audience (data sets and
data architecture)?
• Data Science and Artificial Intelligence: How do you manage your data and create a
closed loop system of automated learning and decision making?
• Designing for Data: How do you design your products, services, and experiences to
collect data?
• Ethics: How does becoming data‐led impact your ethical responsibility?

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 Utility: How Do You Get Useful Data on the Right Audience?
• This ability to create data that can be accessed to optimize multiple business
functions and offerings is the holy grail for many of our clients.
• All industries are looking for ways to use data to drive a better customer experience,
innovate new products and services, and run their operations more effectively.

The components that shape any company's data strategy are the data sets, data
architecture, and data science and AI that exist in its environment.
• Data sets (Do You Have the Data You Need to Understand Your Business and
Customers?) give you a view into the data that currently exists in your business and
the data you need to acquire to understand your target audience or business process.
• Data architecture (Is the Data in a Format and Structure That Are Accessible?)is the
systems and processes used to govern the types of data you collect, how it's used,
stored, managed, and integrated.
• Data science and AI create the algorithms that enable you to generate insights from
your data and the computational ability to automate and evolve those insights.

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 Data Science and Artificial Intelligence

How do you manage your data and create a closed‐loop system, so your data
capability is helping your business learn and make decisions in real time?

The methods and tools those humans apply to preparing the data and designing the
algorithms for AI will continue to evolve. Because of the proliferation of data and the
steady increase in computational power, these algorithms can now be effectively
applied to massive data sets and automated through machine learning.

The application of AI and machine learning can then enable your machines to act, make
decisions, and learn. When you create this generative loop, where each capability
reinforces the other, it allows your organization to move within your existing
parameters at speed.

The automation and AI gives the strategic inputs and frees up your teams to start
exploring adjacencies and potential partnership opportunities to develop new products
and services.
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 Designing for Data: How Do You Design Your Products, Services, and
Experiences to Collect Data?

Product should connect your data and experience capabilities to ensure data
collection is part of the design process so that you can create a mechanism to
continue to feed your algorithms with more information. This creates a generative
loop across your business that allows for constant learning and iteration.

Ethics: How Does Becoming Data‐led Impact Your Ethical

Responsibility?
The complexity of creating ethical standards across a global environment is infinitely
complex.
When designing the products, services, and experiences for data, use a few simple
principles to guide how we ensure we are doing so with an ethical lens:

• Be clear about the value you provide the customer in exchange for their data.
• Include data in your design so the customer can give you the data easily.
• The data should only be used for the purpose the customer has agreed to – trust is
everything.
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