Systems of Intelligence Enable Digital Transformation & Differentiation

Systems of Intelligence Enable Digital Transformation & Differentiation

1. Systems of Intelligence Premise

Systems of Intelligence enable Digital Transformation and Digital Differentiation, which are survival imperatives for all business and governmental enterprises. In addition, Systems of Intelligence integrate existing Systems of Record (i.e., standard ERP systems) with real-time advanced analytics. Advanced hardware and software architectures are required to accelerate existing Systems of Record, and also accelerate/parallelize real-time advanced analytics. This strategy will deliver the fastest route to enabling Digital Transformation and Digital Differentiation.

2. Executive Summary

Digital Transformation and Digital Differentiation

Systems of Intelligence are key to implementing Digital Transformation and Digital Differentiation. Digital Transformation requires basic transformations of institutional and business processes that are “standard”. Digital Differentiation requires advanced transformation of key processes that enable significant and sustainable competitive advantage.

Systems of Intelligence need advanced IT technologies to integrate existing systems of record with real-time analytics. To implement Systems of Intelligence, enterprises need advanced IT technologies that have only become available recently. In addition, these technologies need to operate in concert wherever the data is created and stored, and minimize the movement of data between locations.

The first step in implementing Systems of Intelligence is to enable the current Systems of Record to operate more rapidly. The use of advanced technologies should improve the elapsed time of the core systems of record systems by 50% or more. This will create time (a “latency buffer”) for real-time advanced inference analytics to run.  These real-time inference analytics need  highly parallel systems with specialized processor technology like GPUs. The inference analytic programs are built from large scale analytic systems which are not real-time. One technique for building the inference engine is to develop analytic and artificial intelligence (AI) models, and then use machine learning to train and improve the model. This process can take weeks or months. The output of this development process is a real-time inference program which can be called via an API by the system of record.

2.1 Avoiding Conversions of Systems of Record

Some vendors and professionals argue that the current Systems of Record should be converted to a more modern platform. This may be possible for small companies or very small systems. However, converting large scale Systems of Record will bring years of delay and a very high risk of failure. Wikibon strongly believes that building on the application value of existing systems of record is quicker, less expensive, and less risky. CXOs should reject any Digital Transformation & Differentiation strategy that requires conversion of existing Systems of Record.

The new “UniGrid” type system architectures will improve the performance of almost all Systems of Record. UniGrid architectures are the name given to architectures that offload storage and the storage network components from the central processing unit. It allows direct, very low latency, any-to-any connection between any storage volume and any processor by the use of NVMe over Fabric (NVMe-oF) or equivalent technology to connect the system components. The processor, accelerators (e.g., GPUs), NVMe flash storage, and network components are attached to PCIe, with technologies such as Liqid allowing these PCIe devices to be composable. The number of components in a UniGrid can scale to be in the 1,000s, with true any-to-any interconnectivity.

UniGrid architectures will enable faster execution of real-time analytics and AI – reducing elapsed times sufficiently to allow time for real-time analytics to complete during the execution of the business transaction or process.  UniGrid architectures will also be the basis for any distributed cloud topology (See Wikibon UniGrid Research entitled “UniGrid 1: Digital Differentiation Requires Performance Infrastructure” for more details). This same technology will be the platform that also enables future increased operational automation, reduces security and extended downtime risks, and improves compliance with internal and governmental regulations.

2.2 Hybrid Cloud

The key operational processes of most large enterprises (and the data supporting them) are typically widely distributed across many locations. A distributed multi-cloud strategy is therefore required to enable Digital Transformation and Differentiation across an enterprise. The key imperative is to minimize moving large amounts of “heavy” data, and instead dynamically move the processing to the data. This interconnected multi-cloud strategy is only feasible and effective when there is a common hardware architecture and software stack in all of the clouds. These architected clouds need to be available both on-premises, in cloud vendor locations, and at the Edge. This allows maximum flexibility for placing processing and data dynamically, without having to manage and test different architectures in each cloud.

2.3 The Business Case for Systems of Intelligence

The business case for Systems of Intelligence is far superior to traditional data warehouses and big data applications operating separately from the Systems of Record.  This is because Systems of Intelligence focus on business process automation and reductions in business cycles times in real-time. Initially, the benefit of the Systems of Intelligence approach will be to “make room” for adding real-time analytics. The existing Systems of Record will run faster and at lower cost, with better utilization of compute, storage and network, and fewer software licenses. A more significant business benefit will be the systematic automation of “standard” business processes by providing advanced models and analytics, either from implementation by enterprise IT or from extensions to ISV applications.

The highest value benefit – and most  difficult to realize – will come from developing new ideas for digital differentiation providing sustainable long-term business value. If these ideas can be implemented, the rewards will be overwhelmingly valuable.  Wikibon expects that large enterprises that have established the infrastructure and operational foundation for the first two components (2.1 and 2.2 above) will be in a position to experiment and fail fast on new ideas for fundamental long-term differentiation.

2.4 Bottom Line

There is a strong initial business case for the first step towards Systems of Intelligence, based on faster Systems of Record performance. Over time, Systems of Intelligence will become the foundation for implementing sustainable strategic digital differentiation, with the ability to dramatically improve business innovation cycle-time. The potential benefits for enterprises will range from ensuring survival to overwhelming long-term business value.

2.5 Research Organization

The research and analysis of our premise is organized into three major parts:

  1. Designing Systems of Intelligence
  2. System of Intelligence in an tier-1 Oracle Environment
  3. The Business Case for the first step towards Systems of Intelligence

2.6 Scope of Research

This research focuses on Tier-1 applications requiring very high levels of performance, availability, security and recoverability. It assumes that current systems of record are using a Tier-1 Oracle database implementation. In addition, it assumes each cloud is implemented using hyper-converged principles. Wikibon refers to these hyper-converged clouds – whether on-premises or dedicated – as “True Private Clouds”. Each cloud in a multi-cloud topology is assumed to be identical in hardware architecture and software stack. The reference architecture assumed in this research is Oracle database cloud systems either on-premises (Oracle Cloud at Customer) or in an Oracle Cloud facility.  There are other viable database and system solutions that are available, and Wikibon will publish research on these later in 2018.

Dave Donatelli was interviewed recently on theCUBE addressing some of these issues. The clips are Donatelli discussing his keynote presentation on cloud strategies with John Furrier and Peter Burris.