Recently, we at Enterprise Knowledge have been talking a lot about Semantic Layers, defining what they are, and even what they aren’t. We’ve detailed the various technical components and the business value of each, presented logical diagrams, and identified many core use cases for which they may be applied. We continue to generate a depth of detail on the topic, and when I consider many of our clients, CEOs and top executives of some of the world’s largest companies, I want to make sure we’re adequately answering the question of why a senior executive should care about a Semantic Layer.
To answer that question succinctly, a Semantic Layer can be an organization’s pathway to achieving Artificial Intelligence. A properly implemented Semantic Layer delivers the quality inputs, the relationships and vocabularies, and the necessary connections and infrastructure to make AI real for most organizations. If AI initiatives have failed or are stalled, implementing a Semantic Layer will deliver all the necessary elements to make AI successful at your organization.
To further answer the question, I explored the top concerns of global CEOs from The Conference Board, effectively, what CEOs are losing sleep over. These are listed below, with specific examples of how a Semantic Layer can help to address each of these challenges.
Economic Downturn/Recession
A Semantic Layer can deliver a comprehensive, aligned, and integrated view of an organization’s operations. Regardless of the industry, this means an executive will have the ability to understand bottlenecks, spot inefficiencies, and even predict areas of savings. This translates to better decision-making and meaningful competitive advantage. One of our customers in the publishing and education industries had previously lacked the ability to look all the way across their diverse organization’s operations. They didn’t even have a consistent definition of core business concepts like what a product is, and therefore had no ability to understand profit and loss on a product by product basis. The next two quarters following the implementation of their Search and Intelligent Chatbot (powered by the Semantic Layer), they achieved a marked increase in margin as the company refocused sales efforts around their highest profitability products. More importantly, they attained a framework that allows them to evaluate, in real-time, which products are the most profitable.
Inflation
As I mentioned above, a complete view of an organization’s operations will enable executives to spot hidden or unrealized costs and proactively make decisions to remove or shift those costs to keep operating costs lower. A Semantic Layer can also be used to counteract the impacts of inflation. Most customized customer services powered by a Semantic Layer can be used to retain customers even when they’re more cost conscious due to inflation. Similarly, with properly targeted and customized marketing, down to the individual level, organizations can more successfully win new customers, regardless of market conditions.
Global Political Instability
A Semantic Layer cannot prevent Global Political Instability (at least, not yet). However, it can help an organization predict where global politics may impact business, either from a market or supply perspective, helping executives to shift operations proactively. We did something like this for a global development bank. For them, we developed a knowledge graph as a component to their semantic layer (they dubbed it “the brain”) that identified trends between all of their global development projects, the countries and regions in which they were run, and recommended lessons learned to prevent repeats of the same mistakes or errors on future initiatives that might encounter the same issues. A Semantic Layer can use machine learning to help identify trends a human might not see, flagging the trends for executives to make these proactive decisions before they impact business.
Higher Borrowing Costs
Though it can’t control bank interest rates, a Semantic Layer can serve as a cost reduction tool in many ways, ranging from improved productivity, to identification of inefficiencies, even automatically identifying unnecessary redundancies in various stages of the supply chain. For one of our clients, we applied a Semantic Layer to map their “cradle to grave” operations, helping them to cut out unnecessary steps that were slowing down their operations. It not only saved them money, but reduced their production cycle and time to market by nearly ten percent.
Labor Shortages
When applied against employee onboarding, learning, development, and performance, a Semantic Layer can be a critical tool in developing and retaining employees, helping to alleviate potential labor shortages. A Semantic Layer can serve as a map of employees, skills, and tenure that allows executives to identify current and future labor shortages and focus training and recruiting efforts on the most important skills. For one services company, we incorporated the organization’s products, services, customers, and sales pipeline into the Semantic Layer, providing the organization’s executives with predictions of where they may have future labor shortages based on their employee demographics and sales pipeline, allowing them to proactively fill gaps through training or hiring before they even existed.
Rapidly Advancing AI Technology
A Semantic Layer can be an organization’s pathway to achieving Artificial Intelligence. If a CEO is losing sleep over how their organization can harness the power of AI, before getting left behind, a Semantic Layer is their answer. Given that the biggest hurdle for enterprise AI adoption is the lack of a comprehensive understanding of organization’s data and the black box nature of how most AI solutions are trained, a Semantic Layer plays a crucial role in providing a bridge between the complex underlying data and the end-users or AI applications. Specifically, by aggregating heterogeneous data and aligning business terminologies across various departments, we were able to employ components of Semantic Layer for a large financial institution to train complex AI algorithms based on their risk and controls library and management processes resulting in an approximately 80% improved accuracy of their risk identification process and alignment of relevant mitigation strategies.
Higher Labor Costs
To expand on the point I made regarding labor shortages, a Semantic Layer can be a key tool in employee retention. Greater employee retention means lower costs related to recruiting and (re)training new employees, thereby helping to decrease overall labor costs. Another significant cost regarding labor is transfer of skills and knowledge from an organization’s most tenured and experienced resources to those who are new to an organization. An AI chatbot based on a Semantic Layer can help organizations get reliable answers to less experienced employees so that they can provide value more quickly. For a federal research institute with a retiring workforce, we leveraged the Semantic Layer to automate the identification of tenured experts (from project data leveraging taxonomies/metadata) and capture high value knowledge from their most experienced employees, then further used additional components of the the Semantic Layer and AI to automatically deliver that knowledge to new employees at their point of need. This not only improved employee development, it resulted in greater organizational efficiency and safety.
Regulation
A Semantic Layer can help an organization to stay up-to-date on all regulations and laws, ensuring they are compliant at the national, regional, and local levels. Moreover, especially regarding data privacy, security, and information delivery, a Semantic Layer can be a key tool to ensure an organization follows each regulation and is fully compliant. One large organization that deals with a myriad of individually identifiable health information (IIHI), came to EK after incurring a massive fine for the improper management of this information. We developed a Semantic Layer for them, which not only helped them achieve compliance, but also helped them spot ancillary systems with risky information management practices that needed to be secured.
Global Financial Crisis
Each of the points I’ve already made have demonstrated how an organization can be more prepared for a global financial crisis, by having a complete understanding of their supply chain, a greater mastery of costs and redundancies, and a predictive view of their market and employee needs. An organization that has harnessed a Semantic Layer won’t be impervious to a financial crisis, but they’ll be more prepared for it, more able to adjust to it, and quicker to respond when emergencies arise.
Shifting Consumer/Customer Buying Behaviors
A Semantic Layer isn’t just about understanding your organization, it’s also about connecting data about customer behavior and understanding your customers and clients and delivering fully customized experiences and communications for them. Buying behaviors will always shift, but the organizations leveraging a Semantic Layer connecting knowledge and data assets across sales, marketing, and customer service will have greater intelligence and awareness around these shifts, meaning they’ll be ready for the shifts and more likely to retain or even expand their customer base while their competitors are left wondering what’s happening. For a large retail customer, we helped them build a graph of their customers and their buying habits, then matched individually assembled communications and offerings to them using the Semantic Layer, resulting in improved engagement and sales, including new engagement from previously dormant customers.
Conclusion
From the view of the CEO, a Semantic Layer, put simply, is about enterprise intelligence. Rather than piecing together answers from disparate systems, wasting time commissioning costly and time intensive research efforts, and taking a “best guess” approach, organization’s armed with a Semantic Layer will have the ability to get the right answers when they need them (or before), respond in advance to rapidly changing factors, and operate not just with Artificial Intelligence on their side, but with Organizational Intelligence.
If you’re ready to sleep better at night by harnessing the power of a Semantic Layer, let us know. This is not wishful thinking of the future – this is what we can, and have, achieved today.