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Ideas for Leaders #115

Extracting Value from Big Data

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Key Concept

New technologies allowing the sophisticated analysis of vast amounts of data, Big Data, can bring competitive advantages. A growing group of pioneers is achieving breakthrough business outcomes. Many organizations are in the early stages of Big Data activities. To extract value they need skills, technology and an information foundation capable of handling high volumes and velocity of data. 

Idea Summary

To compete in a globally-integrated economy, it is increasingly clear that organizations need a comprehensive understanding of markets, customers, products, regulations, competitors, suppliers, employees and more. This understanding demands the effective use of information and analytics – the Big Data challenge. Next to their employees, many companies consider information to be their most valuable and differentiated asset. With the emergence and expanding adoption of Big Data, organizations worldwide are discovering entirely new ways to compete and win. Big Data, if well managed and distributed can powerfully improve decision making, specifically enabling:

  • Smarter decisions: leverage new data sources to improve the quality of decision making;
  • Faster decisions: Enable more real-time data capture and analysis to support decision making;
  • Decisions that make a difference: Focus data efforts towards areas that provide true differentiation.

This study identified that only a comparatively small group of pioneering organizations is effectively accomplishing this by arming employees from the C-suite –from marketing –from the shop floor with the information, skills and tools required to make better and timelier decisions at the ‘point of impact’.

What is big data?
This is much discussed but ill defined. It can mean managed data streams from social media, analytic tools, real-time data, next generation data, to huge quantities of data from non-traditional sources and much more.
As overly complex models of reality are a hard sell in companies, data and analytics have traditionally seen low effective usage in companies. This attitude needs to change if they are now to harness the power of Big Data. The promise of achieving significant, measurable business value from big data can only be realized if organizations put into place an information foundation that supports the rapidly growing volume, variety and velocity of data. (Figure 2)

The most effective big data solutions identify business requirements first, and then tailor the infrastructure, data sources and analytics to support the business opportunity. These organizations extract new insights from existing and newly available internal sources of information, define a big data technology strategy and then incrementally upgrade their infrastructures accordingly over time. (Figure 5)

The study findings led to five key recommendations for organizations to progress their big data efforts and seek the greatest business value from big data:

  • Commit initial efforts to customer-centric outcomes: areas that can provide the most value to business;
  • Develop an enterprise wide big data blueprint to guide the organization through a pragmatic approach to develop and implement its big data solutions in ways that create sustainable business value;
  • Start with existing data to achieve near-term results while building momentum to sustain a big data program;
  • Build analytics capabilities based on business priorities: there is a growing variety of analytic tools but a shortage of analytical skills;
  • Create a business case based on measurable outcomes.

Methodology:  IBM in collaboration with Said Business School explored through a Survey conducted with 1144 professionals from 95 countries what big data means within a large organization and what these organizations are doing with data. (Figure 3)

67% of respondents reported that the use of breakthrough data is creating competitive advantage for their organization.

Business Application

To ensure that Big Data maximises its potential in the organization it needs to be carefully managed. Three measures identified by the researchers as helping to drive its success were:

  • Sponsorship and Collaboration: Business and IT professional collaborating together and key business executive such as CFO, CEO driving the business case.
  • Quantification: Define a quantifiable business case, projected returns on investment, defined success criteria, metrics, define the strategy and roadmap taking into consideration existing data, technology and skills, and how to build a plan aligned to the organizations business strategy.
  • Professional Development: Attention to the professional development and career progression of in house analysts, who are already familiar with the organizations business process and challenges, should be a top priority for business executives.
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Authors

Institutions

Source

Idea conceived

  • 2012

Idea posted

  • April 2013

DOI number

10.13007/115

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