Most industries have been disrupted, or are in the process of being disrupted, by accelerating changes in their markets. Shifting consumer behaviors, enabled in part by digital technologies and the Internet of Things, are the prime movers of the headwinds many companies now face. Enormous amounts of new data are being generated and coming online every day, that presents the opportunity to do something differently and move the needle on business performance.
Another force of change, however, are the companies leading the way in Big Data. These companies are illustrating how analytics and new insights can not only differentiate you from the competition, but in some cases crush the competition. For everyone else, this march of progress is creating urgency to act quickly.
Amid all of this, what many companies are experiencing is a gap between their investments in the underlying technologies of Big Data, and the anticipated benefits. The macro trends across many industries around challenged sales growth, margins, and consumer loyalty reflect this reality.
The gap looks a bit differently between companies at the bleeding edge of adoption and those just beginning their journeys. Yet there is one thing in common between the two: wide-ranging views on what Big Data represents in terms of value creation and how it fits within the organization.
CEOs and their leadership teams have enough to worry about and focus on, without getting into the weeds of Big Data technologies. However, I do believe business executives have a mandate to understand at the level I describe here how their companies view Big Data through the lens of strategic, competitive differentiation.
Data as an asset
Gartner Group describes how companies have the capacity to value data as a financial asset or instrument, with data being accounted for on the balance sheet like a physical asset. Even if you do not literally approach your data in this manner, consider this: When retailer Radio Shack filed for bankruptcy recently, the big news was that Amazon would acquire their store locations to greatly expand local pick-up and delivery service. In the end, the bankruptcy court found Radio Shack’s most valued asset to be its customer data.
Had Radio Shack better recognized the value of its decades of accrued consumer insights to understand changing consumer buying preferences and adapt their business model accordingly, could they have avoided bankruptcy?
Big Data company leaders
Some companies are creating new roles, such as Chief Digital Officer, Chief Data Officer, or Chief Analytics Officer, to own Big Data strategy. Many have yet to appoint such an executive, and are instead assembling a proxy for the role: some combination of the CIO, CMO, CFO or COO, an Analytics Leader and line of business leaders. Whichever model your company employs, it’s important to know that Big Data is a multi-dimensional value driver.
Big Data is not a functional application, or a single enabling technology for one silo of your business. The difference with Big Data is that it represents ways for individual areas of your business to improve with new insight, based on an understanding of all the possible data available to the company – across silos, and even extending outside the company to the dozens, if not hundreds, of vendors working on behalf of line of business managers. It’s when analytics are applied to this diversity of data that new insights can direct new decisions among functional areas of the business.
Line of business managers
The implication of the above directly reflects the experiences of progressive adopters of Big Data analytics as well as those less mature. Companies I have spoken with, at the bleeding edge of data science, are finding the #1 inhibitor to Big Data value is having more line of business managers recognize the opportunity.
Data science and advanced analytics talent is in high demand, with a scarce supply as widely reported. Irrespective of the hiring and retention challenges, however, the lesson is that we must remember: most managers, in most companies, still make most decisions by gut feel based on inaccurate or incomplete information. That’s the data driven gap that companies are desperately trying to close with Big Data, no matter their maturity.
Therefore, you must also remember that Big Data value is as much a function of culture and mindset, as technology. You want managers interested and engaged in making data driven decisions.
At a Gartner conference recently in Chicago, a large roster of companies succeeding with Big Data was cited. The session also mentioned what Gartner was seeing among these companies: a bifurcation of IT, into an “I” organization for information analytics and a “T” group to manage technology.
A singular group could not easily balance the needs to operate technology at the lowest cost, while simultaneously helping the business unleash the value of Big Data analytics. Gartner’s view reflects the moves many companies have made to develop new departments outside of IT for Data Science and Advanced Analytics.
Gartner also found that the same division would not occur with the underlying technologies supporting both “I” and “T.” A single concept, methodology or platform should account for the needs of both your day-to-day business performance reporting that IT manages, as well as the needs of analytics professionals who need a productive environment to explore, model and deploy new insights back into the business for managers and systems execute and measure. The underlying data is therefore available to both, and a single approach also offers the most efficient and cost effective solution versus maintaining separate and loosely coupled technologies.
Even if this is a very nascent idea, I think it’s predictive of what we will see happening within the next 36 months in many industries. It’s reflective also of the moves many companies have made to develop new departments focused on analytics apart from IT.
Struggles with fundamentals
Many companies report struggles with fundamental problems such as daily business performance reports. Your IT organization is likely the provider of this internal service, and likewise struggles meeting business manager needs, let alone appreciating the decisions on which the information depends. This constant push and pull is the rallying cry behind more IT collaboration with the business. It’s also why many business managers have become conditioned to rely more on their intuition for making decisions, and less on data driven insight. Frankly, many business managers do not believe their IT organizations can be relied upon.
Many companies see Big Data innovations as a way of leapfrogging these problems by giving even more technology and data access to business users. There is considerable innovation happening here, with new ways for an average business person to tap into new insights offered by many data sources. However, I would argue that this alone is insufficient.
Paint a vision
Old economy companies not born online have unique challenges from those literally built on Big Data (think LinkedIn and Yahoo, for example). The ones experiencing success start with the end in mind.
Your ideal state is one in which business managers leverage data to make better decisions, your organization is realizing the value of data and analytics as differentiators, and functions collaborate with one another based upon the new insights offered when you can leverage all available data sources to fuel a data driven business. That sums up the strategies being pitched by technology and consulting providers alike – a roadmap, journey, or vision.
Avoiding analysis paralysis
Today, some of these activities happen in your company, some do not. For many companies, there are dozens of technology and consulting providers involved. So how, as an executive, do you even consider a roadmap when the existing environment is so complex? You don’t have three years to implement a strategy; you want to act in 90 days or less.
Your teams have the opportunity right now to rapidly spin up projects leveraging cloud technologies to deliver value today. The key is identifying the areas within your business to focus on first. Understanding how well your company meets the needs of its customers, and how this can be improved, is a good place to begin.
For managers to believe in the value of data driven decision making, they must see it for themselves first and the process must unfold quickly – which is what cloud computing represents. People’s attention spans and personal agendas simply will not accommodate the typical timelines associated with traditional technology projects.
Doing this well with an initial set of internal champions creates positive chatter and momentum for others to engage in the process. This is how you overcome the challenge that progressive adopters of Big Data analytics are experiencing with a deficit of data driven managers.
The leaders in your company carrying the Big Data torch should proceed along these lines. You want your leaders to drive to an integrated vision for data and analytics, which leads to more managers adopting and championing data driven decision making that materially improves the performance of your business.
(About the author: Gib Bassett is a consumer goods and retail industry principal at Oracle Corp.)
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