EXPERT VIEW Harvard Business School's Thomas H. Davenport urges British business to seize the opportunity big data presents to surge ahead of competitors
Big data and associated analytics promise to change virtually every industry and business function over the next decade. Any organisation that gets started early with big data can gain a significant competitive edge.
Just as early analytical initiatives in the "small data" era, including Tesco's loyalty analytics on ClubCard, Capital One Bank's thousands of experiments and Progressive Insurance's use of credit scores to predict car insurance claim levels, allowed these firms to move ahead of their competitors and build a sizable competitive edge, the time is now for firms to seize the big data opportunity.
Most of the current big data activity is taking place in startups or online companies. However, the widespread surfeit of data means that virtually every business or organisational activity can be viewed as a big data problem or initiative.
If you're a manufacturing executive, you need to be thinking about how to optimise production and maintenance based on all the data your computer-based machines and sensors are throwing off. If you're a marketing manager, you need to be working on how to integrate and make sense of the data from myriad customer touchpoints and clickstreams.
Even human resource chiefs aren't off the big data hook. Most large organisations now have voluminous data on the attributes and performance of each employee, and it's time to start identifying the factors that make for successful employees and managers. Google, for example, has been doing this for almost a decade.
Organisations that want to pursue big data opportunities need to begin working along several fronts. From a technology standpoint, they need to acquire and develop tools to manage both structured and unstructured data in massively parallel server environments, either on their premises or in the cloud. They need to select analytical software to make sense of the data.
But, perhaps most importantly, organisations need to hire or develop the human talent to manage and analyse big data. These people are typically known as "data scientists" - a hybrid of scientist, hacker and quantitative analyst - and they are currently in extremely short supply. The wise executive will develop approaches now to hiring or developing the best people, and this is not a role for technologists. The most successful data scientists tend to work in areas close to an organisation's key products and processes, rather than in IT functions.
Some companies are beginning to realise the extent of the opportunity and to act upon it now. GE, for example, has committed to spend more than $1.5 billion to develop its Global Software and Analytics Center in the San Francisco Bay Area as a part of its Global Research organisation. The company plans to hire at least 400 computer and data scientists at this location, and has already hired 180.
Globally, GE has more than 10,000 engineers engaged in developing software and analytics products and services, and their efforts will be co-ordinated by San Francisco through common analytics platforms, training and leadership education, and innovative offerings. A significant portion of big data activities at GE will be focused on industrial products, such as locomotives, turbines, jet engines, and large energy generation facilities.
Every company has big data in its future and every company will eventually be in the data business. Every senior manager has opportunities to employ big data. If you avoid this new development, you have nothing to lose but your customers and your business.
This article orginally appeared in a special report on Managing Big Data produced by Raconteur Media and published with The Times (UK). For further content by Raconteur Media please see our new content site here.Suggest a correction