It’s Friday. And that means, it’s time for Friday 5×5. Friday 5×5 is our weekly blog post featuring diverse perspectives from RE:INVENTION’s Leadership team about a controversial news article or research report.
UP THIS WEEK: THE DELUGE OF BIG DATA
Should companies be thankful for Big Data? Big Data can provide unprecedented amounts of information on consumer behavior, likely eliminating the needs of companies to use focus groups. However, many companies are struggling to use Big Data effectively. And from consumers’ perspectives, Big Data comes with the threat of infringing on privacy. In this week’s discussion, the RE:INVENTION team assesses the pros and cons that come with the implementation of Big Data.
This Week’s Reference Articles:
- “The Ethics of Big Data,” Venture Beat, 11/18/2013
- “The Challenge of Harnessing Big Data,” Yahoo Finance (video)
THIS WEEK’S QUESTION
What are the pros and cons of big data for today’s business leaders?
OUR TEAM’S RESPONSES
Kirsten Osolind (“Change Catalyst”)
Data is “the next frontier for innovation.” Everybody says so, including McKinsey & Company. “Effective use of big data can increase a company’s return on investment by 10-20%,” McKinsey has declared. Big data leaders have 5% higher productivity and 6% higher profits than their competitors. For the rest of us, achieving Big Data payoffs can be vexing.
In fact, if your company doesn’t have deep pockets like Google or Facebook and tons of dedicated data analysts and engineers on staff, mining business answers from Big Data can be a backbreaker. Many — dare I say most — small to midsize companies have yet to put big data to the test in an actual business use case.
And there’s the rub. Huge data sets are useless unless they provide actionable insights. For companies to generate value from Big Data, they need to connect data sets to insights to action in a fast, repeatable way.
The secret to better Big Data ROI? Data visualization.
Yes, some folks find numbers “sexy“, but most people think visually. Data visualization creates the narrative that companies need to harness Big Data for high impact. Data visualization can help your company see patterns, discover inconsistencies, and find answers to questions you never thought to ask. What you “don’t know that you don’t know.”
According to a recent IDG Research study:
- 98% of companies that are most effective at Big Data analysis have data visualization solutions in place.
- Among companies that are “not very” or “not at all” effective at Big Data analysis, only 16% have implemented a data visualization solution and one-third have no plans to do so.
Good data visualization requires more than eye-catching graphics. Here are six helpful tips:
- Tell a story — help viewers understand and make sense of the information.
- Know your audience — ask yourself what they already know, what their preconceived biases will be, and how they will interpret the new information.
- KISS if you can — simple is usually best, but realize that sometimes complex datasets require complex visualizations.
- Pick the right tool(s) for your data — let your questions guide your choice of data visualization tools.
- Consider hiring a vendor/service partner. No hard sell here on RE:INVENTION’s services. My point is simply that hiring experienced Big Data consultants — preferably those who are skilled in design thinking — can shorten your learning curve as your company nurtures your own Big Data prowess.
- Interactive maps are cool — in fairness, this is just my humble (and perhaps biased) opinion.
When it comes to privacy, research suggests that most people will willingly share their personal information in exchange for benefits (discounts and perks). Safeguarding that data is the onus of ethical companies.
Want some good reading materials on data visualization? I’m a HUGE FAN of Visualize This: The Flowing Data Guide to Design, Visualization, and Statistics (Wiley) written by author Nathan Yau, (aka FlowingData blogger).
Joe Barrus (“The Technologist”)
Big Data is the latest buzzword/trend businesses are being told they must adopt. We are in the middle of the hype cycle where Big Data is heavily marketed and sold but whose benefits; implementation and application are not clearly understood or agreed upon by both suppliers and consumers.
But like all new technologies and movements, there is basic value that will come to rest for the duration. Big Data is here to stay. In fact it will become a necessary tool for business survival and well integrated into business strategy and operational processes going into the future.
The prima facie value is big data’s ability to gain insight into behaviors, needs and desires of different demographics through the technology’s ability to recognize patterns that exist in volumes of data. By leveraging these patterns, businesses can get closer to providing consumers with more personalized products and services at economic scale. This will give companies better capability to differentiate and compete within niche markets. Economically, it is a knowledge creation machine that will help optimize products and services that will benefit consumers.
But probably the greater value for Big Data is its ability to crunch volumes of data to reach accurate decisions quicker. As we move into the future, we are seeing accelerating technological change. This only serves to reduce the windows of opportunity to capitalize on new products and services. Big Data gives companies the ability to predict future demand and make key strategic and tactical business decisions quicker than has been with traditional business analysis activities. This speed to action will become a core capability all companies will need to develop in order to survive in today’s fast changing markets. There are plenty of examples of where slow and inaccurate decision making has imposed significant harm on businesses profitability and survival.
Outside of markets, Big Data has the ability to enable and bring forth significant social change. Big Data will become a core technology that will help with social planning, improving healthcare outcomes, reducing environmental risk, providing security, etc.
But all this does not come without risk. The negative implications are reduced privacy and potential for abuse. But all improvements come with tradeoffs; we just need to decide as a society what we are willing to trade for those improvements. I happen to like it when Amazon recommends products to me based on what others who were shopping in similar contexts bought. But I also know that would not be possible if our shopping behavior was not stored and used as a source to produce those recommendations. But because I’m confident that no one (at any level of significance) is examining my personal data with a critical eye but rather machines are objectively looking at patterns to improve my experiences, I’m ok with that. We’ve always made these tradeoffs in the past on a smaller scale when we answer surveys and fill out personal profiles, etc. It’s just that nowadays; this is done at a much greater scale.
However, this greater scale is exactly what increases the risk of abuse if this data falls into nefarious hands. If this data falls into the hands of criminals or unscrupulous government officials, it does present a real risk. This is why it is important as a society to not become complacent as Big Data becomes more ubiquitous. We need to understand the potential for abuse and set appropriate limitations and exert strong governance processes to manage and enforce it. Any technology can be abused. One can use a telephone to make bomb threats, but that doesn’t mean we need to ban telephones. But we do need to make sure that abuse of these technologies are addressed and enforced.
Big Data is here to stay and I believe its positives outweigh its negatives overall as it will have significant positive impact on future society as long as we pay attention to what we are doing.
Dennis Jarvis (“The Marketeer”)
What is Big Data? If it is quite simply (although there is nothing simple about Big Data design and management) the harnessing of vast amounts of information to provide the public with better products, services and conveniences to meet individual needs and improve lives, it sounds quite desirable. If we put Big Data in the context of “it is not just what you know, it’s what you know about whom,” it seems to take-on a darker side, almost something out of the analogs of Wikileaks, with concerning ethical, perhaps legal concerns.
To me, Big Data parallels genome research. Genome research has opened-up the mother lode of life saving and changing medical options. We are now gaining access into the very causes of disease and potential solutions for prevention. Genome research has also caused rift in sectors of society over ethics and morals, almost akin to what surfaced with the publishing of Aldous Huxley’s novel, Brave New World. However, the advances to-date and portending for the future have far outweighed any downside, in my opinion.
Big Data has been progressing for many decades. Even in the early analog days of data collection, there was concern about confidentiality. The digital age has mushroomed this. I remember my feeling of confidence employing G.I.S. (Geodemographic Information Science) systems to identify micro-marketing opportunities, and even with these technologies there were confidentiality concerns, albeit nowhere near what has been raised about Big Data. How far we have come. I think Big Data holds more promise than concern. Nonetheless, as with anything in society, we will encounter individual acts that will raise alarm. But, I believe these will be in the minority and we cannot allow the 2% to drive the 98%.
In business, science and government, the role and governance of Big Data needs to be set at the very top with a strong vision. Big Data requires organizational leaders to set the culture, agenda and rules, and to be held accountable by their constituencies and customers.
Jorge Barba (“The Culture Guy”)
With great power comes great responsibility. So companies should first feel more responsible, not thankful. I don’t think most company executives are in that state of mind though.
Anyhow, I believe invasion of privacy will become the norm, and most won’t even notice when that happens. The problem, from a consumer’s point of view, is that most everything we use is now connected to a larger network of things. At some point, everything will be connected. This is the data that has unprecedented value for companies who are competing a consumer’s attention because, well, it’s never been there before.
But for companies, this creates a headache because they have more dots to connect that could potentially provide more meaning. Still, the challenge is to make sense of it all. It is very easy to take the data as a leading indicator of future behavior. Data won’t replace intuition, but enhance it. But to see its full potential, both for the consumer and the business, companies must be human oriented to make sense of it all.
The point: don’t put an economist or IT person in front of the data. Put an anthropologist, a psychologist, a designer, anybody who looks beyond the numbers by going outside the building and having contact with the market.
Kane (“K-9 Intern”)
Humans have plenty of data. It’s time to analyze us dogs. Three big woofs for Big Data startup company, Whistle. Whistle helps pet owners spot early signs that their dog is sick using Big Data. Their wearable Whistle Tracker measures your dog’s activity levels during walks, play, and rest. Works great for me when I hit the gym for yoga.
THE FINAL WORD
Big Data is here to stay. It is in any company’s best interest to embrace it and use it to better understand and predict their customers’ behaviors. At RE:INVENTION, our team of change agents weed through big data, provide actionable business insights, design customized business intelligence tools, and ultimately commercialize products and build markets for Clients. Our goal is to help our Clients make better informed decisions, reinventing the way that they do business. LEARN MORE about our Services.