Everyone is talking about “Big Data”. Recently, it is a term that is seen everywhere to describe exponential growth, availability, and use of information both structured and non-structured. Perhaps, it can be as simply defined as any amount of data your organization cannot harvest and effectively use with the tools it currently has available.
Big Data” is a term that’s everywhere. For example, a recent Wall Street Journal headline read, “Big Data Powers Revolution in Decision Making”, and Forbes recently said, “Big Data is Hot! Now What?” Wikipedia defines Big Data as “a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools.” Meanwhile, SAS believes that “Big Data is a popular term used to describe the exponential growth, availability, and use of information, both structured and non-structured.” While I believe these are accurate descriptions, I would like to take it a step further and argue that Big Data can actually be defined simply as any amount of data your organization cannot harvest and effectively use the tools currently available.
The world is increasingly interconnected, and as a result – is creating an explosion of data growth. Of the 7 billion people in this world, 5.1 billion own a cell phone. Each day we send more than 11 million text messages, watch more than 2.8 billion YouTube videos, and perform more than 5 billion Google searches. The volume, variety, and velocity of data being created each day, hour, and minute are staggering and will only continue to grow.
To better understand what Big Data is, we should step back in time to recall what has brought us to this data revolution. In 1936, the first programmable computer was developed. The original Internet was developed in 1969, soon followed by the release of SAP (the first enterprise software to manage business operations and customer relations). In 1974/75, the first personal computers came to market, and Microsoft Windows appeared in 1983. In 1986, the idea of the “gigabyte” was founded, and in 1990, the term “ERP” was coined by Gartner. More recently, an EMC Corporation study concluded that by 2010, we had created 1.2 trillion gigabytes (1.2 zettabytes) of data. Big Data indeed!
Despite the abundance of Big Data, recent surveys of senior business leaders (CIOs, CFOs, and CEOs) reveal that one out of two feel they do not have access to the information that they need to make critical business decisions. One out of three said they make frequent decisions with a lack of trust in their data. If we don’t have the information we need, and we do not trust the data we already have, is exponentially more data really going to help? Probably not.
If you are like most organizations, you may not be ready for the new “Big Data Train,” because you still struggle to effectively utilize the data you already have. So the question is, “how does your organization get control of your existing data and become more data driven?” The answer has two parts. The first part is implementing a robust business intelligence environment, where relevant raw data is organized and converted into game-changing information. The second part involves building a culture of accountability and fact-based discipline through integrated planning and feedback processes.
The Benefit of Implementing a Robust Business Intelligence Environment
Imagine the possibilities when you begin to fully unlock your data and mine the information. What if you could reveal new insights in almost real-time, allowing your organization to easily adjust and transform problems into possibilities and possibilities into proactive strategy? The sad reality is most companies cannot quickly answer even the most basic questions such as, “how much do I sell to my top customers?” or “which of our products makes the most margin?” Therefore, organizations armed with business intelligence tools that unlock their current data will have an enormous competitive advantage because they will be in a better position to uncover new insights and to create new opportunities both from their existing data and from new Big Data streams.
Becoming a Data-Driven Company
In a research study published last year, professor Erik Brynjolfsson of MIT and his colleagues concluded that of the 179 large companies they studied, those adopting “data-driven decision making” achieved profitability gains that were six percent higher (on average) than other factors could explain. However, being data-driven is not just about having more or even better data; it’s part of a company’s culture. Real competitive advantage comes from creating an organizational culture where fact-based information drives decision making. Unfortunately, organizations have become so content with the lack of answers available from their existing software tools, their employees have stopped asking questions and continue to rely on the highest paid person’s opinion (“HiPPO”).
Harvard Business Review recently called Big Data a “Management Revolution.” How true. Data-driven companies constantly push information down through their organizations; they use sophisticated planning tools to create accountability across their business, and they develop dynamic feedback mechanisms to reinforce good decisions and quickly course-correct poor performance. If that is not a revolutionary approach to management, I am not sure what is. In my opinion, becoming data-driven really boils down to just two things: leadership and the right set of tools/processes. Good leaders have never had all the answers, they just know the right questions to ask. As a leader, one question you should ask is, “do I have the right tools and processes to fully unlock my data, so my company can survive in this new world of Big Data?”
The Bottom Line
If your organization still plans and reports using spreadsheets, if you cannot identify which 20 percent of your sales drives 80 percent of your profit, or if you have stopped asking questions because it takes too long to get the answers, then now is the time to gain control of your data and transform your organizational culture. The Big Data Train is leaving the station. The question is, will you be on it?