HOW BIG DATA
IS IMPROVING
MANAGEMENT
These benefits only become tangible in a company, however, when the organization makes the cultural transition that’s necessary to become a Big Data-driven business.
The primary question that leaders in Big Data-driven
companies ask is not “What do we think is the best course of action?” but rather, “What do we know to be true? What data do we have?”
companies to measure many more factors than could be measured in the past. With this expanded ability to measure, track, organize and interpret additional key business factors, new frontiers open up for enterprising creativity.
As an executive, are you in doubt about to how to deal with this new Big Data environment to achieve the insights you need to run your business?
Traditional business intelligence and data tools just aren’t equipped to handle the expansive changes on today’s commercial horizon. Ciklum’s Big Data Consultants can help you build a vision and a roadmap to modernize your business data infrastructure.
In the last five years an ecosystem of open source tools has emerged to cope with these new Information assets, like Hadoop for Big Data Storage, Hive for Data Warehousing, and Pig for Data Access & Analysis. At the same time, an army of proprietary tools have also emerged for these same functions. Ciklum’s Big Data consultants can advise you on how best to implement these new resources in order to see the best returns possible for your business.
When seeking to understand the revolutionary importance
INNOVATIONS IN BIG DATA ARE NOW MAKING IT POSSIBLE FOR SMART MANAGEMENT EXECUTIVES IN VARIOUS INDUSTRIES TO
INCREASE REVENUE, INCREASE
PROFITABILITY, AND REDUCE COSTS,
WITH PREVIOUSLY UNIMAGINABLE
EFFICIENCY.
opens up a vast horizon of success. It does this because when we recognize that now virtually any factor of a business may be measured, we also recognize that therefore it may be managed more appropriately than ever before.
The art of management is the art of deciding how to appropriately engage at any given moment with the finite resources at hand in a way that results in the most bountiful revenue and profit and the smallest costs.
To understand this better, consider that the relevance of Big Data to online retailers is indisputable. Everyone knows the famous story of how online retailers like Amazon and Zappos have succeeded in steamrolling past their brick-and-mortar competition simply by making it a priority to interpret and act upon the additional customer preference and behavior data that their online status allows them to have.
Today, however, all businesses, not just giant online retailers like Amazon and Zappos, are realizing that in order to stay competitive, the main arena in which they have to leap to the forefront, is the game of how well they can understand the data that they collect.
Put simply, data collection and interpretation is the main game of business now. In other words, Big Data is simply a synonym for greater business intelligence. And as the world’s markets become increasingly leveled by more common
access to material resources, intelligence becomes the most precious business commodity by a long-shot. Intelligence is now the factor that separates the winners from the losers.
Big Data now allows us to zero-in on more-effective business interventions, so that we can hone-in with hard facts on regions of business that were once managed only by magical thinking and intuition instead of verifiable numbers and precision.
Executive leaders with foresight across all industries are now waking up to the fact that Big Data isn’t just a novel approach to management, it is a fundamental revolution in the way that business unfolds. As you can imagine, it’s a revolution that affects every level of management decision-making:
from customer satisfaction to supply-chain advancement, to shareholder approval – no aspect of business will go untouched by the impact of Big Data processes.
EMERGING PO WER
Big Data, similar to business analytics, aims to elicit intelligence from gathered information, and then to transform that intelligence into a concrete business advantage. However, it’s important to understand that major differences separate previous business analytic capabilities from emerging Big Data solutions.
The first of these crucial differences that executives need to understand is speed.
In most cases, the velocity of information generation now matters more than the sheer quantity of it. For example, information that’s gathered in real-time allows a company to rapidly adjust to shifting circumstances.
However, a second crucial difference between Big Data and old-fashioned business analytics is actually just the plain and simple quantity of it. This is the factor that puts the “Big” in “Big Data.” In 2015, about 5 exabytes of data are generated every twenty-four hours. To put this giant quantity into perspective, think about it this way: an exabyte contains 1,000 times the amount of information that would exist in 20 million filing drawers’ worth of text.
A third key difference between Big Data innovations and previous business analytics has to do with the multiplicity of data
sources. Big Data now includes all text and all images on social media, all input from GPS signals on personal cell phones, and output from on-location company sensors. We’re now so surrounded by mobile computing devices and by ever-present access to the internet, that it can be very easy to forget that these information resources are actually incredibly recent luxuries. The recentness of the availability of these information resources means that corporate databases, built more than a handful of years ago, are utterly ill- suited to hold and interpret Big Data.
BIG DATA
AND HUMAN INSIGHT
THE NEW IMPORTANCE OF BIG DATA TO ENDURING BUSINESS SUCCESS, IS REVEALING A FACTOR THAT MANY EXECUTIVES ARE STRUGGLING TO ACCEPT: HUMAN
BEINGS TEND TO RELY TOO MUCH ON THEIR INTUITION
AND EXPERIENCE (IN OTHER WORDS, ON THE PAST) AND
TOO LITTLE ON THE INSIGHTS REVEALED BY HARD DATA
(ON THE TRUTH OF THE PRESENT).
This habit of relying on hunches and on the past to inform current maneuvers is one that made sense in a world where data was limited, but it does not make as much sense in our present, digitally-connected world, where the availability of data is vast and essentially unlimited.
However, human finesse still plays an important role in management. Executives need to lead the charge in their company culture to elevating the importance of listening to data above personal intuition. The foremost way that executives can succeed at doing this, is by modeling the behavior in front of their employees. In other words, executives who want to make an impact in the orientation of their company culture towards the higher valuation of data, need to prioritize surrendering “their way” to the data-based evidence. This is the most powerful move an executive can deploy in changing the decision-making culture of his or her organization. Executives can also make manifest a change in
their company’s culture by continuously asking “What does the data indicate?” when meeting a key decision and then by following that question with other, more precise questions, like “What kind of analysis created this data?” and “What is the source of the data?”
As Big Data continues to rise in importance, it actually shifts the role that high-paid executives fulfill. Rather than leading from personal bias and past prejudice, contemporary executives in the age of Big Data create massive value primarily by knowing what questions to ask.
Put simply: the data has all the answers. The answers are totally abundant. The right questions are a lot harder to come by. In this moment, the right question is far more rare and far more valuable than any answer. So it’s in finding the right question where the value lies, and that’s where human awareness, intuition, and expertise, come in to play.
THE
CHALLENGE
OF BIG DATA
The business challenge that Big Data introduces is the challenge of extracting actionable insights from huge amounts of information through a deep analysis of the data.
Managers must be able to evaluate and interpret the output from Big Data analysis, because if they’re not able to
understand it themselves, they will be left behind. Even more than examining information that’s created in the normal flow of business, a fresh realm opened up by Big Data demands that managers create large-scale prediction experiments, and interpret data from those experiments in order to know what move to make next.
The most successful managers in today’s world are
executives who both have a powerful business intuition and can also communicate in the language of statistics. This means that they understand what the data can demonstrate and what it cannot demonstrate. These successful managers know how to use data interpretation to supply evidence that supports their business intuitions. Business people who are able to do this are highly sought-after.
To grasp the full business advantage that Big Data provides to management potentials, it’s important to ponder the thousands of innovations that can be drawn out of the mass of data available to your company. Managers should focus on finding complex patterns in data streams and generating actionable predictions from the patterns that they observe.
Big Data can be especially relevant to the management of systems that are consistent over time, with direct and well- defined qualities and not too much complexity. Of course, complexity and unpredictability are ongoing elements of
the world that require human intelligence to be dealt with appropriately. They can create shifts that can skew even the largest collection of data.
It’s crucial to remember that Big Data, above all else, is a potent resource for inferring correlations, but it’s not a panacea for inferring causality. Correlation does not equal causation. This is a hugely important piece of the logical puzzle that executive managers must keep in mind when working to interpret output.
An important consideration when implementing data-based approaches to business solutions is to make sure that you have enough data to attain the purpose that you wish to fulfill, that there’s not too much noise, and that you measured the correct items.
In a similar fashion to the way that success in various sports depends on having some basic athletic skills, success with managing in the age of Big Data depends on having some fundamental analytic skills.
Key skills that successful managers in Big Data have include a background knowledge of computer science, understanding how to use Hadoop and how to code in languages like R and Python. It’s also important that executives brush up on their statistics and math skills.
Still, the most crucial quality impacting management talent in relation to Big Data, may be simple common sense good judgment, and also an intense curiosity about the uses of the data.
FOUR BUSINESS BENEFITS FROM BIG DATA
Some of the possible benefits of deploying a sound method of Big Data insights include:
• Real-time forecasting of events that affect business operations and performance
• The extraction and visualization of data with your tools of choice
• The identification of significant information that optimizes decision strength
• The extrapolation of insights from data stored in company databases, and from social media and remote sensors
These predictive powers open up new avenues and advantages for business. In a business world that continually evolves and changes quickly, the prediction of the future becomes more complex than just relying on the visualization of past or current perspectives. Prediction has to go beyond visualization and instead use statistical modeling techniques to improve the company’s strategy. The gathering of Big Data from both the inside and the outside of the enterprise itself empowers the company to grow its own predictive ability.
In order to really grasp the degree to which Big Data has altered our world, consider the way that the experience of renting movies has changed lately. It used to be that movies were once rented from independent neighborhood stores, and the rental store manager would base their recommendations to customers on anecdotal information about which movies other customers liked and also largely on their own personal opinions.
Now, movie rental businesses like Netflix and Amazon use a huge variety of data points to create recommendations of films. By interpreting information regarding what films were watched, when, where, and on what device, as well as by factoring in consumer actions-- including internet searches and webpage browsing-- movie recommendations can be very finely tailored. This fine tailoring takes into account not just opinion or anecdote, but actual vast realms of intelligence on the real- time choices of millions of other consumers.
With Big Data, business decisions about a wide-range of subjects including operations and performance management, customer
