Michael Adebisi, Director, NewTime Consulting, Ltd.
There’s no question about it: managing the massive, burgeoning scope of Big Data is one of the biggest challenges that companies face now and in the future. Big Data analytics promise to supply answers that fuel effective redirection of company strategies and resources when necessary. But how can CEOs in today’s thin-ice business arena manage the enormity of Big Data, trust that their advisers are choosing and processing correctly, and recover quickly if their management team is wrong? The answer comes from understanding the size and scope of Big Data and avoiding common mistakes.
Understand the size and scope of Big Data
Size: Characterized by volume (zettabytes), velocity (streaming data), and variety (structured & unstructured) the amount of data from the internet is growing exponentially. From scientific to social, education to email, baseball to business, the sum total of Big Data volume has been estimated to be on track for 45 zettabytes [ZB] of data by 2020.
Definitions: Big Data can be thought of both as a term and an action—a noun and a verb. (1) The term ‘Big Data’ is used to refer to data sets that are so large or complex that traditional data processing applications are inadequate to deal with them. (2) The “action” Big Data refers to approaches such as predictive analytics, user behavior analytics, and other methods that extract value from data, so they are not necessarily referring to the particular size of the data set(s).
While it’s amazing to have access to all of this information, more is not necessarily better. Big Data may mean big mistakes if the interpretation and extrapolation are wrong or denied. What blindness let the 2008 financial crisis happen? Hindsight shows that no one wanted to believe the people who were predicting a meltdown. CEOs, while not analysts themselves, will search within the company but may also (sometimes more effectively) seek outside resources. It’s still their job to assess and ensure the output helps reach their company’s sales and profit goals. What should a CEO do to avert the pitfalls of Big Data?
10 mistakes to avoid
- Not recognizing that Big Data will transform business. This is first because it’s the biggest mistake. Big Data cannot be ignored now. Companies that do not leverage Big Data are missing out.
- Launching into a Big Data initiative prematurely. Once decided to engage, the management team may act too early. The executive team needs to ask: What is the value, benefit, and ROI of Big Data analysis? Is it worth the cost?
- Not understanding the need for a Big Data strategy. Consideration must be given to how and when, where and by whom the Big Data initiatives will be incorporated into the business. A mandate by the CEO for teamwork and cooperation among all departments should accompany any Big Data strategy pre-launch conversations.
- Choosing the wrong (or no) vendor. Industry specific business solutions vendors might be the best start, and vendors with a known track record are extremely important. Bigger companies may require big name vendors (Oracle, IBM, SAS). But smaller and medium sized companies can use business solutions firms (Microstrategy, 1010 Data and ApacheSpark) that offer simpler, less expensive but very effective algorithms.
- Not having or hiring the correct people to work with the vendor. The stakeholder CIO and his or her analyst team must be trained and directed. The CEO needs to clearly communicate the expected Key Performance Indicators (KPIs) resulting from the Big Data activities.
- Not planning to hire/train people in time to act on Big Data output (shortage of 190,000 workers in analytical fields by 2018 .) “New collar” workers will be in shorter supply as technology advances.
- Not protecting customers’ privacy/company’s data. Big Data comes with bigger risks. B2B and B2C customers suffer from having their data pirated. Hackers proliferate along with Big Data. Companies will set security parameters with layers of backups to prevent lost data. Data cloud campuses are used by the biggest companies. Smaller companies need backup strategies.
- Not having a “rescue plan” in place. Big Data allows companies to forecast more precisely and read trends unlike any time in history. But if the trends are wrong, the readings are false, then sales, marketing, manufacturing and financial decisions lead to erroneous decisions in the area of pricing, spending on innovation, production, and promotion. Having a rescue plan makes sense.
- Not being willing (or able) to act quickly on the rescue plan. There are too many examples in American business of companies that couldn’t or didn’t act on what they knew to be on course for a suicide mission. Nimbleness counts.
- Not looking at the big picture. It’s easy to fall in love with numbers. The CEO’s job is to rise above the “beautiful” data (it’s mesmerizing) and step back to see what’s happening against the company’s KPIs and larger growth and profit goals.
Big Data in space
Incorrect handling of Big Data can leave the management and sales teams stranded in space—they’ve missed their goal. Even if the large data analytics solutions teams or smaller standalones crunch numbers perfectly, there can be danger in trusting too much. Savvy CEOs acknowledge that Big Data analytics should be a key initiative, but they also know it’s important to hire and contract wisely so internal and outside groups collaborate well. The result: the company’s sales and profit goals are more likely to be achieved.
Big Data analytics yield huge real-time knowledge of consumers’ purchases. Algorithms can try to predict the future… but truly visionary CEOs will take the same data that everyone else sees and find a way through. If they’re particularly gifted, they may spot that one outlier that refutes everything else they see. Or that “outlier” could predict a future everyone else has missed.
It’s a Big Data world and not for the faint of heart. Every CEO has an opportunity to leverage Big Data to make a splash. They just need to avoid the mistakes.
About the Author
Michael Adebisi, director of NewTime Consulting, Ltd, has 15+ years’ experience in investment banking, financial services, and consulting. He has served in a number of positions including CRM Wholesale banking, data integrity, international liaison across Europe, Middle East North Africa, and Nordic countries on FX/Money Market pricing data and financial instruments used by global banks, stock exchanges and governments. Previous employers include ING Investment Bank, Thomson Reuters, National Audit Office and HSBC (Investment Bank). With a M.Sc from Queen Mary College, University of London, Mr. Adebisi has a unique blend of executive acumen, and strong global relationship management skills. For more information, please contact email@example.com.