“Advanced analytics and predictive algorithms change both supply and demand chain processes,” asserts the editorial staff at Supply & Demand Chain Executive, “allowing companies to make real-time decisions leading to bottom-line profitability increases and risk mitigation.” [“Big Data to Penetrate All Aspects of Business in 2014,” 12 February 2014] For years consultants have been telling companies that the clock-speed at which businesses now operate is increasing. Or, putting it another way, the cycle time in which decisions must be made is decreasing. That’s why you read more articles about real-time decision making. John Slitz, CEO of SpaceCurve, insists that Big Data analytics can help relieve some of the pressure decision-makers are feeling because, even though “data is getting bigger, faster and more complex, … it can more closely mirror reality.” [“Beyond Big Data: Prepare for Real-Time Insights,” Wired Innovation Insights, 11 February 2014] He continues:
“Big data — the term itself is overwhelming, yet it doesn’t capture the transformation that data is beginning to drive in organizations today. Data is a digital raw material that companies have been accumulating for years at great expense but suboptimal purposes. Now smart organizations are focusing away from simply amassing ever-larger quantities of homogeneous data to acting on and creating value from wide varieties of data in real time. Through processing and fusing all available data, data is at last creating an accurate platform for decisions and measurable advantages for businesses: reducing market risk, honing predictive analysis and speeding improvements in processes. The ‘big’ in big data really means the value data can now deliver to the bottom line. … Social media and smart phones provide live intelligence on events as they happen. Sensors are sending data continuously and beyond their original, usually narrow purposes, creating a second World Wide Web. And this ability to monitor an increasingly accurate picture of the world has just begun: smart sensors are projected to grow to 2.8 trillion devices from 65 million in 2013, according to Susan Eustis, president of WinterGreen Research. Fusing stored and streaming data sources to create a more complete view of the conditions affecting an organization is hard. Knowing what to do with the insights created could be even harder. But this is exactly where big data is beginning to create value and shake up staid businesses.”
When western companies scan the business landscape looking for competitors, they spend a lot of time looking at Asia. A survey conducted last year by EMC indicates that Asian companies believe that Big Data is going to help make them even more competitive. For example, “81% of respondents in Korea believe that Big Data will be an important factor in determining winners and losers in their industry” and 79% of respondents from Taiwan believe they “have already achieved a competitive advantage as a result of Big Data analytics technology.” [“Big Data is improving decision making, according to a newly released global survey by EMC,” by Anuradha Shukla, ComputerWorld, 13 December 2013] Hélène Barnekow, senior vice president of World Wide Field & Partner Marketing at EMC Corporation, told Shukla, “IT [including Big Data analytics] can help businesses find efficiencies in a challenging economic climate while providing a platform for innovation for products and customers.” The staff at Supply & Demand Chain Executive reports, “The International Data Corporation (IDC) predicts that big data may grow to 40 trillion gigabytes by 2020, offering opportunities for companies willing to invest the time and money to analyze and utilize the data available.” The article continues:
“According to a recent article in Forbes, ‘Top Four Big Data Trends for Businesses in 2014,’ big data penetrates all aspects of business, from supply chains to marketing. ‘This has been seen with companies such as Netflix and Amazon, both of which have begun producing original TV content based on consumer viewing behavior, and production companies like Relativity Media, which has employed analytics algorithms to decide which movies to make.’ In the process industry supply chain realm, big data and advanced analytics enable clients to, for example, predict major asset failure and adjust their supply chains accordingly, sense transportation hub congestions and re-route, or send the right finished products to the right locations 10 days in advance based on weather. In addition to supply chain efficiency, big data improves relationships with supply chain stakeholders as well. For example, a shipper can utilize the collective purchasing power of a supply chain network of carriers, which bids the best rates, offering the shipper access to previously unknown shipping partners who help to lower the shipper’s transportation spend. With the collaborative power of a supply chain operating network and its big data analytics, companies can be proactive and generate additional revenues, such as having the ability to unload inventory to another business on the network that is out of stock of the same products.”
Slitz reports that beyond the beyond the benefits noted above, “A recent Gartner survey of business leaders found of those who have deployed big data technologies, 42 percent are developing new products and business models, and 23 percent are monetizing information directly.” In other words, Big Data analytics have not only allowed them to make better decisions faster, they have helped businesses transform to keep up with changing conditions. That’s one reason EMC’s Hélène Barnekow told Shukla, “It was surprising … to see that one-third of businesses are not considering Big Data solutions – we expect this to change in the near-term as individuals and companies hear more about the transformative benefits that are achievable with Big Data analytics technology,” Slitz adds, “The best business manager predicts the future, introducing products and services to exploit new opportunities, overcoming the challenges that restrict that execution, and out-thinking the competition.” He continues:
“Technology now exists to do just that, to continuously improve business processes, and change the purpose of data from historical enumeration to real-time predictive, actionable intelligence correlated in space and time. With these new technologies in place, businesses will continually have to face reality, whether they like it or not. But they will also have greater capacity to act on that reality: to respond to customer sentiment and choices as they happen; to monitor assets in real time; to equip employees and partners with the information they need in the moment. Assessing opportunities and risks faster and more completely, and making decisions about them more quickly, drives business value. And the ability to measure the effects of decisions and actions in real time will also change the metrics of profitability, growth and other measures of those advantages.”
Slitz goes on to state that retail businesses aren’t the only groups that need better faster decisions. Other groups include first responders, emergency response teams, and energy providers. In fact, he insists that any organization that has to respond quickly to changing conditions can benefit from Big Data analytics. “Many of the insights generated and verified by live and multiple data sources will be counterintuitive and contradict assumptions previously made — even those made by C-level executives,” he writes. “That’s the point. Those organizations that let the reality of business drive execution will see change not as a threat but as an opportunity.” He concludes:
“The world is changing, but now businesses can see and act on those changes as they are happening and better predict the changes to come. The earth is being instrumented with millions of smartphones and new sensors every day. These devices are continually reporting weather, temperature, social climate, speeds of cars, trucks, planes and even the locations of cartons of milk and crates of eggs. Measuring change is one thing; taking advantage of it is another. Transforming this cascade of dissimilar data into actionable intelligence will take not only new tools and technologies, but also visionary leaders to employ them. Those who act first will have an unrecoverable lead on the next twenty years of progress and growth in their markets.”
Has there been a lot of hype about Big Data analytics? Certainly. The better question is: “Why do so many analysts and business leaders continue to believe that Big Data analytics have the power to transform the business landscape despite the hype? I’m sure there are a number of ways that question could be answered; but, in some way or another, all of those answers would include the fact that only through analytics can businesses make sense of the mountains of data that are (and are going to be) collected. The old adage “knowledge is power” has never been more true.
