In his book, “How to Create a Mind”, technologist Ray Kurzweil estimates that a human brain can recognize 100,000 patterns. But consumers are producing a huge amount of information by the minute & our minds may just not be fast enough. “Big data” is what they call this data deluge & it has become the sexiest word in business in a very short time.
A decade ago, people didn’t use the words: Data, Big data or Analytics as much as they do now! Today data is the new oil & everyone reminds you of this constantly! And yet too much of something can be an issue & individuals have to learn to manage this data deluge with respect to data reliability & data privacy!
And now it is estimated that by 2020, around 50 billion devices will be wirelessly connected to the internet. At the same time, from 2012 to 2017, machine-to-machine traffic has grown at an estimated 24 times, a compound annual growth rate of 89%. The majority of data will be collected passively through machine-to-machine transactions. Although still projected to grow rapidly, the overall proportion of data actively generated by individuals will decline. So a lot of data about us as customers will be passively collected without us even knowing about it. With their Android and iOS mobile operating systems, respectively, Google and Apple know the location of every customer’s Wi-Fi-enabled phone—far more location data than any other company could access.
The growth of IoT & connected devices will affect every walk of life. There is no doubt that this deluge of data can have huge positive implications for society, business & also the individual. Some of the societal benefits can have huge implications. As an example, strategically placed acoustic sensors that pick up gunshots have shown that previous assumptions on the level of gun activity in certain neighborhoods were wrong. Police departments operated on the assumption that when shots were fired, 80% of the time someone called 911. In fact, this percentage could be as low as 20% of the time, a fact that was revealed when these sensors were able to pick up actual gunshots, providing local police with new information and insight
And this data deluge, for most companies, is like having sections of a jigsaw puzzle in different rooms, but the puzzle keeps growing without a “puzzle master” integrating all this. The analyst, like the “ringmaster”, is really the “puzzle master” here & she needs to think very differently to do this. We don’t need more data; we need the correct interrelationships between data to be established & then we need “Big execution commitment” to make the data matter, by bringing decisions closer to the front end of every business.
But clearly Big data is creating a discontinuity in the marketplace! Estimates suggest that more than a zettabyte (that’s a 1 followed by 21 zeroes) of information now circulates around the internet. Most minds will need help before they can analyze this massive stream of information, likened to drinking from a firehose!
Darian Shirazi, the founder of Radius Intelligence Inc., calls this a problem of “haystacks without needles.” Companies too often “don’t know what they’re looking for because they think big data will solve the problem,” he says.
Kenneth Neil Cukier is the Data Editor of The Economist. He argues that having access to vast amounts of data will soon overwhelm our natural human tendency to look for correlation and causality where there is none. In the near future, we’ll be able to rely on much larger pools of “messy” data rather than small pools of “clean” data to get more accurate answers to our questions.
Cukier says something very interesting: “When we teach journalism in the future, we’re not just going to teach people the fundamentals of how to do an interview. We’re going to tell people how to interview databases. And also, just as we train journalists by telling them that sometimes people that we interview are unfaithful and lie, we’re going to have to teach them to be suspicious of the data, because sometimes the data lies, too. You have to bring the same scrutiny as in the analog world — talking to people and observing — to the data as well.”
Today’s businesses have the opportunity to work with all sorts of data: contact details, location information, purchasing history, social and professional contacts, browsing history and online behavior, workouts, store visits, television preferences, and their personal views—much of which is gathered in real-time. big data is fundamentally allowing businesses to “mash up” both structured and unstructured data, from a host of sources, sites, and sensors.
Data is an asset but its value is often hidden away in every company. Gartner predicts that 30 percent of businesses will monetize their information assets directly by 2016. Digital technologies now enable massive data collection, as the cost of data storage has fallen. Facebook (FB) has grown to a $200 billion company in less than a decade. Capturing user data helps these companies provide customized ads to users that help them monetize those ads better. Kroger generates an impressive $100 million annually in incremental revenue by sharing information about its customers with FMCG brands.
Infonomics is now being heard about far more often. It describes the discipline of quantifying, managing and leveraging information as a formal business asset. It surmises information is an asset and should be managed as an asset because it has a value. And yet, while your office furniture is classified as a fixed asset & features on your balance sheet, your customer data is just not valued as a financial asset.
And yet with so much data everywhere, the danger lies in trusting the data analysis implicitly without grasping its limitations and the possibly flawed judgments of the people who build predictive models.
Customer data, therefore, is still not valued as much as it should be and though every one mouths platitudes about data security –the fact is that it is often compromised. Not too many CMO’s focus their efforts on extracting revenue yield from existing customers and that leaves relatively junior people driving this agenda. Ironically in many businesses where regulation drives a “Know your customer” regime like banks or Risk standards push the banks to do what is called a “customer point verification”-there is an army of cheap resources out there in the market confirming that you are who you claim to be….no one monitors this stream of potential data loss as carefully. And finally, people do not pay attention at all to two other streams of data-Prospect data & Lapsed data. Especially customers who cease to be customers of a bank or Retailer then end up as databases on the market further muddying a “grey market”.
And finally, all this data is leading to huge privacy issues for all of us. Former US Vice President Dick Cheney modified his heart defibrillator to disable the wireless feature due to concerns that his device could be hacked remotely. In the final analysis, all of us need to be aware of Privacy, Reputation, and Identity in this Digital Age, where we are leaving exhausts of our own data out there for many to see, analyze & act upon.