In the past week, I have run across the term “Big Data” a number of times. While there is a temptation to reflect on how something pops into awareness like that, from seemingly all directions at the same time, today we will focus on the topic and not the means and methods.
In “That New Big Data Magic”, CFO magazine cites the proliferation of sensing devices (such as radio frequency identification), wireless networks, social networks, point of sale systems, on-line transaction systems, and others as a major reason that the amount of data will double roughly every two years.
The Economist went higher, saying it increases tenfold every five years.
No matter who we believe – those are huge increases!
This coming data explosion poses the danger of “insight deficits” according to the Corporate Executive Board, especially since Ventana Research has already said that “businesses have more of it [data] than ever before”.
Suspicious and Promising, Scary and Exciting All at the Same Time
For those who are financial contrarians, this is immediately suspicious. Magazine articles? “Special reports”? “Special research”? Somebody is trying to sell someone something somewhere! When will these fads end?
For the analytically minded, this is exciting news on a number of fronts. Finally, there is data to crunch! Finally, people are really going to start looking at the numbers and using analysis before they make decisions. Finally, we will get senior management support.
For those who like their current roles, this is frightening, as they will likely change dramatically over the next 5 to 10 years.
For the entrepreneurs, it is promising. McKinsey in a special report on the topic, identified a number of value creating aspects to “Big Data”, including better customer segmentation, transparency benefits, competitive advantages, and opportunities for new products and services.
Have We Talked About Knowledge Work Before?
Somewhere in my past I ran across the concept that data was different than information. This was echoed in the Economist article “Information is made up of a collection of data and knowledge is made up of different strands of information”.
A bunch of numbers on a page?…Data.
Grouped into three different categories with one group representing 75% of the total?...Information.
Selecting the appropriate marketing strategies that work on that large segment?...Knowledge.
If data develops information which creates knowledge, and data is going to double every two years, or grow tenfold every five years, then we are going to be creating a boatload of knowledge!
More people will become knowledge workers, either from the get go or from role transformation as this knowledge is developed, synthesized and disseminated. This is obvious to me in the Treasury field.
Back in the day, when I was an auditor, we reconciled bank statements with highlighters, marking the corresponding items from the bank statement to the accounting ledger. Ideally, once we were done both were highlighted completely and there were no entries still not accounted for.
Today, the Treasury Workstation or ERP system, through its algorithms, performs 99% of a bank reconciliation today, leaving the cash processor to focus on the handful of exception items. And it’s the exception items, knowing where to hunt the answers down, zeroing in on the promising and avoiding the red herrings, which is the knowledge work component of the job.
Let’s Get Ready
What do we need to do as organizational leaders to get ready for Big Data’s appearance in our house? In some ways this is the easiest part of the puzzle to address:
Get Some Skills and Talent, and Reappraise the Skills and Talent Already at Hand – we are going to need people, and there is going to be a shortage of those capable of handling analytics. Some of the people in the organization already possess some knowledge or ability, and are capable of learning and developing further. A lot of what we will do with Big Data is not new, as Ted Sapountzis tells us.
Be Introspective and Curious – the best thing we can do is ask questions. Adopt the mindset of the boy taking the radio apart to see how it works, only apply it to information. We have this category, how do people in this differ from ones in others? How can we do x, y and z better? What information can we review to prove it?
Demand Data – how do I get comfortable this is the correct conclusion? Is this just a theory or can it be backed up by facts?
Question Data – just because there is data lying around doesn’t mean it is any good. Has it been scrubbed? Are we drawing conclusions that the data justifies or are we using techniques erroneously?
Be Strong – just because we have data, doesn’t mean we should always base our decisions on it. We are still the deciders, not the black box. “The data shows the Speed Limit is 55 and we are going 50, therefore we should speed up.” “OK, but you know what? I am still going to slow down, because it has just rained, there is a 90 degree curve just ahead, and there is a huge truck in front of us, and it doesn’t look like it’s going anywhere near 55!”
Look for Opportunities – Big Data has potential to spawn new products and services based on its creation. Depending on what line of business we are in, there is a potential to develop our own big data as a competitive advantage, or branch into some of these products and services.
Big Data is already here, but we are going to notice it more and more. Interesting times, indeed!
I would love to hear your thoughts about “Big Data” or your stories on this topic if you have them.
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