Big data: gremlin or win-win?
Source: Mag-e (internal newsletter at Belfius); Editorial: Com&Co; Marjan Desmedt
Is big data a monster or will we all end up benefiting from it? Professor Stijn Viaene at Vlerick Business School is convinced that the data economy will really shake up our business models. Here are five questions on this hot topic.
Stijn Viaene is a partner at Vlerick Business School and heads the Information Systems Management Department. He compares the current hype around big data with a gremlin. You know, the cuddly creature from the film that turns into a monster if you feed it after midnight.
"Big data is a monster because there is currently much too much commotion surrounding the phenomenon and too little context. Companies do not know what position to take and opportunists have sensed that there is money to be made. In fact, big data is not a new phenomenon. It's just that digitally generated data has grown to gigantic proportions over the last two decades. Today, almost everyone agrees that a data avalanche is sweeping over us. Some hope to turn big data into a gold rush, others are afraid of missing the boat."
What actually is big data?
Stijn Viaene: "Every definition of big data will include the 3 Vs that characterise the nature of the data: volume, variety and volatility. Enormous and extremely complex data files, which behave very dynamically and in which structures are often deeply buried. Think of the very different data produced by all the social networks, the variety of keywords we enter into search machines or the data produced by sensors in all kinds of equipment.
The majority of the data that companies have access to today falls under the category of big data. It's just that, until recently, the technology to mine this data on an industrial scale was missing. So it's all about technology, to which we connect the potential for business innovation."
Is today's technology ready to tackle big data?
Stijn Viaene: "Nowadays we have the technology to handle the huge quantities of unstructured and often very “dirty” data. So someone with an analytical mind and a feel for IT, for example, can get down to work with the open-source software Hadoop.
Muthu Alagappan and Eric Fischer are two examples. Alagappan has been a mysterious listing in the Forbes ranking of the most influential people in the American sports world for a long time. He used topological data analysis to show that the classic formation of basketball teams is totally outdated. Data provided the insight that the game was being played according to different patterns than intuitively supposed.
Fischer plotted data from photo material on Flickr and Picasa on Open Street View maps. This allowed him to map the interesting tourist hotspots in a number of world cities.
In short, big data is the new American Dream. Anyone who has the right technical and business skills combined with a healthy dose of courage can reach their goals more easily than ever before. And maybe turn a whole industry on its head."
Will data analysis overturn the decision-making process of companies?
Stijn Viaene: "Absolutely. Today, decisions are often taken based on experience and intuition. While this is not a bad thing per se, it is better to collate these kinds of thought patterns and data. The Eric Fishers and Muthu Alagappans of the world are fundamentally questioning the classic approach to management.
So will the manager of the future be a data analyst? Whatever happens, “geeks” will definitely be at the controls and setting the course. But data analysis alone won't be enough. The big challenge is translating the analysis into new business models and processes.
By connecting data, companies will also be able to completely re-imagine their customer relationships. A one-on-one approach through online channels is more feasible than ever before, whether you are a bank or a supermarket."
Is it only big data that offers new opportunities for companies?
Stijn Viaene: "No. Most companies are definitely not getting the most out of the structured, cleaned-up data they have in-house right now. There currently is a big data hype, but there is lots of untapped “small” data around too.
I am convinced that “open data” is a more important phenomenon than “big data”. My tip for companies is to identify their most important internal data files, open these up to potential partners and then to brainstorm how a combination with a partner's data could lead to innovation. Companies should no longer sit on their files like a mother hen. Revolutionary insights will come from partnerships, particularly across different industries."
Finally, what about privacy in the era of data?
Stijn Viaene: "You could argue bluntly that privacy does not exist in the digital world. Will the day come when the right to be forgotten on the internet becomes a reality? I doubt it. In order to handle customers' data ethically, companies have to push the brakes in time. The message is to include privacy in data projects from the start. Otherwise companies put trust irrevocably at stake.
At the same time, I believe that people are quite prepared to exchange some privacy for more personal treatment, top-level service or other advantages. Customers want to share, as long as they benefit from this themselves.”