Last month I visited the Gutenberg Museum in Mainz, Germany. Until this visit, I had not fully considered the impact the invention of the printing press had on the dissemination of knowledge and in enabling democracy. Prior to Gutenberg’s invention, the transfer of recorded information was reliant on scribes copying information by hand from one book to the next. After the printing press, multiple copies of a document could be created, increasing the dispersion of knowledge and lowering its acquisition cost. More information, lower cost.
There have been few transformations in our history that have had this broad of an impact on society or on business. “Big Data” has the potential to be another of these monumental shifts in how we operate.
We are in the midst of two significant trends, the exponential growth of information and the rapidly contracting cost of processing information, driven by the increases in computing power and the dropping cost of storage. More information, lower cost.
Consider the following growth in electronic information:
- Wal-Mart serves 200 million customers a week, and on Black Friday processes 5000 items per second (WalMart.com).
- 90 trillion emails are sent a year.
- 645 Million Average weekly local business page views on Facebook
2012’s mobile data traffic was more than 11 times the size of the entire Internet in 2000. www.cisco.com//white_paper_c11-520862.html
With the growth of both input devices and sensors, the amount of information is rapidly exploding. Much like the printing press accelerated the storage of thought in multiple locations, the shift in data from paper records to digitally accessible is transformational. Information that was not searchable or source able is now easily accessible.
This information becomes truly valuable when it can be processed cost effectively. Data analysis techniques that only 10 years ago were affordable by the CIA or the largest firms are now available affordably on-line.
- The amount of data storage is more than doubling every two years (Forrester)
- 90% of the data in the world today has been created in the last two years (IBM -ibm.com/bigdata/)
- Algorithms for processing data are getting exponentially smarter
- SaaS based CRM will grow at a 16.3% CAGR through 2016. (Gartner)
- Spending on big data will increase from $5 Billion in 2012 to $50 Billion by 2017 (Wikibon)
InBig Data: A revolution That Will Transform How We Live, Work and Think By Viktor Mayer-Schönberger and Kenneth Cukier, the authors argue that our traditional thinking based upon causality will transform to a reliance on correlation in determining likely outcomes. This insight, they argue and the data supports, is going to transform how analysis, discovery and business are done.
With this transformation underway, here are 3 considerations for your business:
- Change your organizations thinking from what data do we need to store, a compliance thought pattern, to what could we do with more data, a customer facing solutions focused thought pattern.
- Use big data to solve your problems. What business problems can you solve more effectively with more data? Don’t limit your thinking to what data you currently capture, reframe your thinking to what data you need. Some examples would include cost per acquisition of a customer, lifecycle profitability of a customer, or performance metrics for various suppliers equipment.
- Use big data to solve your customers problems. How can you use information to gain a competitive advantage? G.E. is reshaping their business, spending millions of dollars to gain value from the data available from their industrial equipment, such as jet engines and oil drilling equipment (WSJ, May 29, 2013 GE big data bet WSJ). They will translate this into increased value via greater uptime, lower energy consumption and better predictive analytics. What information about your equipment or customers would be truly disruptive, and how can you be the first to capture it?
By focusing on the ‘so what’, you can move your organization to a place of competitive advantage and not be distracted by the overwhelming volume of incoming data. Information thought leadership needs to move from the CFO to the CEO and CMO - How will you challenge your management team to improve your processes and results?