Big Data Management Revolution (2012) PDF

Stuvia - Koop en Verkoop de Beste Samenvattingen Week 4: Big Data: The Management Revolution (McAfee & Brynjolfsson, 2012) “You can’t manage what you don’t measure.” Through big data, managers can measure, and thus know radically more about their businesses, and directly translate this data into b...

Stuvia - Koop en Verkoop de Beste Samenvattingen Week 4: Big Data: The Management Revolution (McAfee & Brynjolfsson, 2012) “You can’t manage what you don’t measure.” Through big data, managers can measure, and thus know radically more about their businesses, and directly translate this data into better decision-making and better performance for the firm. What’s new here Business executives sometimes ask us, isn’t ‘big data’ just another way of saying analytics? - It is correct that they are related: big data movement, like analytics before it, seeks to glean intelligence from data and translate that into business advantage. However, there are three key differences: 1. Volume More data cross the internet every second than were stored in the entire internet just 20 years ago. This gives companies an opportunity to work with many data in a single data set – and not just from the internet. 2. Velocity The speed of data creation is even more important than the volume. - Real-time or nearly real-time information makes it possible for a company to be much more agile than its competitors. 3. Variety Big data takes the form of messages, updates, and images posted to social networks; readings from sensors; GPS signals from cell phones, and more. - As more and more business activity is digitized, new sources of information and evercheaper equipment combine to bring us into a new era: one in which large amounts of digital information exist on virtually any topic of interest to a business How data driven companies perform The second question sceptics might pose is this: “Where is the evidence that using big data intelligently will improve business performance?’’ However, no one has thoroughly addressed this question yet. Not everyone was embracing data-driven decision making. But across all the analyses, one relationship stood out: - The more companies characterized themselves as data-driven, the better they performed on objective measures of financial and operational results. 15 Gedownload door: matsmolenberg | [email protected] Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar. ¤ 912 per jaar extra verdienen? Stuvia - Koop en Verkoop de Beste Samenvattingen Improved airline ETAs - - Information about flight arrival times is important for airports: If a plane lands before the ground staff is ready, the passengers and crew are effectively trapped; if the plane arrives later than expected, the staff sits idle, driving up costs. This allowed the airline to eliminate gaps between estimated and actual arrival times. Big data leads to better predictions, which yield better decisions in turn. Speedier, more personalized promotions To do the analytic work faster and cheaper, Sears Holding turned to big data practices. - First, they set up a group of inexpensive commodity servers whose activities are coordinated by an emerging software framework called Hadoop. Then, analyses were performed directly on the cluster, eliminating the timeconsuming complexity of extracting data from different sources and combining them so that they can be analysed. A new culture of decision-making The technical challenges of using big data are very real. But the managerial challenges are even greater— starting with the role of the senior executive team. Muting the HiPPO’s - One of the most critical aspects of big data is its impact on how decisions are made and who gets to make them. When data is scarce, expensive, or not available in digital form, it useful to have educated people make decisions based on their experience (intuition). Many in the big data community maintain that companies often make most of their important decisions by relying on “HiPPO”—the highest-paid person’s opinion However, people rely too much on experience and intuition and not enough on data. New roles Executives interested in leading a big data transition can start with two simple techniques: 1. First, they can get in the habit of asking “What do the data say?” when faced with an important decision and following up with more-specific questions such as “Where did the data come from?”, “What kinds of analyses were conducted?”, and “How confident are we in the results?” 2. Second, they can allow themselves to be overruled by the data: There are few things more powerful for changing a decision-making culture than seeing a senior executive admit when data have disproved a premise. > When it comes to knowing which problems to tackle, of course, domain expertise remains critical. > As the big data movement advances, the role of domain experts will shift. They’ll be valued not for their HiPPO-style answers but because they know what questions to ask. 16 Gedownload door: matsmolenberg | [email protected] Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar. ¤ 912 per jaar extra verdienen? Stuvia - Koop en Verkoop de Beste Samenvattingen Five management challenges Companies will not reap the full benefits of a transition to using big data unless they are able to manage change effectively. Five areas are particularly important in that process: 1. Leadership - Companies succeed because they have leadership teams that set clear goals, define what success looks like and ask the right questions. - The successful companies of the next decade will be the ones whose leaders can do all that while changing the way their organizations make many decisions. 2. Talent management - A crucial complement to data is “scientists and other professionals” skilled at working with enormous quantities of information. - People with these skills are hard to find and in great demand. 3. Technology - Tools available to handle the volume, velocity, and variety of big data have improved greatly. - However, these technologies require a skillset that is new to most IT departments, which will need to work hard to integrate all the relevant internal and external sources of data. 4. Decision-making - In the age of big data, information is created and transferred, and expertise is often not where it used to be. - People who understand the problems need to be brought together with the right data, but also with the people who have problem-solving techniques that can effectively utilize. 5. Company culture - Companies are required to break an often-ignored bad habit: pretending to be more data-driven than they really are. - Often, executives brighten their reports with lots of data to support decisions that they had already made using the traditional HiPPO approach. 17 Gedownload door: matsmolenberg | [email protected] Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar. ¤ 912 per jaar extra verdienen?