Companies are learning everything they can about their customers. Every day, information on buying preferences, online habits, satisfaction, usage, and personal data is collected, stored, and analyzed. However, is this data really delivering on the promise of greater understanding, insight, and predictive capabilities? As more systems containing this data are hacked and exploited, does it still make sense to continue hoarding this information if it is not really helping businesses run better?
This week’s episode “Future of Customer Big Data: When Is Enough?” from The Future of Business with Game Changers, a special edition series of SAP Radio, discusses the power of customer Big Data and whether businesses can truly realize its full potential. The panel featured Matt Healey, Principal Analyst, TBR; John Kreisa, VP of Strategic Marketing, Hortonworks; and Greg Smith, Vice President, HANA In-Memory Technology, SAP America.
Not all who wander are lost
Matt Healey started the conversation by acknowledging the art and science behind customer Big Data. “When it comes to this type of analysis and the amount of data we are collecting, sometimes just wandering around in the data and seeing what you can find can give you the best insights,” he observed. But, you don’t have to be someone like Nate Silver to accomplish this. As new simplified tools are developed for people who do not have extraordinary talent or experience in analytics, advanced analytics capabilities can be made available to the masses.
Healey also advised, “You can do a lot with a hammer, but likely you will need other tools, as well. The same is true with Big Data and analytics. In many cases, understanding how to use Big Data with other tools will result in the best possible analysis and forecasting.” With this approach, Big Data and analytics can provide vastly improved business outcomes.
But first, companies need to know the significance and usefulness of the data collected. For example, customer Big Data can help decision makers foresee business limitations. More importantly, it can also break down silos between departments and enable them to take advantage of each other’s capabilities and wisdom. With clear visibility into customer needs and demand cycles, businesses can predict sales more accurately. But if that information stays within the confines of the sales department, the full potential of that data is lost. When this information is shared throughout the entire business network, areas such as production can better understand and plan for peaks in customer demand, workforce management, supply chain needs, and more.
Sometimes, it’s smarter to be lucky than lucky to be smart
According to John Kreisa, “The world’s information is doubling every two years. In 2012, the world created 1.8 zettabytes. IDC believes that the world will generate 40 zettabytes and approximately 85% of the growth can be attributed to the ‘Internet of Things’ by 2020.”
Companies have been challenged in the past to implement cost-effective means to store, access, process, and analyze this data. With new technology, companies can capture and utilize data that typically has not been stored before. Data housed in server logs and machine sensor data, for instance, are producing the Internet of Things. As data continues to grow, companies should plan how to capture new data types, prepare for new data-center architectures, and test a variety of business use cases.
Kreisa recognized that it can be challenging to synthesize, quantify, and increase the business value of unstructured information. “It’s not about assembling petabytes of data, it’s about encouraging people to gather sufficient new types of data with existing data sources and not only allowing, but enabling them to wallow in that data in ways that creatively unlock the value within. Companies typically start with a single use case to prove out the use of data and technologies and then expand,” he remarked.
Have business processes evolved to keep up with these advancements?
Greg Smith conveyed a concern about this trend that cannot be ignored. He questioned, “In the last 20 years, we have seen unbelievable advancements in computing capacity and a complete explosion in data, where the amount of data customers produce is growing exponentially. Can we honestly say we have seen the business processes evolve to keep up with these advancements?”
Since 2009, more data has been collected than all years prior. Plus, in 2013, 15 billion devices were connected to the Internet. This forces companies to ask some hard questions: How long will it be until every machine, device, or sensor inside of an organization is seamlessly connected? How will we exploit that capability? For all its promise for making things better, can it hurt us, too?
As businesses innovate new technology and subscribe to the concept of Big Data and the Internet of Things, they can lose sight of possible societal implications. Smith cautioned, “Just because businesses can capture vast amounts of data about their customers, it doesn’t mean customers welcome it and accept it. Privacy and security matters cannot be underestimated as businesses evaluate use cases.”
Smith predicted, “In five years, everything will be connected – even our scales will talk to our refrigerators in the hopes of changing our mind about that extra piece of cake late at night. We will most likely always ask about the necessity of such connectedness, but, in reality, the cost will be low enough that someone is going to want it.”
To listen to a replay of this edition of the Future of Business with Game Changers series, presented by SAP Radio, click here.