Missing Wood for Trees, Why Big Data Isn’t About the Big Data

Big Data is a hot topic of discussion these days and is on top of “To Do” list of senior executives of large and medium sized companies, many of whom have started investing in required infrastructure for leveraging Big Data.

While this is a good start, it is important to remember that Big Data isn’t about the Big Data. Yes, you read that correctly – Big Data isn’t about the Big Data, rather it is all about making better business decisions using the insights gained from analyzing structured and unstructured data that is available. If one focuses solely on “Big Data” and forgets the business context/how the data is going to be used, one is likely to miss wood for trees.

Instead of focusing on Big Data per se, how about starting with business problems that we are trying to solve, for example reducing customer defection/churn or improving cross-sell/upsell rates in CRM context or reducing inventory carrying costs in ERP context.

Once you have identified the problem to be solved, identify what structured and unstructured data are required for making better business decisions. This may include Social Media data for example besides ‘internal’ CRM data. Once you have identified the structured and unstructured data, internal and external to the organization, formulate a strategy on how the data is going to be used or analyzed and at what level of granularity. Only after this should one decide on what tools to use and make required investments in Big Data infrastructure and not other way around.

So don’t invest in Big Data infrastructure first not knowing what, why and how, and put cart before the horse. Rather identify a business problem to solve first, identify what structured and unstructured data are required for making better business decisions, develop a use case for Big Data, run a  successful pilot project and then invest in required Big Data infrastructure.

What do you think? Do you agree that Big Data Isn’t About the Big Data, rather it is all about making better business decisions using the insights gained from analyzing structured and unstructured data? Look forward to hearing your thoughts and comments:

 

 

Big Data: $16.9 Billion opportunity for IT Services and Consulting Industry

International Data Corporation recently released its “Big Data technology and services forecast” predicting that Big Data market will grow from $3.2 billion in 2010 to $16.9 billion in 2015, a compounded annual growth rate of 40% and “growth of individual segments from 27.3% for servers and 34.2% for software to 61.4% for storage”. So what is driving this growth in Big Data and how can IT Services and Consulting companies tap into this phenomenal growth opportunity of 40% CAGR, which according to IDC is “about 7 times that of the overall information and communications technology (ICT) market”?

As I indicated in one of my previous post titled Why Big Data Mining/Analytics is the New Gold RushBig Data is a key enabler for Social Business and without Big Data Mining/Analytics, a large or medium sized company can neither make sense of all the user generated content online nor can collaborate with  customers, suppliers and partners effectively on Social Media channels. And both these activities, namely gaining insights from user generated content online and collaborating with customers and partners are critical for success in the age of Social Media. Big Data provides the critical backbone for Social Business leveraging advances in Cloud Computing, Mobile Platforms, Social Media, Ubiquitous broadband internet, Gaming technology and Data Storage and Analysis.

Because of the business requirement of analyzing vast amount of ever changing structured and unstructured Big Data almost instantaneously, companies will be hard pressed to do this on their own. But given the fact that Big Data stored in cloud can be accessed from anywhere the internet is available and can be analysed almost instantaneously by third party service providers,  outsourcing companies can offer to their clients value added services in the area of Big Data analytics without heavy investments on the part of clients in specialized hardware and software as was the case with ‘traditional’ data analytics. This will bring down significantly costs (especially fixed costs) associated with building and maintaining analytics infrastructure and solution center. I expect all major IT Services and Consulting companies to invest heavily in building delivery capability in the area of Big Data/Analytics to tap into this opportunity.

Do you agree that Big Data is a great opportunity for IT Services and Consulting companies? Please do share your thoughts:

Why Big Data Mining / Analytics is the New Gold Rush

Just mention the words “Big Data” to any technology entrepreneur or investor and observe how his/her face lights up with excitement. Given the perceived opportunity in Big Data, tech entrepreneurs and investors want to capitalize on it by starting /investing in a Big Data Management, Mining and Analytics business. Is this perceived opportunity in Big Data for real or is it a bubble that will burst soon?

I think the perceived opportunity in Big Data is real and is here to stay as Big Data Mining/Analytics will fundamentally change the way business is done not only online but also offline. Here’s why: Big Data is a key enabler for Social Business and without Big Data Mining/Analytics, a large or medium sized company can neither make sense of all the user generated content online nor can collaborate with  customers, suppliers and partners effectively on Social Media channels. And both of these activities, namely gaining insights from user generated content online and collaborating with customers and partners on Social Media channels are critical for success in the age of Social Media.

Can you imagine any large or medium sized business without e-Business in the internet age? Similarly, it is impossible to run a large or medium sized business in the age of Social Media without leveraging user generated content or without collaborating with customers and partners. And for this to happen, Big Data Management, Mining and Analytics are critical/key enablers.

Being a key enabler and catalyst in Social Age, Big Data Management, Mining and Analytics companies are going to command a premium valuation and hence Big Data Mining and Analytics has triggered a new ‘Gold Rush‘, not to mine gold this time but something even more valuable – knowledge and insights.

What do you think? Do you agree that Big Data has triggered a new Gold Rush?

 

Big Data and Rise of Predictive Enterprise Solutions

Given the three Vs of Big Data, namely Volume, Variety and Velocity (read this for more), challenge before large and medium sized companies is how to unlock the potential of Big Data and productively leverage its value in running the business.

In “traditional” Data Analytics or Business Intelligence, focus is more on analysis and reporting of “historic” or past data stored in the database. Take for example how most organizations use data from their CRM or ERP applications. Almost all the reports that are generated pertain to past or “historic” information. Running a business based on “historic” or past data is like driving a car looking in the rear view mirror and is not going to work.

Instead, companies must analyze all the available information in real time, apply statistical modeling techniques to available information in order to predict future outcomes and take action/run the business based on predicted outcome rather than analysis of historic data as is being done currently.

Since Big Data is characterized by not only Volume, but also Velocity and Variety, it is very important that Big Data is used for analysis in real-time to predict the future and take corrective action based on that analysis. How about using Causal Path analysis on Social Media data (like Twitter and Facebook) to predict Churn or Customer Attrition in Telecom industry and taking corrective action to prevent Churn/Attrition rather than analyzing “historic” attrition rate, call volumes or average response time as being done currently. The real value is in using predictive analytics and taking corrective action before it is too late, rather than just reporting historical information.

Techniques like Multiple-regression analysis coupled with Factor analysis, Cluster analysis and Causal Path analysis can be used very effectively with Big data – now that we have many variables and multiple observation for each variable at a customer level to generate statistically significant difference in analysis.

In future, no ERP or CRM system will be complete without Predictive Analytics functionality that will enable companies take preventive steps (rather than reactive) in real time. For example, rather than analyzing “historic” attrition rates, Predictive CRM application will make it possible for companies to identify critical incidents leading to customer attrition so that steps can be taken to retain the customer before he/she defects.

And thanks to Predictive Analytics, ERP or CRM applications will no longer be just a repository of “historical” information but will be transformed into a Predictive Knowledge base or Engine driving business decisions looking forward and not backwards/in the rear view mirror of “historic” information.

What do you think? Do you agree that Big Data will result in rise of Predictive Enterprise Solutions? Please do share your thoughts.

Big Data: Will Open Source Software Challenge BI & Analytics Software Vendors

Predictive Analytics has been billed as the next big thing for almost fifteen years, but hasn’t gained mass acceptance so far the way ERP and CRM solutions have. One of the main reason for this is the high upfront investment required in Software, Hardware and Talent for implementing a Predictive Analytics solution.

As a result, only a handful of very large enterprises such as mega banks or top telecom companies have made the required investments and have benefited from power of Predictive Modeling and advanced Statistical techniques that are in existence for well over five decades. Most of the other companies have not been able to levarage power of business analytics as they cannot afford investing in specialized harware, database and BI/Analytics software applications being marketed by enterprise software vendors such as SAS and Teradata.

Well, this is about to change – thanks to technologies such as Apache Hadoop (which supports Big Data distributed applications under a free license), HBase (an open source, non-relational/distributed database) and the freely available R programming language (which is part of the GNU project). Using R, HBase and Hadoop, it is possible to build cost-effective and scalable Big Data Analytics solutions that match or even exceed the functionality offered by costly proprietary solutions from leading BI/Analytics software vendors at a fraction of the cost. And since R programming language is a freely available Open Source Software, users can leverage work done by others for specific analytics functionality and don’t have to re-invent wheel by rewriting the code. This reduces cost of developing analytics solution significantly.

Established BI and Analytics software vendors have no option other than offering their solution under SaaS (Software as a Service) model so that it is cost effective for their customers to implement analytics solution without requiring large upfront investment. This is all the more important for Big Data as the field is evolving rapidly. And if any BI or Analytics software vendor fails to adapt to this changing technological environment, they risk losing their market share.

 

Big Data Analytics a Key Enabler for Social CRM – Airlines Case Study

Big Data Analytics is a hot topic of discussion these days. But many feel that it is more of a “hype” and less of substance. In my opinion, Big Data Analytics is the real deal and if used correctly, can deliver great business results at a fraction of cost compared to other alternatives.

Here’s a simple yet very effective example of using analytics for understanding consumer attitudes towards airlines in real time. In this study, Jeffrey Breen has used the R programming language to analyze consumer sentiments about major U.S. airlines expressed on Twitter. For more on the methodology and results, see the following embedded Slideshare presentation (if you cannot see the embedded file, click here to view it on Slideshare website).

As you can see on slide no. 27, the twitter sentiment scores obtained  for many of the airlines are “comparable” to results of The American Customer Satisfaction Index (ACSI). What is important to note here is that by analyzing few tweets using freely available R programming language (which is part of the GNU project), it is possible to achieve results similar to that of an elaborate and expensive market research study such as ACSI at a fraction of a cost, that too in real time. Isn’t that a game changer?

Now imagine using Big Data Analytics to analyze Social Media data – not only text data but also pictures, video, GPS , Social Graph/Social Media linkages and using that information for engaging customers on Social Media channels. That in my opinion is the ‘holy grail’ (if I may use that term) of Social CRM.

In one of my earlier post, I have defined Social CRM as the business strategy of engaging customers through Social Media with goal of building trust and brand loyalty. Big data analytics is a key enabler for engaging customers on social media channels for building trust and loyalty (Social CRM). What do you think?

Why Big Data Analytics is The Next Big Opportunity for Outsourcing Companies

Big Data Analytics is making big headlines these days. Just check out a few from recent past:

So what is Big Data and why it is in the news so much these days?

According to Philip Russom, Director of TDWI Research, Big Data has three defining attributes – three Vs as he calls them. They are Data Volume, Data Variety and Data Velocity and together they constitute a comprehensive definition of Big Data. So Big Data is not just about Data Volume, but also the variety of data (mostly unstructured) and the velocity with which the data is generated and need to be analyzed. (for more, check out following posts by Philip Russom and the TDWI Best Practices Report titled Big Data Analytics):

Given three Vs of Big Data, ‘traditional’ data storage, retrieval and analytics methodologies are no longer going to work. Cloud Computing is going to play a key role when it comes to Big Data Management and Analytics. And here in lies the opportunity for Outsourcing companies.

Traditionally, data collected by organizations is ‘safely’ stored in massive relational database accessible to only few within the organization and requires elaborate infrastructure both in terms of hardware and software for storage, retrieval and reporting/analytics. In such an environment, it is not possible to easily outsource Data Analytics function/processes alone given the heavy investments made in terms of hardware and software.

Because of the business requirement of analyzing vast amount of ever changing structured and unstructured Big Data almost instantaneously, companies will be hard pressed to do this on their own. But given the fact that Big Data stored in cloud can be accessed from anywhere the internet is available and can be analysed almost instantaneously by third party service providers,  outsourcing companies can offer to their clients value added services in the area of Big Data analytics without heavy investments on the part of clients in specialized hardware and software as was the case with ‘traditional’ data analytics. This will bring down significantly costs (especially fixed costs) associated with building and maintaining analytics infrastructure and solution center.

Just to give an example in the area of Social CRM, Social Media has empowered customers like never before as they can discuss about brands/products on Social Media channels. The best any marketer can do is to Listen, Learn and Engage customers. Given the three Vs of Big ‘Social’ data and the fact that most of the user generated content resides in the cloud, outsourcing companies can offer cost effective analytics solution to their clients to enable them effectively engage their customers/prospects in real time.

What do you think? Do you agree that Big Data Analytics is The Next Big Opportunity for Outsourcing Companies? Look forward to hearing your thoughts and comments:

3 New Year’s Resolutions that should be on Every CEOs List for 2012

After Outcry, Verizon Abandons $2 Fee” screams a headline from today’s online edition of the New York Times. And the article makes it very clear that Social Media played no small role in telecom giant’s hasty retreat from levying a new $2 fee on bill payments. This story is a harbinger of things to come in 2012 and CEO and CMO of every large and medium sized company should pay attention to it.

As I explained in my previous post titled 2012: Year of Empowered and Assertive Digital Customer, thanks to Mobile, Tablet computing and Social Networking revolutions, customers are empowered like never before and they are leveraging technology not only for shopping online, but also for highlighting poor customer service experiences. This growing trend of empowered and assertive customers leveraging technology for connecting with other like minded individuals to share their experience about products and services will be the big story of 2012.

In order to make sure that 2012 doesn’t become a year of Social Media disasters or  Social CRM crises, CEOs and CMOs of large and medium sized companies should include following three new year resolutions on their 2012 list:

1. Improve collaboration within the enterprise and invest in collaboration tools

2. Listen to what customers/prospects are saying on Social Media channels and learn from it

3. Empower employees to engage customers/prospects on social media channels and invest in customer collaboration platform

How important are these to the survival and growth of business? In my opinion, these are as important as resolving to lose weight for someone who may suffer a heart attack if he/she doesn’t lose weight, or as important as bringing debt/expenses under control for someone who may face financial ruin or bankruptcy otherwise.

One may argue that these doesn’t apply to leading companies or brands that enjoy dominant position in their market. Well, think again. It doesn’t take long for assertive customers, empowered by social media to drive home their point of view. If you want proof, look no further than Netflix or GoDaddy in this regard. So as I said, better to lose weight than suffer a heart attack and better to control expenses/debt than face financial ruin.

Dear CEOs and CMOs, are you listening? Wouldn’t you include these three New Year’s resolutions to your 2012 list?

 

 

2012: Year of Empowered and Assertive Digital Customer

Sunset

As 2011 comes to an end and as we look forward to celebrating New Year 2012, one thing that strikes most looking back is the massive increase in ownership and usage of Smartphones and Tablet computers.

Just consider following headlines in the last few days:

“On Christmas day alone, a total of 6.8 million iOS and Android devices got activated around the world, a 353% increase from Christmas 2010″ (for more, see this link)


“Consumers have spent a record $35 billion online shopping this holiday season” (for more, see this link)


“Apple’s iOS accounted for a whopping 13.4% of Online Sales on Christmas Day” (for more, see this link)


“According to a recent report, Facebook reached more than half of global audience in October 2011 and accounted for 1 in every 7 minutes spent online around the world and 3 in every 4 social networking minutes” (for more, see this link)

 

These are just a few headlines I came across during last few day of 2011. And they all points to the fact that thanks to Mobile, Tablet computing and Social Networking revolutions, customers are empowered like never before and they are leveraging technology not only for shopping online or scoring great bargains, but also for highlighting poor customer service experiences.

This growing trend of empowered and assertive customers leveraging technology for connecting with other like minded individuals to share their purchase intentions and experiences about products and services will be the big story of 2012.

Questions is how many companies are listening to customers, learning from it and engaging them? Not many. So if 2012 is going to be the year of Empowered and Assertive Digital Customer and if companies are not ready for it, we can also say that 2012 is going to be the year of Social Media disasters and Social CRM crises, and many companies will learn the Social CRM lesson hard way. And that will spur investment not only in Social CRM, but also Enterprise Collaboration Platforms, Mobile engagement platforms and Data Analytics.

What do you think? Do you agree that 2012 is going to be the year of Social Media disasters and Social CRM crises? Please do share your thoughts:

(Picture courtesy: Beautiful sunset in Dallas, Texas as seen from my apartment)

FedEx learns Social CRM lesson, the hard way!

Here’s an excellent example of the importance of responding to a Social Media crisis before it is too late. On December 19th, 2011, a YouTube user (username “goobie55″) uploaded video of a FedEx delivery person throwing a video monitor into his/her yard.

This YouTube video has created a Social Media storm of sorts and as I write this post, it has been viewed 3,576,412 times for this one YouTube post alone. I have seen it on my local TV news too here in Dallas, Texas.

Well, before it was too late (remember United Breaks Guitars YouTube video), FedEx  posted its own response to customer’s video with the following statement by Matthew Thornton III, Senior Vice President, US Operations, FedEx Express:

“Along with many of you, we’ve seen the video showing one of our couriers carelessly and improperly delivering a package the other day. As the leader of our pickup and delivery operations across America, I want you to know that I was upset, embarrassed, and very sorry for our customer’s poor experience. This goes directly against everything we have always taught our people and expect of them. It was just very disappointing.”

(YouTube video response by FedEx embedded below):

This incident of Social Media brand crisis underscores the importance of having a Social Media Crisis Management Plan. It should clearly highlight roles and responsibilities, procedure and protocols to be followed in the event of a brand crisis. Because the first step in solving any crisis is to identify and respond to it, and respond FAST when it comes to Social Media as FedEx seems to have done here. What do you think?