‘Big Data’ is having its 15-minutes of fame. It is the hot term referring to the increasingly large datasets of information being amassed as a result of our social, mobile, and digital world. In the past 12-months, the use of the term in the U.S. has increased 1,211% on the internet.
Lack of data is not the issue. Lack of strategy is.
IBM estimates that every day 2.5 quintillion bytes of data are created – so much that 90% of the data in the world today has been created in the last two years. It is mind-boggling. The irony is we have more information available, but we feel less informed.
Bridging the gap between big data and big strategy starts with effectively framing the problem. If you have read Moneyball (Lewis; Norton) or seen the movie, you witnessed the power of big data – it is the story about the ability to compete and win with few resources and limited dollars. This sums up the hopes and challenge of business today.
The Oakland A’s did it in baseball, but some companies have their own Moneyball story. In the thought-provoking book Scoring Points (Humby, Hunt, Phillips; Kogan Page), the authors discuss how Tesco, the UK-based grocer, analyzed customer purchase behavior to redefine their brand, drive loyalty, and fuel rapid growth. In SuperCrunches: Why Thinking-by-Numbers Is the New Way to Be Smart (Ayres; Random House), the authors show how number- crunching affects you in ways you might never imagine. Recently, the New York Times Magazine ran a fascinating article “How Companies Learn Your Secrets”, discussing how Target Corporation studies consumer habits and data to drive explosive sales.
These examples illustrate the potential of big data – being smarter with the right resources. Success in doing so is becoming a reality with faster information, better modeling and cheaper computing power. A small army of consultants are amassing to help analyze the large datasets. In a study by McKinsey’s Business Technology Office and MGI the firm calculated the U.S. faces a shortage of 140,000 to 190,000 people with analytical expertise and 1.5 million managers and analysts with the skills to understand and make decisions based on the analysis. I want to emphasize this last point — the biggest gap is the lack of skilled managers to make decisions based on analysis by a factor of 10x.
Growing talent and building teams to make analytic-based decisions is the key to realizing the value of big data.
One of the most effective ways to start building these capabilities on your team is the “IWIK” discussion. The concept is based on asking a simple but powerful question: ‘I wish I knew’ (IWIK). The question is a catalyst for a brainstorming discussion to identify wants and needs with respect to big data. IWIK will uncover the strategic, essential questions that can be answered through big data. It will define the indispensable information you need to move forward.
Identifying and answering the relevant IWIKs for your business will enable you to become smarter along two paths: avoid getting lost in big data, and using the right data to discover the real wants and needs of your customers. In the new reality of big data, hyper-competitive businesses are linking and labeling perception information, transactional data and layering in social behaviors and then using the IWIK to define the data rails to shape analytic-based decisions. Therefore, the focus should be less on ‘big’ data and more on ‘essential’ data.
What is your IWIK?
Christopher J Frank is Vice President in Global Marketplace Insights at American Express. He is co-author of Drinking From the Fire Hose: Making Smarter Decisions in a Data Overloaded World.