Big Data & Analytics Heroes
Kenneth Cukier, data editor at The Economist magazine and co-author of book Big Data: A Revolution That Will Transform How We Live, Work, and Think, is this week’s Big Data and Analytics Hero. Kenneth insists that “the strategy is not the answer, but the data is, in a constant feedback loop. The data informs us of the best course of action.”
Should tomorrow's generation acquire analytics skills no matter the degree? Why or why not?
There is a new form of literacy emerging, a “big data literacy” of looking at the world in a way that is quantifiable and knowable in new ways to make society more efficient. To be productive in modern times, I do believe that everyone should have a basic familiarity with statistics, computer coding, big data and analytics. So many aspects of life will be based on it (like the computing revolution of a generation ago) that it is imperative for people to have a fundamental grounding in it. Statistical literacy will be as important as numeracy was in the past. Just as all business people have to know how to type, so too they will have to understand analytics and big data to be useful employees.
How are big data and analytics changing business strategy?
Business strategy used to be about thinking through market conditions in advance and devising a plan of action, so that managers could execute with the corporate objectives in mind. But this approach no longer works very well. First, the cycle times of business are now much shorter. Second, with data, we can measure the effectiveness of what we, and our rivals, do.
So the idea of strategy changes—competitive success now moves to the level of tactical execution rather than premeditated design. That is, we need to test and learn in a climate of extreme agility. The strategy is not the answer, but the data is, in a constant feedback loop. The data informs us of the best course of action, not a grand plan based on lots of assumptions.
For example, advertising executives used to measure the effectiveness of ads several months after a campaign ended. Now they can track effectiveness and take action in real time. Many other industries are undergoing this same shift.
What are the biggest challenges with getting started with big data and analytics?
The biggest challenge is not technology but mindset. When we use big data, we humble ourselves: all of our experience and judgment, though useful, gets challenged and sometimes turned upside down. We realize that we know far less than we believe we do. So big data forces us to think in new ways and conceive of our jobs and our roles as professionals in new ways. In the end, HR executives, marketers, chief financial officers, COOs and the like have to place their trust in data, not just in their inklings and gut feelings. And that marks a change in mindset most of all.
What is the market still missing for big data and analytics to really deliver ROI?
Big data and analytics is already delivering huge gains in ROI, but it’s not always captured in the corporate accounts. Take a company whose HR department used data to discover that the best job candidates to call back for a second round of interviews are those who have played a musical instrument. It’s not that these candidates are hired, necessarily, but this information does make the decision of who to consider for the position a much more efficient process. The usefulness of this is massive, though it is hard to quantify in the classic ROI metric. Yet it certainly represents a return on investment.
Because big data is new, the value of the findings that are uncovered may not fit into the classic categories that companies use to measure performance. But no one should doubt the benefits. It’s like the famous quip by the Nobel economist Robert Solow in 1987: “You can see the computer age everywhere, but in the productivity statistics.” Likewise, ROI may not easily capture big data’s impact, but common sense can.
Do you think big data and analytics will handle the data growth in 10–15 years or would we need another shift in technology? Why?
Analytics will absolutely be able to handle the growth—that’s the whole point of the technology. Importantly, the system improves when more data is added, because there are more observations from which to learn. Sensors, the Internet of Things and computer technologies over the next 10 or 15 years will make analytics more efficient, just as faster chips and broadband over the past decade improved the performance of today’s gadgets. Yet big data technologies will improve as other technologies evolve. So we should be fine—big data and analytics technologies can handle the growth of data. And we’ll still call it big data!
Cukier is an international bestseller translated into 20 languages. He is working on a new book on AI and business strategy. More info and speeches are at www.cukier.com