Fatuzzo Books Blog

Big Data: An Exploding Agent of Change

by Carol L. Fatuzzo and Ennio Fatuzzo

Today, thanks to the internet, many kinds of data (Variety) are being sent, received, and accumulated at unprecedented rates (Velocity) in unprecedented quantities (Volume). So, how can we manage this rapidly increasing amount of data and benefit from them? How can we discover hidden patterns and reveal unknown correlations?

Storing such massive quantities of data is only the beginning. To be useful we also must be able to access and analyze them rapidly and reliably. Following is an excerpt from our latest book, “Creating New Superstars,¹” which addresses this opportunity.

BIG DATA AND BUSINESS ANALYTICS

“Business analytics refers to “the extensive use of data, statistical and quantitative analysis, explanatory and predictive (computer) models, and fact-based management to drive decisions and actions.² The rapid development and adoption of advanced business analytics technologies is already altering the business landscape.

Big data refers to data sets too large for traditional data processing. These data sets have the potential for “huge new benefits—but also heartaches.³ The explosive emergence and availability of such huge, fast-changing, unstructured data from various old and new sources, mostly external to a business, and attempts to analyze them, has created the “age of information” ― an age where knowledge is power. But in many companies these unwieldy data sets have also created an “analysis bottleneck” that limits their usefulness.

But now it is possible to combine big data with advanced business analytics. Unparalleled and real-time access to vast quantities of data and the ability to rapidly analyze them in meaningful ways are already realities. Business management is being challenged with the rapidly growing technical capability of harnessing the vast potential that is hidden in multiple sources of massive data/information.

Today many companies already are analyzing big data to achieve significant competitive advantages―to improve products and services, cut costs, attract repeat customers, and more. An IBM Global Business Services Executive Report documents several big successes: “Companies like McLeod Russel India Limited completely eliminated systems downtime in the tea trade through more accurate tracking of the harvest, production and marketing of up to 100 million kilos of tea each year. Premier Healthcare Alliance used enhanced data sharing and analytics to improve patient outcomes while reducing spending by $2.85 billion. And Santam improved the customer experience by implementing predictive analytics to reduce fraud.⁴

Still embryonic though, are advanced analytical methodologies that can be applied to big data to build useful models for predicting and optimizing future outcomes. Such tools would enable leaders to make better decisions and make them faster and with lower risk; and might even help scientists make fundamental discoveries. This is the promise of the emerging field of data science, the marriage between big data and advanced analytics, the former providing the information, the latter supplying the tools that can be applied to that information to develop insight and guide action.⁵ However, there is one giant caution for business leaders. Big data and analytics, no matter how sophisticated and expertly used, will not replace or necessarily even predict disruptive innovations. Analyzing the past and extrapolating to the future is not likely to accurately predict a future shaped by unparalleled disruptive and exponential change.”

A CAUTION AND A CONCERN

There is no question that the future benefits arising from the combination of big data and advanced analytics will be immense, but not everything is positive. For example, even with advances in analytics technology, including artificial intelligence, keep in mind the caution expressed above:

“Analyzing the past and extrapolating to the future is not likely to accurately predict a future shaped by unparalleled disruptive and exponential change.”

And for those who worry that big data collection may infringe into their privacy: Yes, large companies and organizations already have access to a lot of personal data and are using it. On the positive side, this is already leading to things such as improvements in healthcare outcomes and understanding new market trends for better business management.

But it is an entirely different situation when governments enter the arena. A number of articles have been written about “big data” in the hands of government evolving into “big brother.”  A recent article in the Economist entitled “China invents the digital totalitarian state: The worrying implications of its social-credit project⁶” illustrates a concerning example.

The article describes a data collection and analysis project being run by the Chinese communist party to develop what they call a “social-credit system.” To summarize, using “big data” technologies, the project’s objective is to develop a system to collect and categorize as “good” or “bad” all available information for each individual citizen. Ultimately, rewards for good behavior (e.g., prizes, better housing) and punishments for bad behavior (e.g., denial of permissions to travel or access to loans and services) would be handed out – all this aimed at improving the allegiance of citizens to the State.

Will China be successful? How far will other governments go towards using big data to become “big brother” watching over each citizen? Certainly valid concerns. However, keep in mind that every breakthrough new technology has the potential for both good and bad. It all depends on the intentions of those who develop and apply the technology.

1. Ennio Fatuzzo and Carol L. Fatuzzo, Creating New Superstars: a Guide to Businesses that Soar above the Sea of Normality (USA: September 2016)
2. Thomas H. Davenport and Jeanne G. Harris, Competing on Analytics: The New Science of Winning (Boston: Harvard Business School Press, 2007), 7.
3. “Data, data everywhere,” The Economist, Feb 25th 2010, http://www.economist.com/node/15557443.
4. Michael Schroeck, Rebecca Shockley, Dr. Janet Smart, Professor Dolores Romero-Morales, and Professor Peter Tufano, “Analytics: The real-world use of big data,” IBM Global Business Services Executive Report, IBM Institute for Business Value (2012), accessed June 27, 2016, http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-big-data-at-work.html.
5. Foster Provost and Tom Fawcett, “Data Science and its Relationship to Big Data and Data-Driven Decision Making,” Big Data, 1, no. 1 (March 2013), 51-59, http://online.liebertpub.com/doi/pdfplus/10.1089/big.2013.1508.
6. “China invents the digital totalitarian state: The worrying implications of its social-credit project,” The Economist, Dec 17, 2016, http://www.economist.com/news/briefing/21711902-worrying-implications-its-social-credit-project-china-invents-digital-totalitarian