In Shanghai, on a sidewalk near the Shanghai City Museum, a shoeshine man, kit slung over a shoulder, a plastic bottle of white goop in a hand, looks passing pedestrians up and down, a head-to-toe sizing up. Making eye contact, he moves in close, extending his arm and pointing the plastic bottle at my feet. But I am wearing open-weave sandals and do my best air drawing of how the white goop would get between the straps, on my skin. I also drag my toes (closed) on the sidewalk, hoping to indicate that these sandals aren’t worth a shine. Unimpressed, the man wags his finger. “Don’t try to fool me, pal.” I start to walk away, but he points to my shoes. I look down to see that, in the few seconds we’d been eyeing each other so intently, he had very artfully squirted the goop on my sandals – in the process hitting nothing but leather. I smiled at his sleight of hand, and could do nothing but look down, admiringly, and watch him finish the job.
The shoeshine man may be one of the very few businesspeople that have no use for Big Data. Because everywhere and in every business conceivable, it seems, Big Data is enabling better decision-making, driving differentiation and innovation, and generating value. In the past 3 years or so, the creep of Big Data has turned into a torrent. Retailers, restaurateurs, healthcare providers, global shipping giants and all manner of public organizations are mining, sifting and analyzing Big Data to discern patterns and inform their decisions. Retailer Williams-Sonoma uses Big Data to better target emails, claiming that the messages result in a response rate that is 10-18 better than emails that don’t rely on Big Data. Healthcare provider, Kaiser Permanente, used Big Data to support its claim that the pain-reducing drug, Vioxx, caused blood clots and heart attacks, ultimately leading to the drug’s withdrawal. Big Data based research of several social networking sites has shown – of all things — that the best tips on job openings come from people that you may know but don’t communicate with often. Big Data even helps political parties trace how blog postings swell into a popular movement. And across the world, police forces are using Big Data to identify and act on emerging patterns in domestic abuse.
The smart and strategic use of Big Data began – arguably – with the 2004 publication of Moneyball, Michael Lewis’ description of how the general manager of the Oakland Athletics mined heretofore arcane data to discover and trade for players who were considered underachievers but who, because they had a particular, unappreciated skill — and relatively low salaries – could help the moribund Athletics become competitive. Very soon, forward-looking CEOs began to see how Big Data could boost their own firms’ performance. For a company looking to gain an edge, Big Data had the potential to be the new, new thing.
Today, according to Oracle Corporation, 77 percent of the organizations it surveyed use industry-specific applications or software to help leverage information to make strategic decisions. (The survey was based on the responses of 333 C-Suite executives from U.S. and Canadian mid-sized and large companies in 11 industries). The biggest data growth areas are customer information, operations, and marketing. But the survey’s biggest finding is the fact that a solid majority of executives give their organizations low marks for distributing timely information and translating data into actionable intelligence. In fact, most executives believe that their company is losing revenue because of its inability to fully leverage the data that are collected. In fact, 67 percent say that the ability to draw intelligence from their data is a top organizational priority. What gets measured must get managed…better.
It’s hard to look at what Big Data can do and not see that it is the new, new thing for entrepreneurs, executives and managers. In a major report, the authors of McKinsey & Co.’s Global Institute write that “Our research suggests that the scale and scope of changes that Big Data are bringing about are at an inflection point, set top expand greatly, as a series of technological trends accelerate and converge.” The lead article in this issue of the Ivey Business Journal is based on the report. We hope you enjoy reading it and the other articles in this issue.