There can be no doubt of the meteoric rise of the buzz surrounding big data. But do companies have data analysis projects underway and are they realizing value yet?
In a word, yes. At least according to a new survey of more than 50 executives representing leading Fortune 1000 companies like Aetna, American Express, Bank of America, General Electric and large federal agencies like the Pentagon.
Eighty-five percent of the respondents note that a big data initiative has been planned or is in progress, with almost half using big data in an operational capacity ranging from production reporting to 24/7 mission-critical applications, according to the survey by NewVantage Partners.
Surprisingly, given that big data gets its moniker because of the volume of data many companies are expected to be delving into with big data analytics, the respondents report that the most important goal and the potential reward of big data is the ability to analyze diverse data sources and new data types, not wrangling very large sets of data.
And although they’re still tackling various technical and skills availability challenges, all the respondents are looking for big data analysis to have a major impact on their businesses. Although over half don’t have ROI–driven business cases, 85% expect qualitative or quantitative benefits to business or IT performance.
In addition, 80% of the respondents see big data initiatives as reaching across more than one line of business or function. In all, 17 different business functions are named as driving big data initiatives. But the biggest opportunity in big data revolves around customer insights and customer experience.
But, companies overwhelmingly indicate that the real benefit of big data analysis comes from the ability to speed up the decision-making process.
“In order to achieve this goal, many of the firms interviewed have established a new business metric for measuring the value of their big data initiatives – time-to-answer (TTA),” according to a Harvard Business Review post about the study. “TTA reflects the speed by which executives can answer critical business questions and has become a common measure on Wall Street and among other leading firms. The Pentagon has established an equivalent metric known as Data-to-Decision, which is dramatized in the analyses conducted by the intelligence community in the Academy Award–nominated film Zero Dark Thirty.”
The HBR article goes on to note five steps companies that are represented in the survey have taken to bolster how fast they can make decisions using data analysis and, thus, gain value from their efforts:
- Identify the five most critical business questions. These questions should be manageable so executives can create and demonstrate an initial set of quick wins that provide the business value and can be used to justify expanding data analysis for other mission-critical questions.
- Create an analytical sandbox. “The idea of an analytical sandbox is that it enables a discovery process, by which executives can play with their data and experiment in an effort to discern new patterns and detect critical new insights. The Pentagon and intelligence communities employ discovery environments to analyze immense volumes of sensor data, from satellites and other telemetry, to identify national security threats,” according to HBR.
- Ask more frequent questions and refine them quickly.
- Validate the hypotheses. Use test-and-learn, a set of practices used to test ideas to a small number of customer segments to predict impact, then validate results before applying them to larger customer segments.
- Embed analytics into operational processes. “This enables companies to incorporate ‘new’ patterns and discoveries with ‘known’ algorithms that provide the background of their operational processes. As a result, companies are realizing value from big data establishing a dynamic environment that merges the ‘new’ and the ‘known’ to create a more intelligent and sophisticated decision-making infrastructure,” HBR notes.
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