While the digital divide was once determined by those who had new economy skills and those who did not, a new digital divide is emerging: a gap between firms that can use data to create value and those that cannot.
The gap is being fueled by a dearth of data scientists and others trained in data analysis, and the stakes for companies to wrangle big data to compete are growing, according to recent Forbes blog post.
Companies like Facebook and Google were built on data from their inception.
But today, companies that are built on more traditional business practices must embrace principles like ongoing experimentation and launching new products and services quickly and then striving to continually improve them – practices of companies that were born digital.
To do this, companies must identify and hire employees with the mix of skills that big data demands.
This new breed of workers needs a unique combination of skills including programming, designing algorithms, visual communication and collaboration, AnnaLee Saxenian, dean of U.C. Berkeley’s School of Information, tells Forbes.
Companies that are digital natives and those that are not are mainly separated by how they approach strategy, the article notes.
“Legacy firms tend to undertake expensive research in order to gain a deep understanding of the marketplace,” according to the post. “Then highly paid strategists spend months interpreting the data, decide what it means and suggest a course of action.”
In contrast, companies like Amazon and Google run thousands of experiments to simulate online consumer behavior to determine strategy.
Companies that embrace a data-driven approach can gain footholds against their competitors, notes James Manyika, a director at McKinsey’s technology practice.
Even “very small players, especially in healthcare, are able to take advantage of data sources that have opened up,” he says. He suggests that managers think of proprietary, public and purchased data to create new business models.
“In almost every case, someone from the top drives it,” he adds.
But while the stakes are high for companies to leverage big data in today’s volatile business landscape, challenges still remain.
Brand Velocity, a consulting practice that advocates the philosophy of Peter Drucker – who coined the term “knowledge worker” and invented the concept of managing by objectives – notes that companies are still struggling to exploit Drucker’s knowledge-worker productivity vision after more than 25 years.
Adding big data to the mix only exacerbates this struggle, the firm notes.
“Indeed, the biggest big data challenge at the moment does not stem from the science but, rather, from how we’re struggling to have art and science come together through human beings,” according to the post.
“Today’s biggest struggle is the need for companies to productively integrate what business people know with what data scientists know, to generate insights that can help companies make a meaningful difference,” notes Upendra Belhe, senior vice president and chief enterprise business analytics scientist at Chubb Insurance, in the post.
The post highlights three common misunderstandings surrounding big data:
- Executives assume analytics are worthy regardless of the organization’s ability to make decisions based on data analysis
- Managers underestimate the need to tailor their companies’ systems to match their structures and cultures
- Companies are mistakenly convinced that big data experts can add value without collaborating with those front-line workers who are using the data for decisions
“As Drucker taught, there is a huge difference between a piece of information that is merely thought provoking and one that can actually lead to action,” the post notes. “Being actionable requires integration – with a clear strategy, excellent industry and company knowledge, good data quality, and business and data experts who are committed to learning from one another.”
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