The heaven or hell of Big Data

The heaven or hell of Big Data

You can hardly open a business publication, surf the web or attend a marketing conference without hearing about Big Data and its claimed benefits. Here's what we think.

The promise of unlimited customer insights, in real time, guiding every business decision, sounds like the answer to every business leader’s dream. And industry predictions are very bold. Gartner claims that ‘businesses adopting Big Data will outperform competitors by 20% in every financial metric’.

Is this likely to be true? Possibly.

Success stories of businesses using data to improve the business are well documented. However, Big Data in its present form is unlikely to be the panacea many are expecting. Remember CRM. This was the child of the first decade of the 21st century. It promised the tracking of individual customer behaviour to target specific products and propositions. But in reality most programmes failed because they focused too much on the technology and not on making the business truly customer-centric.

So, before you jump onto the Big Data bandwagon you have to separate the hype from reality. We have identified six challenges that currently limit the ability of businesses to turn Big Data into commercially useful insight and business value.

1. Context

The term Big Data suggests assembling many facts to create greater, previously unseen truths. It infers mathematical certainty - the idea that with larger data sets, we get closer to objective truth. But this is a false premise. Just because you have more data it does not mean it is more accurate or more insightful. Consider the example in 2012 of the 20 million Twitter messages about Hurricane Sandy. That may seem sufficient for a picture of whom the storm affected. But very few tweets came from Seaside Heights, a neighbourhood most affected by the Hurricane. The reason is not that the residents Tweet less than those of nearby Manhattan, but because of power cuts and flagging phone batteries. From the data, one could infer that Manhattan had taken the brunt of the storm, but we know this wasn’t the case. Imagine if the US government decided to target rescue efforts just on data from Twitter.

2. Data sources

Many companies struggle to get ‘good’ data, ‘okay’ data, or sometimes even ‘some’ data about their customers. Without the ability to extract data from your systems, you won't have much data to analyse. We have seen organisations where customer information is scattered across 20 or 30 databases. This is made worse when you add external data sources, such as Google Analytics, Facebook or Twitter into the mix. The dynamic nature of business today, with various restructures and mergers, only makes the problem worse. Indeed we are still in the very early days. Big Data requires new tools to query and report on the information. Any future for Big Data probably will require new data integration tools, new data mining tools, new reporting tools and new dashboards. Perhaps, this issue may one day be solved because of the investment being made by software companies in this area.

3. The technology trap

Having said that, Big Data is in danger of falling into the same trap as CRM with a focus on technology for technology’s sake rather than the usefulness of the data that comes out at the other end. Yes, you have to integrate data sources and design the right outputs, but do not lose focus on the actual data and what you wish to do with it. The simple truth is that technology, by itself, cannot create business outcomes. It can help people get tasks done; but without a broader look at how your organisation functions, what purpose it serves, and how the various parts inter-relate vis-a-vis the consumer, implementation of CRM or Big Data technology is unlikely to succeed.

4. Deriving insights

Just because you have all the data in the world does not mean you can find pearls of insight in it. Without the right thinking and the right context any data analysis can lead to the wrong conclusions. Remember the U2 song ‘11 O’clock Tick Tock’ with the words: ‘We thought that we had the answers, it was the questions we had wrong’. To generate the right insights from large amounts of data you must first ask the right kind of questions. Expecting Big Data to act as a customer crystal ball that spontaneously throws out serendipitous insights, will not yield anything of true value.

5. Acting on insights

There is a big gap between insight and action based on that insight. Most companies don't take time to fully understand or act on the customer feedback that is already readily available. Many businesses don't look at basic market research and consumer feedback to act on the insights that have been at their fingertips for years. Is your organisation willing and able to make changes to act based on the insights you could generate from a Big Data programme? Do you have an integrated implementation plan?

6. The data deception

Customers are human - they make emotional decisions which are often irrational. Being too focused just on data is a big risk. If Bill Gates acted on data alone, he would have never have created Windows. Will you give up your instincts? As the Harvard Business Review notes, ‘Human behaviour is nuanced and complex, and no matter how robust it is, data can provide only part of the story’. Desire, motivation and behaviour are influenced by psychological, social, and cultural factors that require context and conversation in order to understand. Data reveals what people do, but not why they do it.

So now what?

Should businesses ignore Big Data? Perhaps.

If you have the right data, the right technology, the right questions, the right way of creating insights and the right systems of implementation into action, then the answer is clearly yes. Big Data brings exciting possibilities to businesses and it would be a big mistake to not try to take advantage of it.

However, in reality we recommend three things:

First, don't get blinded by all the hype of the Big Data bandwagon. As with any new and fashionable initiative, if you go at it with an awareness of the challenges ahead, you are more likely to succeed. Maybe Big Success. Who knows?

Second, if you are looking for a place to start, begin with data sources you already have – transactions, web logs, customer feedback, etc. Don’t create new data just for the sake of it – you probably have more information than you realise. Use data which you already have and have experience of using. Look for information you already know how to use and act upon – it’s may just be a matter of looking at things differently and asking better or different questions to get the right answers.

Third, if you are thinking of using Big Data as a way to get customer insights, there may be an easier path that does not require expensive technology investment, consultants or project management. If you want to learn about your customers, talk to them. No amount of complex analysis will be able to express in a spreadsheet the emotions, problems and dreams in the mind of a customer that you can get in a personal conversation.

Online customer communities are perfect for this. The best part is that you can have an ongoing conversation with the same people over a period of time and hence see how their attitudes, motivations and behaviour change over time. If you would like try online communities to get really close to your customers now is a great time.

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