The Digital Enterprise
Big Data and Analytics Lead the Way!
Thomas H. Davenport
Babson/MIT/Harvard
December 5, 2013
The Digital Enterprise
Key Capabilities
•

Efficient, fast transactions

•

Agile system development

•

IT-enabled proces...
Working wonders for
Google, eBay, & LinkedIn
…but what about
everyone else?
Big data begins at
online firms
& startups

No...
“Big Data in Big Companies” Study
• How new? “Not very” to many –continually
adding data over time
UPS – Started building ...
Analytics 1.0
Traditional Analytics
•
•

Internally sourced, relatively small, structured data

•

1.0

Primarily descript...
Analytics 1.0
Data Environment
ERP

Reporting

CRM

OLAP

Legacy

Ad Hoc

3rd Party Apps

Modeling
Analytics 1.0
Other Technologies
•

Spreadsheets

•

BI and analytics “packages”

•

ETL tools

•

OLAP cubes

•

On-premi...
Keep inside the
sheltering confines of
the IT organization
Take your time—
nobody’s that interested
in your results anyway...
Analytics 2.0
The Big Data era
•

•

2.0

Complex, large, unstructured data about
customers
New analytical and computation...
2.0 Data Products
From Online Firms
• Google—Search, AdSense, Books, Maps, Scholar, etc., etc.
• LinkedIn—People You May K...
Analytics 2.0
Data Environment
Web Logs

HDFS

Images & Videos

Operational
Systems

Social Media

Docs & PDFs

Map/Reduce...
Agile is
too slow
We need to
be “on the
bridge”

We’re
changing
Consulting = the world
dead zone
Analytics 3.0
Fast, Pervasive Impact in the Age of Smart Machines
•

•

3.0

Analytics used for data products and Industri...
Analytics 3.0
Competing in the Data Economy
• Every company – not just online firms – can create data and
analytics-based ...
Analytics 3.0: Data Types
Articles

• Customer profiles
• Organization
contacts
• Billing
• Marketing
• Contracts/orders
•...
Analytics 3.0
Data Management Choices
Analytics 3.0
Technology & people
•

Heavy reliance on machine learning

•

In-memory and in-database analytics

•

Integr...
Procter & Gamble 3.0
176 years old

•
•

Primary focus on improving management
decisions at scale

•

“Information and Dec...
GE 3.0
120 years old
•

$2B initiative in software, analytics, and
“Industrial Internet”

•

Primary focus on data-based p...
Ford 3.0
110 years old

•

Bill Ford: “The car is really becoming a rolling
group of sensors.”

•

Ford’s Digital Analytic...
Recipe for a 3.0 World
1.

Start with an existing
capability for data management
and analytics

2.

Add some unstructured,...
Implications for
Software/Services Providers
•

Need to embed analytics into other systems

•

May be role for ongoing mon...
Thank you!
tdavenport@babson.edu
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NASSCOM ILF 2014: The Digital Enterprise - Big Data and Analytics Lead the Way: Thomas H. Davenport, International Institute for Analytics

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NASSCOM ILF 2014: The Digital Enterprise - Big Data and Analytics Lead the Way: Thomas H. Davenport, International Institute for Analytics

  1. 1. The Digital Enterprise Big Data and Analytics Lead the Way! Thomas H. Davenport Babson/MIT/Harvard December 5, 2013
  2. 2. The Digital Enterprise Key Capabilities • Efficient, fast transactions • Agile system development • IT-enabled processes • Knowledge management • The ability to make sense of exabytes of data: analytics! • Ranked the #1 priority at WSJ CIO Summit last week
  3. 3. Working wonders for Google, eBay, & LinkedIn …but what about everyone else? Big data begins at online firms & startups No technical or organizational infrastructure to co-exist with Findings show evolution of a new analytics paradigm What happens in 20 big companies when analytics are well-entrenched?
  4. 4. “Big Data in Big Companies” Study • How new? “Not very” to many –continually adding data over time UPS – Started building telematics capabilities in 1986 • Excited about new sources of data, new processing capabilities • Familiar rationales for big data: Same decisions faster – Macy’s, Caesars Same decisions cheaper – Citi Better decisions with more data – United Healthcare Product/service innovation – GE, Novartis • Need new management paradigm
  5. 5. Analytics 1.0 Traditional Analytics • • Internally sourced, relatively small, structured data • 1.0 Primarily descriptive analytics and reporting “Back room” teams of analysts • Internal decision support focus • Slowly-developed models
  6. 6. Analytics 1.0 Data Environment ERP Reporting CRM OLAP Legacy Ad Hoc 3rd Party Apps Modeling
  7. 7. Analytics 1.0 Other Technologies • Spreadsheets • BI and analytics “packages” • ETL tools • OLAP cubes • On-premise servers • Out-of-database/memory analytics
  8. 8. Keep inside the sheltering confines of the IT organization Take your time— nobody’s that interested in your results anyway Focus on the past, where the real threats to your business are
  9. 9. Analytics 2.0 The Big Data era • • 2.0 Complex, large, unstructured data about customers New analytical and computational capabilities • “Data Scientists” emerge • Online and startup firms create data and analyticsbased products and services
  10. 10. 2.0 Data Products From Online Firms • Google—Search, AdSense, Books, Maps, Scholar, etc., etc. • LinkedIn—People You May Know, Jobs You May Like, Groups You May Be Interested In, etc. • Netflix—Cinematch, Max, etc. • Zillow—Zestimates, rent Zestimates, Home Value Index, Underwater Index, etc. • Facebook—People You May Know, Custom Audiences, Exchange
  11. 11. Analytics 2.0 Data Environment Web Logs HDFS Images & Videos Operational Systems Social Media Docs & PDFs Map/Reduce Data Warehouse Data Marts & ODS
  12. 12. Agile is too slow We need to be “on the bridge” We’re changing Consulting = the world dead zone
  13. 13. Analytics 3.0 Fast, Pervasive Impact in the Age of Smart Machines • • 3.0 Analytics used for data products and Industrialized decision processes A seamless blend of traditional analytics and big data • Analytics integral to all business functions • Rapid, agile insight and model delivery • Analytical tools available at point and time of decision • Analytics are everybody’s job TODAY
  14. 14. Analytics 3.0 Competing in the Data Economy • Every company – not just online firms – can create data and analytics-based products and services that change the game • Use “data exhaust” to help customers use your products and services more effectively • Continuous, real-time analytics • Start with data opportunities or start with business problems? Answer is yes! • Need “data products” team good at data science, customer knowledge, new product/service development • Internally, analytics built at scale and embedded into decision processes
  15. 15. Analytics 3.0: Data Types Articles • Customer profiles • Organization contacts • Billing • Marketing • Contracts/orders • Shipping • Claims • Call center • Customer service • • • • • • • • • Purchase history Segmentation Customer value Purchasing behavior Recommendations Sentiment analysis Target marketing Satisfaction Customer experience management • Service tiers Social Feeds Mobile devices XML Videos Twitter Device sensors Blogs Cloud Spatial GPS LinkedIn Presentations RSS Images Hosted applications Documents Email Website activity Text messages Clickstream logs
  16. 16. Analytics 3.0 Data Management Choices
  17. 17. Analytics 3.0 Technology & people • Heavy reliance on machine learning • In-memory and in-database analytics • Integrated and embedded models • Analytical “apps” by industry and decision • Focus on data discovery • Blended data science/business/IT teams • Chief Analytics Officers in many firms 3.0
  18. 18. Procter & Gamble 3.0 176 years old • • Primary focus on improving management decisions at scale • “Information and Decision Solutions” (IT) embeds over 300 analysts in leadership teams • Over 50 “Business Suites” for executive information viewing and decision-making • “Decision cockpits” on 50K desktops • 35% of marketing budget on digital • Real-time social media sentiment analysis for “Consumer Pulse”
  19. 19. GE 3.0 120 years old • $2B initiative in software, analytics, and “Industrial Internet” • Primary focus on data-based products and services from “things that spin” • Will reshape service agreements for locomotives, jet engines, turbines • Gas blade monitoring in turbines produces 588 gigabytes/day—7 times Twitter daily volume • Offering new industrial data platforms and brands like “Predictivity” and “Predix”
  20. 20. Ford 3.0 110 years old • Bill Ford: “The car is really becoming a rolling group of sensors.” • Ford’s Digital Analytics and Optimization team has full responsibility for all B2C channels and N. American business units • Dynamic multichannel testing and targeting with automation and integration of SEO/SEM, CRM, email, media, etc. • Hyper-local dealer support digital algorithm delivered 85% increase in action rate and 48% decrease in cost per action
  21. 21. Recipe for a 3.0 World 1. Start with an existing capability for data management and analytics 2. Add some unstructured, large-volume data 3. Throw some product/service innovation into the mix 4. Add a dash of Hadoop and a pinch of NoSQL 5. Cook up some data in a high-heat convection oven 6. Train your sous chefs in big data and analytics
  22. 22. Implications for Software/Services Providers • Need to embed analytics into other systems • May be role for ongoing monitoring of embedded analytics • Software firms hold up the “data mirror” • Dealing with the law of large numbers on analytical skills • Analysts often need to be embedded to have an impact
  23. 23. Thank you! tdavenport@babson.edu

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