Information is the new oil

1,674 views

Published on

Markets are fast disappearing, and being replaced by networks. Networks of intelligence. Consumers can’t be controlled anymore, and become active, and are turning markets into dynamic systems. The age-old subject of marketing is being redefined. Information is the new oil.

Published in: Technology
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,674
On SlideShare
0
From Embeds
0
Number of Embeds
29
Actions
Shares
0
Downloads
74
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Information is the new oil

  1. 1. 1 Peter Hinssen, editorINFORMATION IS THE NEW OIL DRILLING NEW SOURCES OF INNOVATION
  2. 2. “ Information is the new oil.” is the first in a series of thought-provoking booklets that Across Technology will be publishing this year, sponsored by EMC Greenplum. These booklets are an element in the Data Science Series, which is also a series of events, and a website: www.datascienceseries.com Publisher: Across Technology Editor: Peter Hinssen Executive editor: Philippe Gosseye Contributing editors: José Delameilleure, Hans Vandenberghe Layout: Stijn Van Herck SPONSORED BY
  3. 3. i Dear readerMarkets are fast disappearing, and being replaced by networks. Networks of intelligence.Consumers can’t be controlled anymore, and become active, and are turning markets intodynamic systems. The age-old subject of marketing is being redefined.Companies used to have time to respond. But, these days, their clock-speed is falling behind andmany are running behind the facts. Ailing companies are realizing that they are out of tune withtrends, with consumer behavior and don’t have the right insights anymore. Many companiesare running blind. Information is becoming stale faster than ever. Access to information iscritical, but the amount of information seems to be exploding, and it almost seems pointless totry and keep up. Intelligence is key. Insight is crucial. And information is the new oil.Data is no longer the data we expect it to be. Data has not only turned into Big Data, waitingto be explored. Data has also become Fast Data: we no longer have the luxury of analyzingcustomer behavior after their purchase, we want to know what they will buy immediately. Data has also become Live Data, as consumer behavior is no longer explained in long-termtrends. Above all, data has become Context Data, as we cannot analyze the essence inisolation, we need to analyze the context as well.With so much data available, information is gushing at us from different ‘wells’. Holding thepower in an industry is not a question of getting as many oil wells as possible. In actual fact,the single biggest asset your company has lies in its ‘refining capacity’. It’s not about theamount of data, it’s about your ability to spot the patterns in that information.With this booklet, we want to offer you the views of innovation technology guru Peter Hinssenon the way markets are changing and how you can make informed use of these trends tostrengthen your company’s position. To keep you informed on a constant basis, we have createdthe Data Science Series website (www.datascienceseries.com), offering you case storiesfrom your peers, valuable insight into market research and an overview of the Catalyst partnersthat help EMC Greenplum bring the right building blocks to the market. Allowing you to buildthe right ‘refinery’ for all the information that is coming your way. 1 Peter Hinssen, editor INFORMATION IS THE 2 3 4 NEW OIL Peter Hinssen, editor Peter Hinssen, editor Peter Hinssen, editor DRILLING NEW THE AGE OF ANALYZING OPEN DATA SOURCES OF INNOVATION DATA-DRIVEN CUSTOMER POWER MEDICINE BEHAVIOR SMART CITIES PREDICTING HOW BIG DATA TURNS EVERY BIG DATA HELPS WHAT HAPPENS CITY INTO A DATA CAPITAL REVEAL HIDDEN HEALTH TRENDS NEXT AND BUILD RISK MODELSMake sure you don’t miss the installments of the series. Please contact your local EMCGreenplum organization to obtain all of these booklets. 3
  4. 4. THings happen faster every day. Trends materialize faster every day.404
  5. 5. 01 The general theory of relativityHave you ever noticed that things are going faster than they used to? Have you ever had thefeeling that the world is speeding up, and that you’re just not going fast enough? Have you everthought that it never seems to slow down, but things just keep moving quicker and quicker?You’re not alone.Occasionally, when we watch a television show from our childhood, or take in a movie on TCMfrom a couple of decades ago, it’s not the clothes, homes or cars that strike us most as being outof touch, it’s the amazing slowness of life back then. And we all wonder how we could have everwatched those movies and TV shows when we were younger.The unbearable slowness of the past.Things happen faster every day. Trends materialize faster every day. Novelties wear off sooner.Old news gets older faster with every passing day. Speed is the game, and this whole worldseems caught up in an ever faster pace, a circle of increasing velocity.This is not necessarily a problem. As long as you can move faster than the market.1. How long does it taketo get ANYTHING done around here?When I visit a company, I have one simple question: “How long does it take to realize anything around here?”. This is not a loaded question. It’s a genuine question of interest. Andit’s important. So think about this in YOUR organization: “How long does it take to realize anything around here?”.You are in a brainstorm, the group has a brilliant idea, you spec it out, you get approval,then how long does it take to have a finished product, a new service, fully rolled out to yourcustomers? How long does that take? My favorite person to ask is typically the CIO, the Chief Information Officer, because they’re often the most honest and unbiased officer in the company. 5
  6. 6. 01 The general theory of relativity 2. How quickly does your MARKET change? And then I ask a second question: “How quickly does your market change?”. The CMO, the Chief Marketing Officer, is often my favorite person to answer this one. As they are in charge of marketing, they should know how fast the market moves, right? Surprisingly, the answer to that second question is, today, more often than not: “Our market now changes more rapidly than we can adapt.” So, we have our problem. In today’s fast-paced and increasingly speed-driven society, markets evolve more quickly than companies can adapt. That’s not a problem. That’s a Big Problem. I love formulas. Adore them. And this one is a simple formula: (MARKETS) WHERE V STANDS F0R VEL0CITY Now this used to be different. In the past, markets did not evolve faster than companies. Companies still had enough time to innovate, adapt and evolve faster than markets. As a matter of fact, companies dictated the rate of change of markets. Carmakers would dictate which novelties would be in our cars, telephone operators would dictate when new service features would be available, soda companies would dictate which flavors would be available,... But all that has changed. Markets have evolved faster and faster, and companies have not evolved fast enough.6
  7. 7. CL0CK SPEED INTERNAL CL0CK EXTERNAL CL0CK I like to use the term ‘Clock-speed’. You might remember clock-speed as a feature of computers a while ago. Nowadays, we don’t really care because computers are fast, but in the ‘old days’ when computers were slow, we used to worry about clock-speed. The term comes from the little clock inside computer which would determine at which ‘speed’ your computer would run. And so, a ‘2 Megahertz’ computer was half as slow as a ‘4 Megahertz’ computer. Silly old world. But think about this simple thing: how slow does your internal ‘clock’ tick? And how fast does your ‘external’ clock tick in your market? And how do they compare?Einstein will forever be remembered for his treatise on the ‘General Theory of Relativity’. Thismathematical tour de force, that was barely understood by any of his peers when it came out,was based on a very simple principle: everything is relative.Basically what the General Theory of Relativity said is that everything is fine according to thelaws of Newton when you move slowly, but when you move really fast, close to the speed oflight, than everything changes and the laws of physics as we know them don’t apply anymore.That’s exactly what I think is happening today. Our laws of marketing, our laws of dealing withconsumers and the way we build organizations worked just fine when markets were slowerthan our own capacity. But when markets heat up and become ‘faster’ than us, the laws as weknow them don’t apply anymore, and everything changes.Everything is relative. And when markets change faster than companies, I believe that we getinto a situation when markets will ‘flip’. They will flip in favor of the consumers. Not in favor ofthe old masters anymore. 7
  8. 8. Consumers are getting vocal8
  9. 9. 02 When markets stop being marketsMarketing was invented to help Sales. That’s the story that the giants of Marketing like to tell.Marketing was created to generate ‘insight’ into what consumers wanted, so that companiescould produce exactly what the market ‘wanted’.But times have changed.In the beginning, marketing ONE WAY !was really about relaying amessage from the Producerto the Consumer. And it was aone-way conversation.When a company had a new product, or had developed a new service offering, they wanted to tellthe market. And that’s exactly what marketing did. The clever marketers of a company would hirethe clever Don Drapers of this world to craft a clever message they could hurl onto the radios andtelevision screens of the consumers.And then the consumers started getting vocal. They woke up. They wanted to be heard. Theywanted to be involved. The consumer become ‘engaged’ and the power based shifted. It was notenough to have a message to the consumer, companies needed to build a ‘conversation’ with theconsumer. The monologue became a dialogue between Producer and Consumer. “ Let’s talk about it” 9
  10. 10. 02 When markets stop being markets But that was just the beginning. The advent of the New Normal accelerated this. Marketers quickly seized the opportunities of social media, and became ‘conversation managers’ who needed to understand how to converse with their consumer base. But, all of a sudden, markets stopped being markets. Markets turned into networks of intelligence. These days, consumers are not just dumb individuals, but have become extremely informed networked thinkers. Consumers will seek information, seek advice and get informed by their peers who are easy to reach. They will trust each other more than some commercial message aired or played on TV or Radio. Consumers have found each other. No way this box of Pandora will close again. Funnels have been used in marketing forever. The idea is simple: there is a population out there of potential users of your product or service. This is your universe. But not everyone will buy. You can’t convince everyone to take your offering. Your job as marketer was to take this universe through the funnel. Understand who your prospects are, who would really be prospective buyers of your offering. One step further in the funnel are really qualified leads, people that ‒ when given the right information ‒ will definitely want to buy. And you would guide your leads through the funnel until that final decision point: the Moment of Truth. The Moment in the store where they take YOUR product instead of the other brand, the Moment where they pick up the phone and order YOUR service instead of the alternative. The funnel is a powerful metaphor. But the funnel doesn’t work when your market has become a network of intelligence. Present-day consumers have the power and the ability to inform themselves. They gather intelligence from peers, from friends, from the network. They trust the network more than they trust you. The funnel doesn’t work anymore. The funnel has become a loop. Before a purchase, consumers will inform themselves by gathering all the information neces- sary. TV and Radio are, of course, in the mix but, more and more, they will seek out websites,10
  11. 11. blogs, experiences on Facebook, Twitter, anything in fact. And when they get to the Momentof Truth they will be influenced more by their own ‘network of intelligence’ than by yourmarketing efforts.Surprisingly, AFTER the Moment of Truth they will keep communicating with the network.They will talk about their purchase, about their decisions, and about their experiences. In some cases consumers will actually spend more time doing this AFTER the Moment of Truth thanBEFORE the Moment of Truth. This means that the old Funnel has become a loop. Exit Funnel.Hello Loop.But it also means that the days of the power-balance between Producer and Consumer have fundamentally changed. Forever.Markets have now become Networks of Intelligence. And are in constant flux. You can’t ‘control’a market anymore. You actually have to work very hard to ‘follow’ a market, and then ‘observe’the flux in that market. Forget control.The new paradigm will have consumers being more informed than you, in markets that have become networks, and that can change and adapt faster than you can. It’s a whole new ball game. 11
  12. 12. The amount of traces that we leave today is staggering.12012
  13. 13. 03 Information becomes the new oilThe key to solving this conundrum is Information. Information has become the new Oil. If you wantto make sense of all that is happening in a market, you have to gather input. That hasn’t changed.But the way to harness information is completely different from market intelligence of the past. Inthe past, we would ask customers what they wanted. If your sampling was big enough, you got anaccurate ‘reading’ of your market, and you could base your offering on that prediction.Three reasons why that doesn’t work anymore: 1. The Old approach is based on averages. Averages are out. 2. The Old approach assumes things won’t change between taking the market temperature and delivering the medicine. You don’t have that time anymore. 3. The Old approach is based on Action - Response. That doesn’t work anymore. It’s a system. A dynamic system. 4. The amount of traces that we leave today is staggering. We don’t just ingest huge amounts of information, we also LEAVE huge amounts of information.AveragesMarketers like averages. They like to lump people together in categories so they can label them.‘Single Moms’. ‘DINKs: Double Income, No Kids’. That’s why, for example, in television, series andeven whole TV stations have been designed exactly for the group of people that are put into the box:“Double Income Intellectual Yuppies with 1.7 children who drive a Volvo”. And we assumed ‒ becauseof the law of large numbers ‒ that all these people who fit that category would basically behavepretty much in a similar fashion.Abandon that idea. 13
  14. 14. 03 Information becomes the New Oil Everyone is unique. Everyone now has access to information, access to networks, access to each other. We don’t WANT to be average. We all WANT to be individuals. Unique, one-of-a-kind personalities. Not a number. Not a label on a box with other people. People want to be treated as individuals. They want information tailored to THEM, not to the ‘1.7 children with a Volvo’ category. They want personalized, highly tuned messages, offerings and services for them. People don’t want to belong to a category anymore. People don’t want to be an average. But the downside of that is that we now have an explosion of information. Modeling the whole customer database in a number of simple to manage categories is ‘passé’. We now have to construct our information universe where everyone is unique. Enter Big Data. Timing We used to have oceans of time. The clock-speed worked with us. Now it works against us. Markets change faster and faster, and we have to process information faster and faster. There is no point in knowing everything about your customer four minutes after he walks out of your store. There is no point in knowing everything about your online customer four seconds after he leaves your website. Or four milliseconds for that matter. We used to have time to process our databases. We would build models, and standard queries, and run reports. Some intrinsic customer segmentation reports could takes weeks to gather all the input, churn the facts and turn out the nice gleaming glossy report. But that is old-school. When markets become networks of intelligence you don’t have that luxury anymore. You don’t have the time anymore to churn. You have to move faster. You have to up the ante. You have to boost your clock-speed. Enter Fast Data. Dynamics We used to be able to treat data as relatively static. Information that we gathered from customers didn’t fluctuate that much over time. Of course consumer habits would evolve, and change, but slow enough for our modeling to work. We could assume that if we ran some tests on a small sample of a population, we would get the same response as if we’d scaled that to all our customers. It was essentially an Action-Response system.14
  15. 15. But that is pre-Flip. After the Flip, the markets become a network, where the response is notjust based on all the inputs, but on the interactions and the dynamics of the network behavior.We have to look at a market not as an input-output system, but as a dynamic system. Enter LiveData.FingerprintFinally, the amount of information we would store on a customer was simple, and relatively basic.What did they buy, where and when? All straightforward enough. Maybe traces, every so often, tosee if the purchase was the result of a special offer, a marketing program or a campaign.Nowadays, the picture is a little more complex. When a customer makes a purchase they will basetheir purchase on what they have observed, seen, discussed online. After they make a purchase,they will tweet about it, post on Facebook, pin on Pinterest or whatever. They will leave a digitalfootprint as a customer that gives all the ‘context’ of a purchase, instead of the naked ‘essence’ of apurchase: product and price.When we want to really understand customer behavior, we must take into account this contextrather than the essence. That means we have to look at a customer’s digital footprint, which ismuch, much larger than the old ‘basic’ facts. It’s like a diary where you would put ‘Hawaii, May1999, Vacation’. That’s the essence all right, but the context would be the pictures of your holidayto Hawaii, which show the rocky cliffs, the sandy beaches, the gorgeous weather, the weavingpalms, that amazing banana Dacquiri... You get the picture.Forget essence as the source of information. Enter Context Data.If you put all that together, the world of information suddenly becomes much more alive. BigData, Fast Data, Live Data and Context Data. And if you’re really clever, you will probably come upwith a whole lot more types of relevant information, for turning data into insight. 15
  16. 16. people will be creative in thinking up new derivatives of information that have value, and which can be traded.16
  17. 17. 04 We’re all in the information business nowOne of the characteristics of the era we live in, is that everyone seems to be in the informationbusiness nowadays.As a matter of fact, those companies which understand what the power of information can bring,will probably excel in the post-Flip era. But you have to be prepared to completely rethink yourbusiness model, and your current relationship with the customer. Be prepared to invert how youthink about information.Many companies, till now, have used information as ‘secondary’ input: information was used tohelp in the primary process of dealing with their customers. It was useful, helpful and sometimesessential, but it was not their core business. But ‘the times they are a-changing’…. These days, atsome companies, information is becoming ‘primary’ ‒ the core offering of the company.NikeImagine a company like Nike. I adore Nike for their power in branding, their products, their style.Nike is an admirable company. But Nike is also extremely interesting in terms of how they arelooking at the world that has become digital.Nike+ was launched years ago as an experiment. A joint product development between Apple andNike, that produced probably the most advanced, hi-tech set of running shoes in their time. Youcould synchronize your iPod to play those songs that would match your jogging pace, and after a jogyou could upload your run to the Nike+ community to share.All of a sudden Nike was not just selling shoes to customers, but was getting constant feedback onhow their shoes were being used. Or not used. In any case, it was getting an enormous amount ofinformation. Nike via the Nike+ community started getting constant updates on where people werejogging, when they were running, what their favorite jog paths were, where they slowed down,where they paused, where they rested, where they met other people. Suddenly, Nike was gatheringan amazing insight into how their products were being used. 17
  18. 18. 04 Information becomes the New Oil Nike clearly saw the potential, and went for it. They pulled all the stops on digital and pushed on at a lightning pace. Next, they introduced the Fuelband, a bracelet that traces your daily activity. Granted, it was rather limited at the start, but consider this: Nike+ allowed Nike to ‘see’ what their customers were doing when they jogged, but this bracelet would allow Nike to have contact with their customers all day long. The first version monitors your steps, but what if Nike were to add a heartbeat monitor and a temperature sensor? Nike would then be able to see all day long exactly how their customers live their lives, where they are, what they do, how fast their heart races and how flushed they were. Would that ‘Nike of Tomorrow’ still be in the running shoes business? No. Nike, by then, would be in the information business. Now, of course, Nike is not going to stop selling shoes. Probably not. But we are, with each passing day, getting into a world where information is currency. Information is the new oil. And those who have information will get ahead. So, Nike will HAVE to jump on the opportunity if it wants to stay ahead. Everyone is in the information business now. Banking Let me give you another example. Banks have not been extremely popular lately, and the trust that customers have in banks has been badly shaken. But that rocky-ride for the banking industry might be just the beginnings of rumblings in the financial services industry. Banks know a lot about their customers. They know how much money you have. They know what you spend your money on. They know what’s coming in, and what’s going out. But banks know a lot more. And there is a lot that they don’t tell you. Because banks have so many customers, they would be able ‒ in a world of Big Data ‒ to do much more with information. Banks, for example, know what you spend on your utility expenses, on your phone bill, on your Internet bill, on your mobile bills. Banks would be able to aggregate and compare. Actually, the bank could tell you that you’ve been paying too much for your mobile phone. But they don’t. Banks could tell you that you probably should switch to another electricity provider. But they don’t. Banks could actually give YOU, as the customer, an amazing insight into your personal expenses and your personal finance, but they don’t. All they do is print you out some pointless statements at the end of the month where they show you where you’ve spent your money. But you already know that. That is the ‘essence’. But the banks don’t give you the ‘context’.18
  19. 19. Banks could do a whole lot more. Banks are at the heart of virtually every major moment in your life.They are the heartbeat of all your precious interactions. But they hardly do anything with that.Buying your first bicycle for your daughter? Banks only store the “$149.99 at Ralph’s Bikes”. Buying that first bed as newlyweds? Paying for that lovely hotel in Tuscany? Banks only focus on the essence.But that essence is the nucleus of a story. That essence is the hook on which to hang pictures,stories, emotions, reviews, feedback, or even practical things like receipts.One of the ironies of today’s shopping experience is the receipts. When you get a receipt these days,there’s typically a statement at the bottom which says: “Keep out of direct sunlight.”. There are twooptions: either you store it out in the sunlight, but then it fades after two weeks and you can’t readthe receipt. Or you store it out of the sunlight, but then you’ll never find it again. Anyway, peoplealmost never find their receipts. But wouldn’t it be great if your bank could offer you this service?They already have the essence, all they have to do is add the ‘context’.My point is, banks are not in the finance business anymore. Or not just that at any rate. They’re alsoin the information business. The core financial products offered are rapidly being commoditized.Truly, there is very little difference between the ‘essence’ of one bank and that of another. But therewill be a huge difference between the context that banks offer in the future. And that will be thedeciding factor on which bank I choose.Banks are in the information business. Everyone is now in the information business.CurrencyInformation is an asset. Information is valuable. Shortly, there will be entities which buyinformation, and there will be those who sell information. Just as the world of finance has evolved,where you don’t just sell shares in companies, but sell options, and futures, the world of informationwill evolve as well. Information is a currency, but people will be creative in thinking up newderivatives of information that have value, and which can be traded. 19
  20. 20. 20
  21. 21. 05 The quest for patternsIn the old days, it was all about data. Companies became more and more obsessed with data.We would gather all the data we could on our customers, and that data was used for all sorts ofanalysis on where to go next. Data was stored in databases, that grew larger and larger. But this data was structured data, and static. We would compile information on our customersand try to ‘structure’ (or shoehorn) this into databases. Addresses. Sales figures. Contactinformation. Phone numbers. And we would build models, hoping to find the ‘holy grail’ thatwould eventually deliver us the magic formula to ‘control’ our customers, and ‘understand’exactly how to play the game.At the end of the 20th century, we realized that we had been busy creating too many databases.So we spent a considerable amount of time trying to get all those databases inside thecompany to be connected together and some of the bravest tried to put all these databases intoa totally new shiny database: the one database to rule them all. Pretty expensive, mind you.To no avail. Just like trying to control the weather with larger and larger supercomputers, weconstantly seemed to be running behind this illustrious holy grail of data.Today, we need to adopt a completely new paradigm when thinking about customers andtheir behavior, about markets and their dynamics. We have to adopt the butterfly effect, thinkof chaos patterns and think of market dynamics instead of compiling static data to eventually‘understand’ a market. (MARKETS)Essentially, you can’t ‘understand’ a market any longer with a static model. WHAT ’ S IN WHAT ’ S 0UT Dynamic, Patterns, Static, Structured, Horizon & Flux Secured & Steady 21
  22. 22. 05 The quest for patterns Enter Flux Markets today are in constant flux. Markets have become so turbulent that it has become impossible to ‘model’ them anymore, but instead we have to look for tell-tale patterns. We have to understand how to turn the flux of the market into ‘insight’ and try to extract ‘intelligence’ from a market without a complete and all-encompassing model. The customer is at the heart of the new ‘experience economy’. The faceless, nameless consumer has finally shifted from his plinth and the Arab Spring of marketing that has occurred in the past decade means we have to take the consumer seriously now. Very seriously... The consumer is now in play, the consumer is now the centerpiece that has control. But how do we communicate with an empowered consumer? How do we transition from ‘mass- market carpet-bombing of the consumer’ to providing a meaningful dialogue? For a long time, companies have worked pretty much inside-out: they would think up a new product, a new product offering, a new idea and then project this to the outside world, the outside market. That meant that the boundaries of a company were pretty important. INSIDE the walls of the company, we could try to compile databases and build models of the outside world. Today it is all happening on the outside: customers are in charge. Customers are talking about you and your brand. It’s not inside-out anymore, it’s the other way around: the boundaries have reversed. It’s outside-in. Today, the dynamics about your company, its products and its services are truly being lived in the market, out there. They are being discussed online. And you have no control. But you have to understand, you have to be able to get your information horizon as broad as can possibly be. The online communities, the social media, the constant and never-ending dialogue that is out there, beyond your company walls, has now become the dominant source of information. Your information horizon has exploded. Your information horizon is expanding every day. Like the expanding universe, that has been growing in all directions since the Big Bang. So, consider this: what is your company’s information horizon? And how has it changed in the last couple of years? Where do you think it is heading? How is your information horizon expanding and reshaping?22
  23. 23. 06 The power of refiningWhen we use the analogy of ‘Information is the New Oil’, we tend to think that the main aimis to find as many oil wells as possible. That the aim would be to build as many sources ofinformation, gushing data like oil gushers, and that there is an ‘oil rush’ going on out there.In fact, there is. But maybe that’s not where the action will be. The real action might lie in the‘refining’ process.The Standard Oil Company does not exist anymore. Well, not in that form and under that nameat least. Exxon Mobile, one of the world’s biggest companies, is the biggest remnant of thatonce mighty company, the Standard Oil Company.The company was founded by John D. Rockefeller. Rockefeller is the classic American Dreamstory, a poor young man who would become the richest man in the United States throughsheer ambition – and a fair share of good luck. And by choosing the right battle.His luck was being in the right place at the right time, as it often is. Rockefeller was actually anaccountant, a financial clerk, who happened to work at the docks when the very first oil wasbeing struck and who observed how prices of oil were being set.Now Rockefeller was a very clever young man. He saw an opportunity in working on the spreadin prices. He was not a cowboy who had struck oil by digging in the ground. He observed theflawed process of getting oil from the well to the refinery, and then ruthlessly exploited theinefficiencies in the system. He became the country’s richest man by completely controllingthe refinery process, then the pipeline system and, finally, the entire value chain, with all the oilsources eventually falling into his lap as well.It’s not the wells, it’s the refining process.Now of course, there are flaws in any analogy. But it could very well be that in the rush for BigData, it’s not about the wells. It’s not about MORE gushers, but it will be about how to extractthe essence from the raw Big Data. About the refining of big data. And whoever controls therefining process will be on top.The question for you is: are you a refinery? 23
  24. 24. Big data is not about the amounts of data. It’s about the cool stuff you can do with big data.24
  25. 25. 07 The Value of dataLast year, MIT’s Technology Review calculated that all Twitter messages combined produce 12terabytes of data every day. Those 140 characters a tweet add up to petabytes of data each year.That was last year’s number of course, this year’s number will be even higher as the numberof users increases. And there’s no way of telling whether there’ll be another hype around thecorner in one of the coming years that will produce even more data.Tweets are an excellent example of the value that data may have. A tweet is never more than140 characters. Some tweets are simply a waste of time and energy and are not worth thebandwidth they suck up. Other tweets have a value that can simply not be underestimated,when they have a financial or political meaning. Just think of the tweets and Facebookmessages that started the revolutions in the north of Africa last year.The same can be said about the data companies are collecting. On its own, some data does nothave any value, but combined with other data, or regarded in some specific context, it all of asudden starts making sense. You can compare data to the Lego bricks kids use to build houses,fighter planes or robots: in themselves, these bricks have no value. To be of value, the bricksneed to be put together in the context of what you are trying to accomplish. The same of courseapplies to data: in itself, it has no real value and to be of value, data needs to be put together inthe context of what you are trying to achieve:• Data has to be categorized into what it represents - there is no point using budget data to measure operational excellence• Sets of data need to be complete - it’s only when you go up against the competition that this becomes obvious• There’s no ‘right’ solution, but it needs to adapt as the environment in which you operate changes• More data doesn’t necessarily mean better decisions - it all depends on the type of data and how it has been put together• You don’t always have the right data that you need to do the job• You can normally buy better data – you just have to know what to ask for• Others may have more and better data than you 25
  26. 26. 07 The Value of data Business people, on the other hand, simply love data and can’t get enough data to extract value from. Business people see large quantities of data as a blessing, since you can get so much new information out of it. While IT is thinking mainly of the cost of storing all this data, deduplicating it, backing it up at night and managing it, big business is thinking of what it can do with this data to help it make the right decisions. They believe better information will fundamentally change their business. But the availability of data and information can have a perverse effect: some decision-makers have a serious data addiction. Despite being overwhelmed, they simply demand more data all the time and have an insatiable hunger for more information, more data. They demand another report, yet more detail. Getting more data buys them more time to make a decision. Too much data can seriously delay decisions. On the other hand, companies should not be averse to acquiring new data, and storing it, even if only for future use. What we need is leaders who care about data enough to make decisions on acquiring, storing and preserving data for the long term. The IT department or whoever is in charge of big data must make sure the company is ready to accommodate new data sources. We need to answer a number of questions here: • Who is creating data? • How should we distribute the information • How trustworthy is that source of data? to people within the organization? • Where is this data coming from? • How can we truly apply this information and • How can we filter this data by relevance? use this data for decision and predictions? • Is this living content or historical data? Here’s the paradox of big data: traditional information technology does not like huge amounts of data. Perhaps this is also the right time to introduce the notion of most valuable data: big data is usually associated with huge amounts of data, with petabyte size. But sometimes the value lies in a limited number of data with a huge value. Big data is not something for just the large companies, medium-sized companies can also derive value from analyzing and combining smaller sets of data. Let’s agree that big data are indeed a blessing. Let’s just, for argument’s sake, forget the practical problems that come with owning petabytes of data. Let’s just focus on what this data represents to our company. Imagine you have a wealth of data at your fingertips and possess all the necessary tools and skills to mine it. Just imagine there are no obstacles to getting lots of decision-supporting information for your CEO.26
  27. 27. Imagine you have a wealth of data at your fingertips and possess allthe necessary tools and skills to mine it. 27
  28. 28. 08 Topics for our next installments The age of data-driven medicine Big data helps reveal hidden health trends and build risk models Looking back a couple of decades, it is quite clear that medicine, and healthcare in general, have made great strides. New drugs have been developed based on new insights into how the human body functions. The influence of external factors on our well-being has been documented and acted upon. Technological advances allow us to get medical results in hours rather than weeks. But the best is yet to come. More and more data is being gathered for analysis. Old medical records that have been gathering dust are brought to life and add to the insights being developed by data scientists specializing in medicine. New diseases will be detected and analyzed much quicker, and treatments for both old and new diseases will come to the market faster. At the same time, people are obsessing with their health. They have more access, these days, to information and are become smarter in diagnosing symptoms. Users want to be in control of their health. They want to monitor the functioning of their body, trying to prevent illnesses and improve the quality of their lives. In short: people want to manage their own health. Over the past few years, devices that give people information on their health have come to market, and there are literally thousands of apps that help people stay in control of their health. These devices and apps are generating mountains of data, ready to be analyzed.cPatients, doctors, hospitals, pharmaceutical companies, insurance companies and scientists will all find ways of using this data to the benefit of science and society. In this booklet, you will learn: • How ‘do-it-yourself medicine’ will influence our consumption of healthcare • How healthcare will be customized and tailored to our specific needs • How big data will lead to better medicine • How the side-effects of drugs will be reduced dramatically • How analysis of medical data can reduce cost in social security systems • How medical data can be combined with non-medical data to 2 influence people’s behavior Peter Hinssen, editor THE AGE OF DATA-DRIVEN MEDICINE • How data quality will be even more important in healthcare BIG DATA HELPS REVEAL HIDDEN HEALTH TRENDS AND BUILD than in other domains. RISK MODELS The age of data-driven medicine is upon us. Read this booklet to find out what your role could be in this new era.28
  29. 29. Analyzing customer behaviorPredicting what happens nextMarkets change fast. Customer behavior changes even faster. Gone are the days whenconsumers were loyal to one brand or one shop. Over the years, consumers have learnt how tocompare offerings and switch from one brand to another based on a number of parameters.Analyzing what factors influence buying patterns is key to the new marketer. This is not justabout choice, price, convenience and ratings by other consumers, but also about the shopper’sbuying experience. New applications and technological advances allow retailers to trace whatwebpages people viewed before placing a purchase. And even more importantly: to detect andmeasure lost sales.Online and offline are merging, with consumers demanding the same experience whenshopping online or in a brick-and-mortar store. Likewise, retailers will be able to use the sametechniques to better understand shopper behavior. Big data analytics will allow retailers tofocus on cross-selling and improving per-customer profitability. Recommendation engines arebeing optimized constantly to get the most profitable item in the consumer’s shopping cart.By combining data, retailers may even be able to offer products and services to the customerbefore he even realized he needed them.There are numerous data sources that contribute to better knowledge of the customer. Withall that data flying round and being added together, the question of privacy pops up regularly.Consumers are getting wary of being over-analyzed. Retailers will need to pay extra attention toprudently manage the privacy aspects of their customer analytics In this booklet, you will learn:• How business analytics will allow you to ask and answer more innovative questions• How an increased speed of analytics can let you react to market changes faster• How IT and business can work together to create value for your company• How real-time decision-making will become possible across the entire supply chain• How unstructured data from social media, for instance sentiment analysis, can be combined with structured data• How to close the loyalty loop 3• How big data analysis can feed recommendation engines Peter Hinssen, editor ANALYZING CUSTOMER BEHAVIOR PREDICTING WHAT HAPPENS NEXTGaining market share and improving the share of wallet will be crucial inwinning that custom, and trouncing the competition. To find out whatpredictive analytics can mean to your organization, please read the nextinstallment of our series. 29
  30. 30. 08 Topics for our next installments Open data power smart cities How big data turns every city into a data capital Cities are booming. By 2050, the world population will soar to over 9 billion people. Seven people out of ten will be living in cities, placing a heavy responsibility/(a great burden) on anyone involved in issues like energy distribution, traffic management or environmental concerns. The world is changing fast and the power balance is shifting. The power grid is a good example of how consumers are becoming producers: people use solar systems to generate their own electricity and offer their surplus of energy back to the network. Energy-production and consumption is no longer one-way. It has become multidirectional, making it much more difficult to manage. People are attracted to the city because of the wider range of services on offer. Cities have grown organically. Despite efforts to build smart cities from scratch and manage these in an effective and efficient way, cities will continue to expand and become more complex. If we want our cities to survive, we will need to be smart, and use resources more efficiently and effectively. Millions of devices will be connected to the Internet, generating and exchanging information. Machine-to-Machine communication will become the norm, and machines may dictate what utilities will be available to whom at what time. Making sense of this huge amount of data will only be possible by processing it all on big data platforms. Privacy will once again be one of the concerns to address when smart meters, millions of sensors and devices will collect and share information. Much of this data will be open data, available to both government and commercial organizations. Striking the right balance between privacy and open data will be crucial to making these smart cities good places to live. What you will learn from this booklet: • How smart cities will reconcile growth with environmental concerns • How open data will help governments and companies alike to manage cities efficiently and effectively. • How privacy issues can be addressed in the open data arena 4 • How several cities are already managing the complexity Peter Hinssen, editor OPEN DATA POWER SMART CITIES of their growth HOW BIG DATA TURNS EVERY CITY INTO A DATA CAPITAL Smart cities are the future of the world, if the world is to survive our growth ambitions. To find out how open data can help turn all cities into data capitals, read this booklet now.30
  31. 31. i About the editor Peter HinssenAn entrepreneur, advisor, lecturer and writer, Peter Hinssen (1969) is one of Europe’smost sought-after thought leaders on the impact of technology on society andbusiness. He is frequently called upon to chair seminars and consult on issuesrelated to the adoption of technology by consumers, the impact of the networked digital society and the fusion between business and IT.Peter Hinssen is Chairman of Across Technology, www.a-cross.com/technology, and the author of ‘Business/IT Fusion’ and ‘The New Normal’. 31
  32. 32. 01 ‘Information is the New Oil’ is the first in a series of thought-provoking booklets EMC Greenplum will publish this year. These booklets are an element in the Data Science Series, which is also a series of events, and a website: www.datascienceseries.com 1 2 3 4 Peter Hinssen, editor Peter Hinssen, editor Peter Hinssen, editor OPEN DATA Peter Hinssen, editor INFORMATION THE AGE OF ANALYZING IS THE DATA-DRIVEN CUSTOMER POWER NEW OIL MEDICINE BEHAVIOR SMART CITIES PREDICTING HOW BIG DATA TURNS EVERY DRILLING NEW BIG DATA HELPS WHAT HAPPENS CITY INTO A DATA CAPITAL SOURCES REVEAL HIDDEN OF INNOVATION HEALTH TRENDS NEXT AND BUILD RISK MODELS Don’t miss these booklets and events. Go to www.datascienceseries.com, register for the newsletter and stay informed. 06/2012 - © Across Technology SPONSORED BY032

×