How Big Data Changes Our World


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Presentation from the Markedsføringsdagen 2013 conference, june 12 2013 in Copenhagen. Contains an overview of trends, uses, challenges for the CMO and innovation aspects of big data.

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How Big Data Changes Our World

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  2. 2. The purpose of this session is to discuss trends shaping thejourney towards the smarter planet – driven by big data2
  3. 3. © 2011 IBMIBM Global Business Services3INSTRUMENTED  Billions  of  RFID-­‐tags  embedded  into  our  world  and  across  ecosystems  Ze-abyte  Internet  Petaflop  Super  computers    +2  billion    Internet-­‐subscribers  +20  billion    Connected  devices  INTERCONNECTED   INTELLIGENT  Billions  of  Smartphones,  and  GPS-­‐devices  
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  5. 5. 55 5GlobalDataVolumeinExabytesMultiple sources: IDC,Cisco100908070605040302010AggregateUncertainty%90008000700060005000400030002000100002005 2010 2015Enterprise DataData quality solutions exist forenterprise data like customer,product, and address data, but thisis only a fraction of the totalenterprise data.By 2015 the number of networked devices willbe double the entire global population. Allsensor data has uncertainty.The total number of social media accountsexceeds the entire global population. Thisdata is highly uncertain in both itsexpression and content.
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  7. 7. 7fitbit”Lets make fitness a fun, achievable part of everyday life”
  8. 8. 8Neurowear  Necomimi  hCp://  
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  10. 10. 2009800,000 petabytesas much Data and ContentOver Coming Decade44xOf world’s datais unstructured80%Explosion of Data Means a Lot of Information …But we are lacking Insight202035 zettabytesBusiness leaders frequentlymake decisions based oninformation they don’t trust, ordon’t have1in383%of CIOs cited “Businessintelligence and analytics” aspart of their visionary plansto enhance competitivenessBusiness leaders say they don’thave access to the informationthey need to do their jobs1in2of CEOs need to do a better jobcapturing and understandinginformation rapidly in order tomake swift business decisions60%90%of the world’s data wascreated in the last twoyears
  11. 11. Big data, defined11
  12. 12. VarietyVolume VelocityVeracityof Tweetscreated daily12 terabytestrade eventsper second5millionOf video feeds fromsurveillance cameras100’s“We have for the first time aneconomy based on a keyresource [Information] that isnot only renewable, but self-generating.Running out of it is not aproblem, but drowning in itis.”– John NaisbittDecisionmakers trusttheir informationOnly 1 in 3We’ve Moved into a New Era of Computing
  13. 13. What can you do with big data?Innovate new Products Speedand ScaleKnow Everything About your Customers•  Social Media - Product/brand Sentimentanalysis•  Brand strategy•  Market analysis•  RFID tracking & analysis•  Transaction analysis to create insight-based product/service offerings•  Social media customer sentiment analysis•  Promotion optimization•  Segmentation•  Customer profitability•  Click-stream analysis•  CDR processing•  Multi-channel interaction analysis•  Loyalty program analytics•  Churn predictionRun Zero Latency Operations•  Smart Grid/meter management•  Distribution load forecasting•  Sales reporting•  Inventory & merchandising optimization•  Options trading•  ICU patient monitoring•  Disease surveillance•  Transportation network optimization•  Store performance•  Environmental analysis•  Experimental researchInstant Awareness of Riskand Fraud•  Multimodal surveillance•  Cyber security•  Fraud modeling & detection•  Risk modeling & management•  Regulatory reportingExploit Instrumented Assets•  Network analytics•  Asset management and predictive issue resolution•  Website analytics•  IT log analysis
  14. 14. PURPOSEFULBehavior pattern analysis delivering insights foreffective marketing decisionsEXPLORATORY REAL-TIME &ACTIONABLEPREDICTIVECustomerBuyingBehaviorExplore patterns thatto uncover customeracquisition andretention behaviorpatterns across all datasourcesScore customer behavior analysis and createmodels around newly discovered buyingpatterns. Accurately predict likely next bestaction for the customer.Actionable insight supportingapplications & processes –campaignexecution, CRM, ecommerce, callcenter, etc. Next best action offer canbe modeled and predicted in real-timebased on customer interaction andtransactions.Product Offers,Enhancement &DevelopmentIdentify, analyze andvisualize feedbackabout your productScore product sentiment and create models thatwould predict cross-sell and up-sell opportunitiesand insight into product enhancement anddevelopment of future portfolioAdeffectivenessActionable insight for localizedproduct promotions that can beexecuted for maximum impact.Insight is fed into productenhancement and portfolio decisionsCollect and analyzesocial data to assessawareness, reachand reaction to onand offline adsCreate predictive models to test and fine tunead campaign to maximize effectivenessReal-time ad analysis drivesfast reaction to optimizecampaign strategy andmaximize ROI
  15. 15. © 2013 IBM CorporationIBM Global Business Services15Vestas optimizescapital investmentsbased on 2.5Petabytes ofinformation.•  Model the weather to optimizeplacement of turbines,maximizing power generationand longevity.•  Reduce time required to identifyplacement of turbine from weeksto hours.•  Incorporate 2.5 PB of structuredand semi-structured informationflows. Data volume expected togrow to 6 PB.15
  16. 16. © 2013 IBM CorporationIBM Global Business Services16Dublin City Centre IncreasesBus TransportationPerformance16•  Public transportation awareness solutionimproves on-time performance and providesreal-time bus arrival info to riders•  Continuously analyzes bus location data toinfer traffic conditions and predict arrivals•  Collects, processes, and visualizes locationdata of all bus vehicles•  Automatically generates transportationroutes and stop locationsResults:•  Monitoring 600 buses across 150 routes•  Analyzing 50 bus locations per second•  Anticipated to Increase bus ridership
  17. 17. © 2013 IBM CorporationIBM Global Business Services17Barnes & Noble helpssuppliers track sales andinventory in real time17Need•  Publishers absorb the losses on returns whenthey print too many books, and have stock-outs when they print too few•  To provide publishers with the ability to getreal-time insight into sales and view inventorytrends over timeBenefits•  Decreased time to run queries from weeks toseconds and enabled an 80% reduction intime to run compared to its previous system•  Reduced inventory levels and inventorycarrying costs
  18. 18. © 2013 IBM CorporationIBM Global Business Services A Major Government Medical& Social Benefits AgencyIdentifies Improper PaymentsNeed•  To prevent and detect criminal activity, waste,abuse and mismanagement of paymentsBenefits•  When weeks of analysis failed to uncoverimproper payments, the Big Data analyticsengine did it in 4 hours – and led to a $140 millionpayoff•  360O view of member benefits history andentitlement resulted in savings from identificationof improper payments worth over $140M.•  Contributed to a 35-fold improvement in savingsand cost-avoidance18Fraud, Waste and Error
  19. 19. 19Watson:  From  Jeopardy  winner  to  healthcare  provider  
  20. 20. The challenge for the chief marketing officer
  21. 21. © 2013 IBM CorporationIBM Global Business Services219131224317Changing  Business  ImperaIves    The  Vast  Majority  of  CMOs  are  Underprepared  5060704020 40 60086Financial constraintsDecreasing brand loyaltyGrowth market opportunitiesROI accountabilityCustomer collaboration and influencePrivacy considerationsGlobal outsourcingRegulatory considerationsCorporate transparency5678910111213Data explosion1Social media2Growth of channel and device choices3Shifting consumer demographics4MeanMarketing Priority MatrixSource: Q7 Which of the following market factors will have the most impact on your marketing organization over the next 3 to 5 years? n1=1733; Q8 How prepared are you tomanage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years?n2=149 to 1141 (n2 = number of respondents who selected the factor as important in Q7)Factors impactingmarketingPercent of CMOs selectingas “Top five factors”UnderpreparednessPercent of CMOs reportingunderprepared51011
  22. 22. © 2011 IBM Corporation22Most CMOs are still focusing on understanding markets versusunderstanding individuals to shape their strategyIBM Institute for Business ValueSource: Q15 What sources of information influence your marketing strategy decisions? n=1733Sources used to influence strategy decisionsPercent of CMOs selecting all sources that apply50%Market researchCorporate strategyCompetitive benchmarkingCustomer analyticsMarketing team analysisCustomer service feedbackFinancial metricsCampaign analysisBrand performance analysisSales/sell-through numbersTest panels/focus groupsR&D insightsConsumer-generated reviewsThird-party reviews & rankingsRetail and shopper analysisOnline communicationsProfessional journalsBlogsSupply-chain performance82%81%80%69%68%65%61%54%52%41%74%48%40%42%68%68%37%25%26% Key sources tounderstand individuals
  23. 23. © 2011 IBM Corporation23CMOs are overwhelmingly underprepared for the data explosion andrecognize need to invest in and integrate technology and analyticsIBM Institute for Business ValueSource: Q8 How prepared are you to manage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years?n=149 to 1141; Q20 To what extent will the opportunity to collect unprecedented amounts of data require you to change? n=1629 to 1673UnderpreparednessPercent of CMOs selecting as “Top 5 Factors”Data explosion 71%Social media 68%Channel & device choices 65%Shifting demographics 63%Financial constraints 59%Decreasing brand loyalty 57%Growth markets 56%ROI accountability 56%Customer collaboration 56%Privacy considerations 55%Global outsourcing 54%Regulatory considerations 50%Corporate transparency 47%Need for change to deal with data explosionPercent of CMOs indicating high/significant needInvest intechnologyUnderstandanalyticsCollaboratewith peersValidateROIAddressprivacyIntegrateinsightsRethinkskill mix73%69%65%64%52%49%28%
  24. 24. © 2011 IBM Corporation24What’s inhibiting them? Building the business case, IT-marketingalignment/integration issues and marketing technology skillsIBM Institute for Business ValueLack of ROI certaintyCostTool implementation issuesLack of IT integration with organizationLack of marketing and IT alignmentLack of IT skillsLack of skills of (potential) usersLack of technological ownership in marketingEase of useReliabilityBarriers to using technology in marketingTop 5 selected by CMOsSource: Q23 What are the top 5 barriers to using technology? n=173361%72%47%43%45%25%46%34%37%18%Business caseIT relatedMarketing relatedIT and marketing relatedUsability
  25. 25. The innovation aspect
  26. 26. 1770   1875   1920  1830   2010  1970  InnovaHon  1st  Wave  2nd  Wave  3rd  Wave  4th  Wave  5th  Wave  6th  Wave  Smarter    Products  §  Instrumented,  interconnected,    and  intelligent  §  Building  blocks    for  a  smarter  planet  §  Sustainability  The    Industrial    RevoluIon Age    of  Steam    and  Railways Age    of  Steel,    Electricity  and  Heavy    Engineering  Age    of  Oil,  Cars  and  Mass    ProducIon  Age  of  IT  &  Telecom Source:    “Next  GeneraIon  Green:  Tomorrow’s  InnovaIon  Green  Business  Leaders”,  Business  Week,  Feb  4,  2008  and  Nicolai  KontraIev:  “The  Major  Economic  Cycles”  (1925)  We  are  ushering  in  a  new  wave  of  innovaHon  
  27. 27. 27Sixth Wave Thinking1. Waste = Opportunity2. Sell the Service, not the Product3. Digital and Natural Converge4. Bits are Global, Atoms are Local5. If in Doubt, Look to Nature6th  Wave  James Bradfield Moody & Bianca Nogrady: The Sixth Wave – How to succeed in a ressource-limted world
  28. 28. 28Price
  29. 29. 29PriceOrganicProductionmethodBiodynamicConventionalPesticidesProductionenvironmentChemicalsHerpacidesChild laborSustainabilityGMOEnvironmentalfootprintClimatechangeGeosphereBiosphereSociosphere HealthimpactHealthconsequencesPositiveNegativeProfiledPackagingHistory/OriginTransportTrackSustainabilityNetwork
  30. 30. Thank  you      Kim  Escherich  IBM  Global  Business  Services  +45  2880  4733  @kescherich  /escherich  /in/escherich  30