1. E-Guide
CAPITALIZING ON
BIG DATA
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MIT panelists: Big
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CAPITALIZING ON BIG DATA
ig data is a HUGE trend. A company’s
ability to collect, process and analyze
largedatasetscouldwellmeanthediffer-
ence between success and failure. Lead-
ership—on the IT and business side—is key. In this E-Guide, learn
the key steps organizations need to develop and take in order to
capitalize on Big Data.
B

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MIT panelists: Big
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Gartner’s basic
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CAPITALIZING ON BIG DATA
MIT PANELISTS: BIG DATA CALLS FOR DATA-DRIVEN DECI-
SION-MAKING SKILLS
Organizationsneedtodevelopdata-drivendecision-makingskillstocapitalize
on new and emerging big data technologies, attendees were told at this week's
MIT Sloan CIO Symposium in Cambridge, Mass. Intuitive decisions are not
the path to success when working with the mountains of structured and un-
structured information companies are collecting in big data environments,
conference presenters said.
"Big data has changed the C-suite entirely," said Shawn Banerji, manag-
ing director at Russell Reynolds Associates, a New York-based technology
recruiter. "Reliance on empirical data is in. Going with your gut is out."
While computers and computer users continue to create more informa-
tion and technologists find new ways to slice and dice it, the skills required to
analyzethedataremaininshortsupply.Itwillbechallengingforcompaniesto
fill leadership positions with individuals who truly understand data and how
to use it effectively, MIT researchers said during a panel discussion on "The
Reality of Big Data."

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CAPITALIZING ON BIG DATA
DATA UNDER THE MICROSCOPE
Bigdataisa"measurementrevolution"thatmustbeaccompaniedbyasimilar
"management revolution," said Erik Brynjolfsson, a professor at MIT's Sloan
School of Management and director of the MIT Center for Digital Business.
Brynjolfssonsaidchangesbroughtonbygreaterdataavailabilityresemble
changesinbiologybroughtaboutby15th-centurylensmakerAntonvanLeeu-
wenhoek's invention of the microscope. Van Leeuwenhoek's early technical
lettersdescribingtheminutelifeformshehadseenunderthemicroscopewere
met with misunderstanding and derision, because many of the established
scientists of the day simply could not embrace the idea that microorganisms
existed. Today's chief executive officers and chief information officers may be
even less ready to believe what the big data in their systems tells them.
"Weneedtochangethedecisionprocessfromonegoingwithhunchesand
opinions to one [based on] facts and data," Brynjolfsson said. That means ob-
tainingbetterdataanalysisskills,especiallyintheareaofstatisticalprobability.
WHEN CORRELATION MET CAUSALITY
Brynjolfssonwarnedthatunwarrantedinferencescanbeanegativesideeffect
ofbigdata,andsaidthatwhenunexpecteddataisencountered,it'sagoodidea

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CAPITALIZING ON BIG DATA
to ask more questions, not less. New kinds of data, much of it semi-structured
andunstructured,areoftendifficulttoassessandcanbefuzzy.Therearewhole
setsof"weirddata"thatemerge,Brynjolfssonsaid.Theresultcanbethatinfer-
ences made based on the data are untrue.
"Correlation is not causality. This is the most significant mistake people
make with data," he said, echoing a common adage teachers use to remind
science students that elements that appear together may not actually have a
cause-and-effect relationship. Assuming such a relationship can lead to false
inferences. The same adage was a prominent theme in The Signal and the
Noise, the recent bestseller by big data wunderkind and The New York Times
blogger Nate Silver.
As one might expect at a university symposium, education was seen as a
possible path to better data-driven decision making when working with big
datasets.Bettereducationinstatisticalinferenceisimportant,panelmembers
said, even at the high school level.
FRONT-LINE BIG DATA DECISIONS
While CEOs and CIOs need to prepare for big data decision-making, they
should also be ready to delegate decisions to other managers. Often, people

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on the front lines can make the better decisions, said Frank Diana, a principal
consultant at Tata Consultancy Services Ltd.'s U.S. operations.
"It's hard to get people used to not making decisions on a gut level. The key
is that decision making has to be pushed closer and closer to the edge, where
business is being conducted," said Diana, who took part in another big data
panel session.
Diana said the term big data may come and go, but the need for new sets
of data analysis skills will only continue to grow. "One of the fundamental ele-
ments driving success in the future is analytics excellence," he said.
However,aviewcontrarytothe''gowiththedata"approachcamebywayof
a conference attendee who suggested that the big data panel members should
considerthebeneficialroleofintuition.HecitedthecaseofthelateAppleCEO
SteveJobs,whowouldfamouslyshunresearchdata,saying,"Peopledon'tknow
what they want until you show it to them."

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GARTNER’S BASIC BUSINESS RULES FOR CAPITALIZING
ON BIG DATA
Big data is like a fashion trend: You can't turn around without seeing yet an-
other magazine article, research report or talking head pontificating on why
you can't live without it. In this case, however, the trend-pushers have a point.
Case studies at the Gartner Business Intelligence Summit added to a growing
body of evidence that a company's ability to collect, process and analyze large
data sets could well mean the difference between success and failure. Leader-
ship -- on the IT and business side -- is key.
In part one of this two-part SearchCIO tip on developing a big data analyt-
ics strategy, Gartner analyst Doug Laney laid out the steps CIOs must take to
makeITdepartmentsbig-data-enabled.Here,LaneyandcolleagueMarkBeyer
explainwhybigdatarepresentsararetechnologybreakthroughandofferthree
basic business rules for leaders to ensure that their companies don't get left
behind.

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Gartner’s basic
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CAPITALIZING ON BIG DATA
BASIC BUSINESS RULES FOR CAPITALIZING ON BIG DATA
Define the value of big data for your company. In 2008 and 2009,
simultaneous improvements to storage, memory, processing and network
technologies triggered big data's rise in popularity. These improvements are
often characterized as the three V's of big data -- volume, variety and velocity.
"Everythinggotbiggerandfasterallatonce,"GartneranalystMarkBeyersaid,
referring to this as an "alignment of the four planets of technology."
It's a moment in technological history that happens once every 15 years or
so, according to Beyer; when it does, companies stumble to figure out how to
take advantage of the rare occasion, often seeing it as an opportunity for more
data analysis. This is where businesses are now with big data and why the
fourth V -- value-- has begun to emerge.
"We'vecomearoundtotheideathatbigdataisn'tallaboutthesethreeV's,"
Laney said. "It's also about recognizing that there are opportunities to really
innovate with this information."
Big data analytics can not only help businesses create new efficiencies,
make better decisions and edge into real-time processing, it can also inspire
business transformation. Some of the most successful manipulators of big
datahavefiguredouthowtoturnthedatathey'vecollectedallalongintoanew

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Gartner’s basic
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source of revenue.
"DollarGeneralisagreatexampleofanorganizationthathasimplemented
a self-funding data warehouse," Laney said. The retailer grants access to ano-
nymized transactional data (see sidebar) for a fee via 1010data's Software as a
Service data warehouse product, he said.
Takeaninventoryofcompanydatasources(yes,itisbusiness'job).
Laney said he's "concerned, flabbergasted, dismayed" that businesses have a
better accounting of physical assets such as tables and chairs than they do of
their data. His research on what he calls infonomics -- the economics of infor-
mation -- encourages businesses to think otherwise.
To get started on this business rule, Laney suggests taking an inventory of
datasources--internalandexternal--availabletothebusiness.Thelistcould
include operational data, such as point-of-sale or machine-generated; com-
mercially syndicated data; dark data, which refers to data collected, used once
and then archived, such as email; and public data, such as weather reports or
census information.
TheClimateCorp.,astartupfromtwoformerGoogleemployees,usespub-
lic data and big data analytics to build its flagship product -- crop insurance
policiesforU.S.farmersbasedonweatherpredictions.Unlikeotherinsurance

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companies, The Climate Corp.'s policies are individualized and dependent on
avarietyoffactorssuchascroptype,fieldlocation,soiltypeandrelativematu-
rity of seed planted, according to the company website. Some data points used
come from open data sources, such as weather and forecast reports, as well as
soil samples, Laney said.
Adopt and adapt good big data ideas from other industries. "One of
thequestionsIgetasananalystis,'Whatareothersinourindustrydoingwith
bigdataoranalytics?'That'snotanoutrightterriblequestion…butwhydoyou
want to be second?" Laney said.
For example, everyone's stuck on the story of Target outing a pregnant
teenagerwithitsuseofdataandanalytics;it'safunstorytotell,Laneysaid,but
can the story be mined for innovative ideas that can be applied to businesses
besides Target? Probably not, he said. Rather than seeking out trials and suc-
cessesfromsimilarbusinesses,lookatthesuccessesfrombusinessesinother
fields and how those successes might be adapted. "This is where innovation
comes into play," he said.
TaketheshowHouseofCards,launchedintheU.K.(seesidebar).Tocreate
the U.S. version of the show, its parent entertainment company used viewer
data -- and lots of it -- to determine the storyline, the director to hire and the

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data
CAPITALIZING ON BIG DATA
leading actor to cast.
"Youmaynotbeintheentertainmentindustry,"Laneysaid,"butwhatkind
ofdatacanyoucollectaboutthebehaviorofyourcustomersorusersovertime
thatcouldhelpyoucraftnewofferingsthatspecificallyandexpertlytargettheir
interests?"

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