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Copyright Thomas H. Davenport and SAS Institute Inc. All Rights Reserved. Used with permission

Big Data in Big Companies: Executive Summary

By: Thomas H. Davenport and Jill Dych

Bigdataburstuponthesceneinthefirstdecadeofthe21stcentury,andonlineandstartupfirms

likeGoogle,eBay,LinkedIn,andFacebookwerebuiltaroundbigdatafromthebeginning.No

integrationwithexistingarchitecturesorprocesseswasnecessary.Bigdatacouldstandalone,big

dataanalyticscouldbetheonlyfocusofanalytics,andbigdatatechnologyarchitecturescouldbe

theonlyarchitecture.Inthisresearch,however,westudiedthebigdataactivitiesof20large,well-

establishedbusinesses.Bigdatainthoseenvironmentsmustbeintegratedwitheverythingelse

thatsgoingoninthecompany.

Overall,wefoundtheexpectedco-existence;innotasingleoneoftheselargeorganizationswas

bigdatabeingmanagedseparatelyfromothertypesofdataandanalytics.Theintegrationwasinfactleadingtoanewmanagementperspectiveonanalytics,whichwellcallAnalytics3.0.

Bigdatamaybenewforstartupsandforonlinefirms,butmanylargefirmsviewitassomething

theyhavebeenwrestlingwithforyears.Somemanagersappreciatetheinnovativenatureofbig

data,butmorefinditbusinessasusualorpartofacontinuingevolutiontowardmoredata.

However,theyarestillstruckbythelackofstructureofthedataandtheopportunity/costratioof

bigdatatechnologies.

Therearealsocontinuingiflessdramaticadvancesfromtheusageofmorestructureddatafrom

sensorsandoperationaldata-gatheringdevices.CompanieslikeGE,UPS,andSchneiderNational

areincreasinglyputtingsensorsintothingsthatmoveorspin,andcapturingtheresultingdatato

betteroptimizetheirbusinesses.Evensmallbenefitsprovidealargepayoffwhenadoptedonalargescale.

Likemanynewinformationtechnologies,bigdatacanbringaboutdramaticcostreductions,

substantialimprovementsinthetimerequiredtoperformacomputingtask,ornewproductand

serviceofferings.Liketraditionalanalytics,itcanalsosupportinternalbusinessdecisions.Mostof

thecompaniesweinterviewedhadaspecificbenefitinmind.Eachbenefitchoicehasimplications

fortheleadershipofthebigdatainitiativeandthewaythatbenefitsaremanaged.

Aswithallstrategictechnologytrends,bigdataintroduceshighlyspecializedfeaturesthatsetit

apartfromlegacysystems.Wedescribeabigdatastackthatisoptimizedaroundthelarge,

unstructured,andsemi-structurednatureofbigdata.Wealsodescribehowbigdatatechnology

architecturesinterfacewithmoretraditionalbusinessintelligenceandreportingarchitectures.

Aswithtechnologyarchitectures,organizationalstructuresandskillsforbigdatainbigcompanies

areevolvingandintegratingwithexistingstructures,ratherthanbeingestablishedanew.No

organizationweinterviewedhasestablishedanentirelyseparateorganizationforbigdata;instead,

existinganalyticsortechnologygroupshaveaddedbigdatafunctionsanddatascienceskillstotheir

missions.Thefullreportdescribesseveralfirmsapproachestofindingscarcedatascientists,and

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Copyright Thomas H. Davenport and SAS Institute Inc. All Rights Reserved. Used with permission

alsotheirapproachestoestablishingdata-savvyleadership.Thereportalsodescribesapproaches

thattheselargefirmsaretakingtoestablishingthefinancialreturnsandbenefitsfrombigdata

projects.

Thereportconcludeswithadiscussionofanewparadigmformanaginganalytics,Analytics3.0.

Itsthecombinationoftraditionalanalyticsandbigdata,anditmeansthatthedata-driven

economyappliesnotonlytoonlinefirms,buttovirtuallyanytypeoffirminanyindustry.Someof

theotherattributesofAnalytics3.0includethecombinationofmultipledatatypes,new

approachestodataintegration,muchfasterprocessingofdatawithnewtechnologies,andthe

integrationofanalyticswithoperationalanddecisionprocesses.Thesetechnology-drivenchanges

arealsoaccompaniedbyasetoforganizationalchangesinAnalytics3.0.

Eventhoughithasntbeenlongsincetheadventofbigdata,theseattributesadduptoanewera.

SomeaspectsofAnalytics3.0willnodoubtcontinuetoemerge,butorganizationsneedtobegin

transitioningnowtothenewmodel.Itmeanschangeinskills,leadership,organizationalstructures,technologies,andarchitectures.Itisperhapsthemostsweepingchangeinwhatwedotogetvalue

fromdatasincethe1980s.

Itsimportanttorememberthattheprimaryvaluefrombigdatacomesnotfromthedatainitsraw

form,butfromtheprocessingandanalysisofitandtheinsights,products,andservicesthatemerge

fromanalysis.Thesweepingchangesinbigdatatechnologiesandmanagementapproachesneedto

beaccompaniedbysimilarlydramaticshiftsinhowdatasupportsdecisionsandproduct/service

innovation.Thereislittledoubtthatanalyticscantransformorganizations,andthefirmsthatlead

the3.0chargewillseizethemostvalue.

This independent research study conducted by Thomas H. Davenport and Jill Dych was sponsored by SAS. If you would like toreceive the complete Research Report, please visit: sas.com/BigDataIIAReport

To learn more about SAS visit www.sas.com. To learn more about the International Institute for Analytics (IIA) visit iianalytics.com.

About the Authors:

ThomasH.DavenportisaVisitingProfessoratHarvardBusinessSchool,adistinguishedprofessoratBabsonCollege,aSeniorAdvisortoDeloitteAnalytics,andco-founderandresearchdirectoroftheInternationalInstituteforAnalytics.Hehasco-

authoredoreditedfourbooksonbusinessanalytics,includingthenewbookKeepingUpwiththeQuants:YourGuideto

UnderstandingandUsingAnalytics.

JillDychisVicePresidentofBestPracticesatSAS,andtheauthorofthreebooksonthebusinessvalueoftechnology.Her

workhasbeenfeaturedinmajorpublicationssuchasComputerworld,theWallStreetJournal,andNewsweek.com,andshe

blogsontechnologytrendsforHarvardBusinessReview.Jillwastheco-founderofBaselineConsulting,whichwasacquiredby

SASin2011.