IVI Autumn Summit...Project Leader, London • Operational lead for BCG's IVI offering 2 •...

L l t K biliti f Bi D tLessons learnt: Key capabilities for Big DataIVI Autumn Summit

September 2013

Your hosts todayYour hosts today

Dr Stefan A. Deutscher Warren Macdonald

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Principal, Berlin

• BCG's representative on the IVI Technical

Project Leader, London

• Operational lead for BCG's IVI offering

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Committee• Part of BCG's contribution to EIM• Global infrastructure topic lead• Topic expert in risk management and data

• Part of BCG's contribution to EIM• Part of the IVI Enterprise Architecture

Management workgroup• Deep experience in IT cost reduction and

130925 big data v0.7-WM-LON (abridged).pptx 1Draft—for discussion only

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2security sourcing

Big Data is a hot topic with the volume of Big Data searches increasing rapidlyincreasing rapidly

Trends

100 100

Big data80 80

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Digital Economy 60 60

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Cloud computing

40 40

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eCommerce20 20


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2005 2007 2009 2011 20130 0

Source: BCG analysis & Google Trends

While others focus on the data itself, we define Big Data by the value and change it drivesvalue and change it drives

Traditional view of 'Big Data' BCG view of 'Big Data'

$400M EBIT opportunity at an international energy co around 'Smart Home' & cross sell based on new data

Data volume

Datavalue

90% of total data in the world was created in the last 2 years

Walmart's hourly transaction data 67xSales up 7-12%, page views 25%when Shopzilla dropped speed of loading website pages from seven seconds to two

Cost of sequencing DNA h

volume Walmart s hourly transaction data 67xthe books in the Library of Congress

Would take 1,000 years towatch all the videos on YouTube

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Cost of sequencing DNA has fallen by a factor of 1,000x as speed has increased by 1,000,000x

Data variety

New forms of content coming online likeGPS data, augmented reality, speech to text QR codes etc

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model change

Smart meters & grid sensors are disrupting the energy industry

Telematics data is reinventing the i th h li d i i

speech to text, QR codes etcPlus infinite varieties of user content, eg.posts, pics, videos, links etc

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Data velocity

car insurance through personalised pricing

Banks & retailers creating new businesses from selling analysis on transaction data to third

Visa has cut processing time to spot credit card fraud from 1 month to 13 minAmazon's 'cloud' holds >260B objects &


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partiesj

handles 200K requests / sec

Source: BCG analysis and case experience

Our clients have seen significant value through investments in Big Datain Big Data

Travel & Tourism Retail GroceryCoffee Chains

Up to 20% EBIT benefit from optimized ticket pricing

$160M of sales through loyalty programme analysis

$70M margin increase from promotional effectiveness

Travel & Tourism Retail GroceryCoffee Chains

analysis

BankingConsumer Goods Retail Insurance

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$120M opportunity from utilizing Big Data analytics to

identify 15 new cross-sell

$100M in persistency and x-sales through embedding

analytics in sales processes

$45M benefit from establishing real-time enterprise information

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yopportunities

analytics in sales processespmanagement function

Insurance

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$30M benefit from new business creation opportunities

$500M opportunity from restructuring the broking role

TelecomsInsuranceBrokerage

$500M benefit through better managing shipping data

Shipping


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2business creation opportunities by leveraging geo-data

restructuring the broking role using data

managing shipping data

Source: BCG case experience

Big Data is relevant today due to the conjunction of changes in costs, capabilities and opportunitiesin costs, capabilities and opportunities

Cost Capability Opportunity

Economics of data analysis h f d t ll h d

New technologiesenable us to analyze data we

Wealth of data availableallows for new industry insightshave fundamentally changed enable us to analyze data we

previously could not, much fasterallows for new industry insights

and customer understanding

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• e.g. Cloud services

Analysis tools• e.g. Hadoop

Internet• e.g. social

media• search history

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Data processing• e.g. MapReduce

(parallel servers)

Mobile connectivity• e.g. smartphones• 4G roll-out

Smart devices• e.g. smart

meters• Telematic boxes

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Outsourcing• e.g.

crowdsourcing

Accelerated data transmission

• e g 100GB

Corporate data

• Telematic boxes

• e.g. loyalty card data


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2crowdsourcing • e.g. 100GB ethernet

card data• telecom data

Source: BCG research

Google: handling really big dataGoogle: handling really big data

Constantly looking for Tries to build trust withConstantly looking for new opportunities to 'Organise all the world's information'

Tries to build trust with attractive corporate

culture and essential set of products

Datausage

world s information of products

A li ti b ilt ff O i ti fill d ith

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single data platform that is designed to be infinitely scalable

Organisation filled with top data engineers

innovating new ways to gather and analyse data

Dataengine

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Builds tight web of ecosystem participants for key products eg.

In spite of its power, always looks to create win-win relationships

Dataecosystem


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y gSearch, Maps, Android with its partners

Source: BCG analysis

P&G: winning insights to fuel innovationP&G: winning insights to fuel innovation

P&G believes Big Data Building a trustedP&G believes Big Data is the single best way to find new innovation opportunities

Building a trusted relationship with

consumers is absolutely core to P&G's strategy

Datausage

opportunities core to P&G s strategy

Pi i B i O i ti d i d

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Sphere platform shares all data worldwide real time for instant insight

Organisation designed around central analytics & governance team with strong links to business

Dataengine

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Works with wide set of ecosystem participants who provide over 50%

Close relationships with partners like Walmart,

Google, Tesco reinforce Data

ecosystem


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capabilities and insight


Tesco: knowing customers better than they know themselvesTesco: knowing customers better than they know themselves

Early adopter who saw Builds long term trustopportunity to use Big Data to understand customers and reward l l i Cl b d

and loyalty with highly personalised customer

coupons, along with l d d

Datausage

loyalty via Clubcard clear code on data usage

Pl tf i t t ll O i ti l h

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internal transaction data with external data from ONS Experian etc

Organisational approach leverages 'arms length'

analytics combined with internal retail expertise

Dataengine

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Most critical participantis analytics provider Dunnhumby, who they

Builds shared data tools/reports to deepen

relationships with key Data

ecosystem


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y yultimately bought

ypartners like P&G


Insight from many case studies and BCG experience show there are 6 key success factors required to master Big Datathere are 6 key success factors required to master Big Data

Big Data transformationgOverall vision and objectives

Opportunities Trust

Creatingvalue & change

Buildingtrust

Datausage

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DataBuilding data Developing

Platform Organisation

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engineg

systemsp g

capabilities

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Dataecosystem

Decidingwhere to play

Workingday to day

Participation Relationships


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2ecosystemwhere to play day to day


Today we will look at TrustToday we will look at Trust

Big Data transformationgOverall vision and objectives

Opportunities Trust

Creatingvalue & change

Buildingtrust

Datausage

Today's focus

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DataBuilding data Developing

Platform Organisation

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engineg

systemsp g

capabilities

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Dataecosystem

Decidingwhere to play

Workingday to day



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2ecosystemwhere to play day to day


Trust is a critical but complex commodity – without it you cannot sustainably exploit Big Data opportunitiesyou cannot sustainably exploit Big Data opportunities

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Source: Davos 2013 Private Session on Value of Personal Data

Consumer anxiety over how data about them is used has grown and is fueled by media attentionhas grown and is fueled by media attention

... and has helped fuel consumers' anxiety

The media has focused on fear, uncertainty and doubt... anxiety

Share of respondents (%)

88%Consider at least one sector a privacy threat

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82%Want independent entity to

control data security

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Think companies' data uses are not transparent enough

• Recently several high profile data breaches • Extensive media coverage of data breaches as

well as missteps by companies

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• EU data protection regulation proposal has fueled coverage

Many companies underestimate the importance of building


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Source: Press searches; BCG analysis; BCG digital identity survey (n = 3,107, August 2012)

y p p gconsumer trust

Example: O2 found new uses of data without consumer trust undermined value creationconsumer trust undermined value creation

… but did not expect storm of harsh O2 launched "Smart Steps"

Telefónica developed Big Data analytics platform in cooperation with GfK

E bl d t di d d t "Harsh criticism on O plans to sell consumer

critics from media and consumerstargeted at retailers …

• Enables consumer understanding and data visualization with near real-time data from Telefónica integrated with consumer preference and behavioural insights from GfK

Harsh criticism on O2 plans to sell consumer location data"

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First product "Smart Steps" launched to provide retailers with consumer insights

• "Smart Steps" anonymises and aggregates bil t k d t t

"Ministry of trade views data brokerage as being illegal"

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and understand what factors influence the number of people visiting a location at any timeH l t il t il l l ff i f i ti

"Consumer protection minister Aigner recommends switching telecom

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stores and determine the best locations and most appropriate formats for new stores

network operator"

"Following feedback from consumers, we have decided not


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g ,to introduce Smart Step in Germany" Telefónica spokesman

Trusted companies demonstrate 4 characteristics that build confidence with customers, partners & reg.build confidence with customers, partners & reg.

Key characteristics of a trusted data partner Detailsp

• Implement encryption & security technologies to protect data• Use strict internal data governance scheme to control access

Ensure datais accurate and

• Ensure code of conduct & compliance mechanism in place

• Place clear limits on usage to ensure user privacy• Explain to customers how their data is and isn't used

Give users / partners control & confidence

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• Explain to customers how their data is and isn t used• Ensure customers have choices and control

• Communicate how & why data collected, & how customers benefitDemonstrate a

control & confidence on data usage

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y ,• Track and measure consumer trust over time• Take customer concerns seriously, collect only what's needed

H l l t h fid i d t & itD t t t

compelling value exchange

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• Work with regulators to agree appropriate policies & controls• Demonstrate to regulators that benefits to society are self-evident

Demonstrate to regulators that society benefits overall


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Intuit has created consumer trust through clear internal & external rules

Pro-active internal and external approach … allows value creating uses

internal & external rules

ppto building consumer trust …

gof sensitive data

Intuit trends• Small businesses performance

i t

Principles

against peers• Benchmarks spending and

profitability against industry• Advice on how to improve

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• Individuals compare spending patterns/habits against others

• Uses anonymous, aggregated data to protect privacy

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Small business employment index• Monthly view of employment,

hours, compensation Based on aggregated and

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Customer engagement• Based on aggregated and

anonymous data of 57,000 Online Payroll customers


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2Internal staff guidanceLink to value

Source: http://security.intuit.com/Data_Primer.pdf

Recap: What you need to do to master Big DataRecap: What you need to do to master Big Data

Big Data transformationSet a clear strategic vision and objectives

Opportunities Trust

fData

usage

Build a culture of innovation and experimentation

Establish consumers trust to enable broad use of their data

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Data

Platform OrganisationLeverage standardised, scalable & efficient data

Develop capabilities to capture manage and

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enginescalable & efficient data systems

capture, manage and interpret data

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Dataecosystem


Identify partners to work and collaborate to share

Create an open culture to support partnering and


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Thank you

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IVI Autumn Summit...Project Leader, London • Operational lead for BCG's IVI offering 2 •...

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