Big Data Gets Bigger with Business Networks
Digital communities generate unique forms of intelligence, insights and collaboration; new report outlines how companies can leverage to fuel innovation, productivity and profits
Thereís a new way of doing business. And itís being driven by data. Big data. Through years of technological innovation, companies have amassed vast volumes of information on their business activities; everything from structured data on production, marketing, sales, HR, finance, facilities and operations to transaction-level data on suppliers, customers and partners. But the convergence of major technology shifts like cloud computing, mobility, and social and business networks has sparked a new class of data: texts, tweets, blog posts, web-based videos, and other social postings. And as a new report indicates, companies that effectively harness this information stand poised to achieve unprecedented levels of productivity and profits.
"Today data analytics confer power to gain advantage in ways hardly imagined a decade ago," says Zachary Tumin, Special Assistant to the Faculty Chair and Director of Harvard Kennedy Schoolís Program in Science, Technology, and Public Policy and author of Doing Business the Data-Driven Way: Pathways to Success in the Networked Economy, a report that explores the power of big data conducted with support from Ariba, an SAP Company. "As never before, you can see and be observed, talk to and be talked about, sense the present and predict the future."
Itís a new way of operating. But as the report reveals, companies that embrace it can ultimately transform their businesses:
- At Cisco, the strategic marketing group mined historic data and social media mentions for customers who revealed both a propensity to buy, and a high readiness to buy. Ciscoís sales force converted that insight to sales uplift of $4.2 billion.
- EMI Musicís Million Interview database let the company play Moneyball Billy Beane-style with music hits, scoring home runs for fans and artists. The result: EMI rises from back-on-its heels to a global music powerhouse.
- Mount Sinai Hospital in New York optimized its patientsí first 8 to 12 hours in the hospital, running hundreds of simulations. With improved utilization, Mt. Sinai achieved the financial effect of adding 100 new beds without actually adding one.
Such results arenít easy to come by. But businesses are demanding them.
"Businesses, large and small, want to tap into vast amounts of internal and externally produced information to create competitive insights never possible with the mostly internally focused ERP data that predominates the contents of the corporate data centers today," says Brian Sommer, CEO of TechVentive, a technology strategy consultancy.
Armed with the right tools, they can. Business networks, for instance, enable companies to discover, connect and collaborate with a global network of partners more efficiently and effectively than ever before. But networks are about more than just connecting companies, people and processes. Their real power lies in what goes on inside them - all the interactions, transactions, commentary and insights that they generate. It is from this data that the next wave of innovation and business productivity will come.
"When you combine the convenience and speed of the Cloud with the connectivity and intelligence of business networks, you can predict the future with accuracy and recommend the best course of action to capitalize on those predictions," says Tim Minahan, Senior Vice President, Global Network Strategy, Ariba.
And when you add in technology to manage big data in real time, you can unleash its full potential. "Big Data presents an opportunity for companies to run better with new real and real-time insights via the end to end acquisition, acceleration and analysis of one or more Big Data sets," says Steve Lucas, Executive Vice President & General Manager SAP Analytics, Database & Platform, SAP.
Sommer agrees. "It is the power of analytics, specifically analytic applications that use BOTH internal and external data, which permits companies to gain insights into product usage, customer consumption data, competitor activity, social sentiment, etc.," Sommer notes. "The insights into these kinds of questions give businesses outsized opportunities to widen their profit margins, extend their market share and otherwise disrupt the economic stability and underpinnings of their competitors."
According to Tumin, there is no single, right approach for managing big data or harnessing its power. But as outlined in Doing Business the Data-Driven Way: Pathways to Success in the Networked Economy, there are some key strategies for success:
- Have a vision--a non-debatable business goal--around which all can rally. The move to data-driven business is a journey, and every journey needs a goal everyone can rally round, and aim for. Having one gives you a reason to take that first step together, and press on over the inevitable bumps in the road.
- Create a plan that is right-sized for action and gets value in the hands of users fast. You canít do everything at once. With huge volumes of data potentially available, right-sizing your best next move is especially important.
- Select a platform--a clearing--that can support doing business the data-driven way. Platforms, Harvard Business Schoolís Tom Eisenmann writes, "provide infrastructure and rules that facilitate groupsí transactions and can take many guises." Above all they are trusted, discoverable, and usable.
- Align your stars. Like numbers, data doesnít lie. It also doesnít talk. Making the most of big data still requires human intervention. So bring your A-team, know what makes them tick and understand their limitations.
- Manage the politics. Success with data-driven decision-making requires moving the right people toward a non-debatable goal, business-driven, with a feasible plan, well-incentivized, and operating over strong platforms. That takes negotiation and persuasion, the twin arts of political management.
And above all, understand that neither technology nor data are silver bullets and that the move to doing business the data-driven way can be highly disruptive. "It takes time and persistence to make the transformation," Tumin says. "But as leading organizations who have made the leap can attest, itís well worth the effort."
To learn more on big data and ways in which your organization can unlock its potential, visit Ariba and download (registration required) a complete copy of Doing Business the Data-Driven Way: Pathways to Success in the Networked Economy.