Big Data and the CFO

"Rugby is a game played by gentlemen with odd shaped balls" - Anon . . . .

The Big Data wave

BIG DATA is all the rage with every company jumping on the bandwagon to claim they have a 'solution' for big data (hmm . . .).

Every survey or report we read seems to bang on about the enormous quantity and exponential growth of the data the world is generating. Data is flooding ever more powerful servers and storage devices from websites, search engines, social networks, photo sites, Youtube, smartphone apps, voice, documents, loyalty cards, cloud based software services, internet-aware devices (refrigerators and cars for example) and more sophisticated enterprise business systems. We are told that this year stored data in the world will reach 1.2 zettabytes (that's quite a lot apparently!). It will be 8 zettabytes by 2015. For an infographic that illustrates the sheer rate of growth take a look here . . .  Executives are telling researchers and survey firms that big data and business analytics are the most important technology innovations they need to grasp. So, yes, it is pretty important!

Challenges in Big Data

But perhaps unsurprisingly, big data is suffering from the very hype it generated. For each much quoted success story, mostly focussing on consumer behaviour, there are many reports of companies not achieving the anticipated value from investments in expensive and complicated database and business intelligence systems designed to address the 'big data problem'. We are told that technology spending on big data will hit $34 billion this year alone (Gulp!). The hype over big data and the investments in the new generation of super-fast Hadoop style architectures and NoSQL database technologies have somewhat obscured the key question . . .  'What is the problem, or set of problems, we want to solve?' This is very reminiscent of the first data analytics wave around 'Data Warehousing' and 'Business Intelligence'. Big companies threw a lot of money at a tech experiment to aggregate data for potentially all-powerful business analyses. Sadly, by focussing on technology first, this approach languished in the 'trough of disillusionment' for many years.

The good news is that the 'high priests' of big data are not suggesting a reprise of the notorious 'data warehouse' (although some of the storage and database vendors would like them to be a little quieter on that front!). The variety, velocity and volume characteristics of big data are summarised in the '3-Vs' of Gartner's Doug Laney. Interestingly, although used to define current 'Big Data' wave, the '3-Vs' dates back to 2001 which I suppose just goes to show the data tsunami has been building up for quite a while. Compared to the 'old world', practitioners and data scientists describe a very different technical approach to the new 'big data'. The focus is on analysing incoming streams of data rather than hoarding everything in the hope it can be exploited later. The trick, if I can call it that, of making Big Data useful is in filtering what is important to solve the problem at hand. The better we define the problem, the better we can filter the data and the more manageable, usable, valuable and decision-enabling the resultant analysis is.

The industry is still struggling with this issue. Shawn Rogers of Enterprise Management Associates recently tweeted his tongue in cheek 'eight Vs' of Big Data ("Vast, Volumes of Vigorously, Verified, Vexingly Variable Verbose yet Valuable Visualized high Velocity Data"), highlighting some of the very real frustrations that practitioners are experiencing in the big data world!

Who 'owns' the big data problem in the organisation? Whilst there are clearly some technology issues at play, this is a business refinement strategy. I see many examples where the issue is given to an IT team who focus on the enabling technologies. Perhaps it matters less about who 'owns' big data and more about who should worry about it . . . Every business process owner should be exploiting data for better decision making, targeting, prioritisation and improvement. If you don't have business process owners, then certainly consider it seriously, and in the meantime talk to the functional leaders.

The CFO and Big Data

Whilst it is important to consider the data analytics opportunities for consumer buying behaviour, the CFO on the road to World Class Finance should consider that it is not the size of your data that matters, rather it is what you do with it and even more importantly, your focus on the 'odd-shaped' data. By ‘odd-shaped data’ I refer to data that describes unusual and unexpected events that occur within what we believe to be standard processes. 'Odd-Shaped' data is the unusual stuff, the knotty realities described in a data trail that paints the picture of where processes and activities don't go according to plan. This is the data that helps us understand what is really going on and how to simplify an standardise; to reduce cost and improve effectiveness and quality. I develop this theme in part 2 of this article, which can be found here.


Thanks for reading !

Dan