As the name suggests, the idea of Big Data represents something “big” for some companies. Everyone is talking about it and, to a greater or lesser extent, everyone is aware of the large trail of information left behind on the Internet on a daily basis. However, do companies know how to analyze it properly and use it for making decisions?
To answer these questions, I speak to Óscar Méndez, CEO of Stratio, a company specializing in the management of Big Data, and Juan Gorricho, Senior Manager of Merchandise Business Intelligence and Analytics at the Walt Disney Company, both of whom were speakers at the IE Alumni Forum 2015, which focused on innovation. In the opinion of Méndez, the analysis of data can, for example, maximize the profitability of a business “all the way from a significant reduction in IT costs and TCO (Total Cost of Ownership) through to decision-making based on automated data.” Gorricho agrees on this point: “the higher the degree of automation in data management processes, the greater the impact.” But this isn’t all: it can also help modern businesses to migrate their business model. As Méndez explains, “they can make the transition from being product-centric to customer-centric, grouping together all the data they have about their customers to personalize and improve products or services.”
So what does a company of the standing of Disney use Big Data for? “To create a much fuller picture of business processes,” explains Gorricho. “It has allowed us to capture more key variables for much longer. The best example is Netflix. Netflix has successfully used much of the large-scale information it has gathered on patterns of the consumption of its content over the years not just to improve the customer experience but also in the development of new content.”
In this respect, there is one question that is sure to arise in the minds of those who are responsible for a business project: is Big Data expensive, can I afford it? Óscar Méndez maintains it is possible to obtain excellent results at affordable prices: “to begin with, Big Data analysis was only for large companies with large-scale resources but it is now much more accessible. We are talking about the democratization of data intelligence. With the current third-generation IT, with cloud systems and low-cost hardware, Big Data makes it possible to do things that were until recently impossible at an incredibly low cost. The key lies in having the necessary experience and intelligence.”
Thankfully, companies are aware of the importance of data analysis in decision making: “Big Data technology has been in use for ten years now and there are statistics showing that companies that use data correctly have benefited from an increase in profits,” explains Méndez. But this awareness does not always guarantee the correct management of Big Data: “not all companies have the necessary staff or maturity required to make correct use of the technologies or act based on the insights obtained from them. In this case, outside help is needed from expert companies that guide staff and help with the transition until companies are fully self-sufficient.”
From the client’s point of view, this outsourcing of the management of Big Data is not without its issues. Juan Gorricho of Disney stresses that “information management processes must solve real problems. There is too much noise surrounding Big Data, often created by the sale of technology and consultancy services that make companies believe the solution to all their problems lies in purchasing technology and the associated consultancy services. Further down the line, many companies realize that, in spite of having sophisticated technological solutions in place, their staff or work processes are not ready. The management of information must focus on the real problems of the business.” In other words, outside help is good, but it must be pertinent and aligned with the objectives of the business.
But there is also another party in the mix: the individual users who leave a valuable trail of data on the Internet. “The era of Big Data has allowed companies to accumulate unimaginable quantities of information about their customers,” explains Gorricho. “Customers trust companies and provide their information as a result,” he adds. “Maintaining this promise of trust through serious privacy and security policies must be the number one priority for companies. The improper use of information can have a significant impact on a company’s reputation.”
“Concerns about privacy are extremely important, not just for individual users, but also for society as a whole,” says the CEO of Stratio firmly. The concern is a legitimate one. “In Europe,” he explains, “members of the public have much more protection than in other countries, although unfortunately this creates difficulties whereby certain products and companies that could be created in Europe are going elsewhere, in countries with less restrictive policies, such as the United States. In this respect, there is a need to strike a balance between the protection of privacy and obstacles to technological progress.” In his opinion, this balance can be found “when users consciously cede part of their privacy based on the service they obtain in exchange, without the legislation creating bigger obstacles than in other countries.”