Just like a startup bubble, the investment hype on big data worries me. As investors and companies race find ways to implement, manage and draw insight from big data, slowly but surely I’ve come to realise something: there’s too much value being placed on the data and not enough on what you can do with it. And, I’m not just talking about business intelligence tools either – they can be part of the problem sometimes too.
To put it simply: data is only as valuable as the actions that one can take as a result of information they receive.
At an operational level, there are a finite number of decisions that we can make on a regular basis to adjust the ebb and flow of our business each day. I’m a firm believer in the old ‘I can remember 7 plus or minus 2 pieces of information at any one time’ concept. I tend to think the same applies to how many metrics we can effectively juggle at any one time, too.
Big data dashboards that show us dozens of leading indicators at a time are only helpful if it is of value to act on these on a regular basis.
Isolating customer segments or daily performance metrics to smaller and smaller chunks is only of value if you have the capacity and know-how to extract enough value that you can pay off your overwhelming technology and analytics costs.
And of course, the more detailed you want to go into isolating, understanding and knowing everything about every customer, past, present and future, the more resources you’ll need to be able to do all of that.
At a strategic level, having oodles of data is nice in theory, but how much of it is really going to form the guidelines for how you’ll operate your business and find a unique market position? Strategy is about doing just enough diagnosis to figure out that there’s something that customers want that no one else is delivering, and realising that you can do so at a reasonable return (or cost, for all the government folk out there who don’t need to make profit). There’s a lot of hard work in achieving good strategy that a data management tool, or decent analytics just won’t solve for you.
So in the end, big data is just data. You can invest heavily in understanding it, getting insight from it, putting technology around it, and generally speaking, overwhelming yourself with data. That situation hasn’t changed since we added the word ‘big’ to the concept of data. No doubt anyone who’s ever looked at a big data tool has had more than a few moments of utter confusion in trying to understand what they’re looking at and what to do with it.
For a digital native, I’m still a bit old school. Make sure you have the ability or resource to find meaningful, actionable insight from your data sources before investing too heavily in bringing more data in house!