The value driver for big data is not volume, but velocity, or time to value. In the past year the focus has shifted from simply capturing the data to putting that data in context, according to a recent IBM report. The report also notes a growing disparity between the haves and have-nots when it comes to big data analytics, with three quarters of the population doing little or next to nothing.
A CFO study, also by IBM, backs these claims, revealing that over five years, the CFO now spends 250 percent more time integrating data just to do basic reporting. The ability to store data is beyond many companies' ability to sift through and identify what they’re trying to solve.
“Last year people were just happy to have white noise,” said Glenn Finch, global leader for technology and data at IBM Global Business Services. “It was about making noise. People don’t really recognize the term ‘context’ yet. They call it ‘relating data’ but context is the single most challenging thing that a data scientist has.”
Finch believes analytics itself is getting easier, however the insights achieved are demanding further forensics. “You don’t know what you don’t know, as the saying goes,” said Finch. “Now you can almost know too much. By knowing more, you want to know more. The amount of transparency that boards and markets are demanding has gone off the chart. That’s why you’re seeing that significant change in the office of the CFO.”
A quarter of those interviewed were identified as “front runners.” They are good at acquiring data, but they are largely challenged in analyzing and acting, according to Finch.
For front runners, time to value has accelerated with companies seeing in-year benefits. “In-year benefits have never happened in all my time doing this,” said Finch, who has been an author on the report for the last six years. “I believe that the speed message will continue,” he said. “We see it happening everywhere. Speed to value is going to be the number one focal area.”
He also notes that the focus of analytics is shifting, from 75 percent customer-focused initiatives to half focused on the customer this year. The data suggests that analytics is turning an eye inward. A 2012 study found initiatives were almost entirely focused on the customer.
IBM’s big data and analytics business is growing. The company staked it as a growth area five years ago. It is the focus for everything from OpenPower servers to cognitive computing with Watson. These findings reinforce and play into their strategy. “I clearly believe that if we haven’t arrived [at a critical point in big data analytics], we’re pretty close. That’s why things like Watson have come into being. We’re generating more data than our minds can process.”
The New Chief Data Officer Role
A sizable number of organizations (46 percent) are re-inventing business processes by integrating digital capabilities. In addition, a new position is emerging, focused on capitalizing on analytics-driven insight: the Chief Data Officer.
The CDO employs data and analytics to drive decisions. The role is rapidly growing, with Gartner predicting that 50 percent of all companies in regulated industries will have a CDO by 2017.
The move to real-time data is shifting companies to “predict and act” mode rather than just “sense and react.” Big data makes big promises, but the complexity of driving insights is changing the makeup of businesses.