Editor’s note: Welcome to Throwback Thursdays! Every third Thursday of the month, we feature a classic post from the earlier days of our company, gently updated as appropriate. We still find them helpful, and we think you will, too! The original version of this post can be found here.
In Fall 2014, I spoke about “Unlocking Business Opportunity from Big Data” to a group of former CEOs and senior business executives. Glen Matsumoto, Partner and head of the NY office at the private equity firm EQT, invited me to speak with EQT’s group of Industrial Advisors who serve as Board members for a variety of companies in the industrial and infrastructure industries.
I told this group of executives about our philosophies at Silicon Valley Data Science, including becoming a data-driven businesses, how to approach an emerging technology like Big Data by setting the right high-level agenda via a data strategy, understanding the building blocks of an Experimental Enterprise, and how they can be marshaled to create results. Finally, I shared some industry examples, highlighting successful initiatives at other companies that have created lasting business results from big data.
It was fascinating to engage in dialogue with this group during the Q&A portion, and to hear their questions about data science and big data—which largely reflected Board-level concerns around strategic growth.
The first question was: “Should we be concerned about big data and privacy?”
This has been a hotly-debated topic within the data community for years, but I was intrigued that this question was also top-of-mind for this group of senior business leaders. As I shared with them, we believe that businesses have to fundamentally center the conversation on trust. I encouraged the group to focus on creating trusted relationships with their employees and customers, building upon a foundation of clear and transparent communication about how data is being used by their businesses.
Big data technologies and the data science algorithms applied to that data do have the power to create incredibly detailed understanding of customers and businesses. By working to create a trusted relationship with customers, companies can change the conversation from one about fear and distrust of technology, to one about the benefits (or not) that a customer can expect from the use of their data.
Separately, we recommend that all of companies be prepared for a data breach. Investments in security and protection of data are clearly important and should be a high priority for any CIO. However, with large corporate data breaches highlighted in the news almost every week, privacy failures have come to feel inevitable. Having a clear strategy and plan in place for how to deal with a data breach is an important facet of building—and retaining—a trusted relationship with customers and business partners.
The second principal question was: “How do we ensure that we get business value out of big data investments?”
I shared our view on how to prioritize business investment in big data by creating an effective data strategy that focuses on how to use data to enable your business, as opposed to figuring out what to do to data as the end point. I advised the group to make sure that business objectives were well understood, and to then understand what technologies could be used to support those objectives.
We highly recommend that technology organizations understand the generic patterns (i.e., technical workloads) of how technology can be applied to address specific business objectives and use cases. With this understanding, companies can take an agile and iterative approach to deriving business value from new technology investment—to ensure that the question is not whether there is benefit in investment in big data, but rather how quickly benefit can accrue to the business.
(My co-founder and CTO, John Akred, and our VP, Advisory Services, Scott Kurth, recently gave a seminar on our approach to data strategy. If you’re interested in learning more, you can sign up to be notified the next time they offer the seminar.)
There were several other things discussed, but the last question I will highlight was: “In what areas of strategic planning should we make sure to consider when looking at big data?”
We discussed five major areas in which data science and big data should be considered when doing strategic planning:
1. Business expansion. Using larger data sets and better analytics to support market analysis for new business areas, whether taking new offerings to existing customers or opening new markets for new or existing products.
2. Operational efficiency. Especially in the industrial sector represented by this audience, the internet-of-things combined with general improvements and cost reduction in sensors have led to greater data-oriented visibility into the operations of a business. Big data can be used to improve operational understanding and create new efficiencies to drive growth.
3. Understanding customers. Most companies gather information about their customers only to leave that information in a CRM or ERP silo. Developing more comprehensive views of customers, and using data from across the enterprise, can lead to better decision-making.
4. Improved marketing. Marketing efforts have already been changed dramatically by the evolution in data processing and analytics. Companies should continue to look for opportunities in this area.
5. Data services. Finally, I advised the audience to think about the data they are generating internally, and to think about what value it may have to trusted business partners or other companies. Every data-driven business has the ability to syndicate their own data outwards for mutual benefit (and within the constraints of their own trust and privacy approach).
What about your Board?
If you haven’t yet talked with your own Board of Directors about what you’re currently doing with data, now is the time to answer the questions that may be on their minds.
What other questions about big data have you gotten from your board?