Big Data in the Nordics 2012

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1 Big Data in the Nordics 2012 A survey about increasing data volumes and Big Data analysis among private and governmental organizations in Sweden, Norway, Denmark and Finland.

2 Unexplored Big Data Potential in the Nordics Big Data has rapidly become one of the most discussed trends within the IT industry, with its common definitions of volume, velocity and variety. The benefits of being able to manage the constantly variable and exploding data volumes are vast and key analyst firms see Big Data as one of the technologies to watch and adapt to during At the same time, the term Big Data is broad and opens up for personal interpretations and definitions. Analysis can for example mean one thing for a BI expert and something completely different for an IT manager. This is the first study about how organizations in Sweden, Norway, Denmark and Finland manage increasing data volumes. The Nordic region is often regarded to be in the forefront of new technology with successful startups, high Internet penetration rates and wide use of mobile technology. The main conclusion from this survey is that there is still unexplored potential in Big Data analysis. Nordic organizations still lack the knowledge and motivation, despite the benefits of engaging in more advanced data analysis. 19% Unstructured data analysis is important The challenges with Big Data are real and they will remain. Fortunately, there are technologies and procedures available to become more responsive, competitive and profitable. The survey also shows clearly that normal reporting often is mistaken as true business analysis, probably due to available reporting tools that solve a few of the managements needs. Another main finding is that unstructured data is very under-used in the analysis. Variable data from for example support web sites, as well as other digital sources, should be analyzed as well, not only static data in the databases. Hardy Nelson Nordic Head of SAP Database & Technology 2

3 Executive Summary The importance of Big Data analysis is growing in the Nordic region But there is still an important task for the industry to educate and communicate the business benefits of unstructured and variable data analysis Nordic organizations prioritize structured data analysis Unstructured data analysis not well understood in the Nordics More than half of the companies claim to be working with real-time data analysis Data not consolidated in real-time to an Enterprise Data Warehouse, rendering enterprise wide real-time analysis impossible Difference within the Nordics when it comes to Big Data prioritization, budget allocation and management prioritization Denmark leading and Finland trailing in Big Data prioritization and deployment in the Nordics Data analysis and business intelligence is stated as an integrated part of the normal business processes Big Data analysis in the Nordics through traditional reporting vs. new Big Data specific technologies The key objective with data analysis is to create forecasts and optimize processes. But predictive analysis is only an objective for 10 percent and customer clustering only by 4 percent New investments in Big Data is also driven by cost reductions and profitability analysis Nordic organizations do not measure the effects of data analysis projects, mainly because they do not see the purpose or the need to analyze the results Analytics and data analysis is now viewed as a necessary function in most companies Finance, sales and IT departments are most often involved in the data analysis Approximately half of the respondents use external consultants for Big Data 77 percent claim that they use traditional databases for Big Data analysis Use of traditional relational databases may point to lack of real Big Data analysis Structured-only data analysis may explain the large percentage of small dataset sizes (70 percent <20TB, 52 percent <5TB) The use of specialized technology such as Hadoop and MapReduce is very rare Correlates to the small number of respondents who reported unstructured data analysis 3

4 Big Data Priorities What is the priority of increased data volumes within your organization today? Not prioritized 30% Base 445 Very prioritized 40% More than two thirds of the respondents prioritize the issue of increasing data volumes. 40 percent see it as a very prioritized issue, a clear indication that Nordic organizations are aware of the challenges. Somewhat prioritized 30% This is a question that growing and it s extremely important for us to priority It is a constant headache for us. We try to revise our Big Data routines and explore how to work with storage, etc. There are many different thoughts around this, especially for us working with IT. 4

5 Big Data Priorities What is the priority of increased data volumes within your organization today? The local differences are most visible in Denmark and Finland. The result is, however, likely due to cultural differences in priority evaluation. 100% 80% 8% 29% 50% 32% 29% 60% 30% 30% 40% 63% 30% 20% 38% 41% 20% 0% Denmark 75 Finland 88 Norway 90 Sweden 191 Not prioritized Somewhat prioritized Very prioritized 5

6 Structured vs. Unstructured Data How important is data analysis to your organization? Structured data has been the foundation for traditional business data analysis. The results from this survey confirm that production and relational data is a key priority. 100% 80% 60% 6% 18% 52% But more interesting is the results for unstructured and variable data. More than half of the respondents do not see any importance in analyzing e.g. online content, customer responses, etc. This is information becoming increasingly important for organizations that 40% 76% 29% want to quickly respond to changes in e.g. buying patterns and opinions. 20% It is therefore an important task for the industry and everyone 0% Structured % Unstructured 449 involved in business analysis, data warehousing and IT strategies to educate and communicate the business benefits of unstructured and variable data analysis. Not important Somewhat important Very important 6

7 Structured vs. Unstructured Data How important is data analysis to your organization? The results show that Danish organizations set the highest priority for unstructured data analysis. And analysis and BI experts in Finland have a challenge 100% 80% 4% 23% 2% 31% 10% 12% 6% 13% to clearly communicate the advantages to Finnish organizations. 60% 40% 73% 67% 78% 81% 20% 0% Denmark 74 Finland 90 Norway 91 Sweden 193 Not important Somewhat important Very important 7

8 Structured vs. Unstructured Data How important is unstructured data analysis (per country)? 100% 80% 60% 40% 20% 37% 24% 39% 52% 43% 57% 24% 55% 26% 0% 4% 19% 19% Denmark 75 Finland 90 Norway 91 Sweden 193 Not important Somewhat important Very important 8

9 Structured vs. Unstructured Data What are the proportions between structured and unstructured data? Do not know 100/0 90/10 80/20 70/30 60/40 50/50 40/60 30/70 20/80 10/ The results show that there is a widespread lack of knowledge about unstructured data in the Nordics. By not putting enough attention to the variable data, the organizations miss many opportunities to become more effective, competitive and profitable. Only 6 percent of the respondents claim that marketing and sales data is used as the basis for Big Data analysis decisions. That includes advertising campaigns, events and customer satisfaction surveys. 9

10 Structured vs. Unstructured Data How do you decide which unstructured data type to include in your Big Data analysis? Marketing, sales data 6% Do not know 12% Business demands or client needs 15% Base 409 Do not analyze unstructured data, have no need, have not discussed the topic 45% Management decisions, ad-hoc 21% 10

11 Current Data Analysis What type of data do you analyze today or plan to analyze? Production data 31% Pictures Customer and market surveys News articles 9% 7% On-line forums 4% Social media (blogs etc.) 8% Content on internal web sites 11% Web logs 14% 24% When responding on detailed questions about the type of data being analyzed today, it is clear that the Nordic organizations have a need for improvements. Only 24 percent include customer and market surveys in their analysis, which is very low depending on the valuable results such activities generate. Only 4 percent include variable content on online forums. Production and relational data in traditional databases dominate. Internal documents 11% 22% Relational data 84% Other 32%

12 Involvement Is Big Data discussed within your management? It is a task for any management to ensure that business decisions are based on as much information and useful data as possible. This survey shows clearly that Nordic managers Do not know 8% Base 449 still have more to do. The organizations are talking about Big Data analysis (38 percent of the managers). But the discussions are mostly focused on cost and technology issues not how the Yes 38% No 54% results can be used. If yes, what is discussed? 39% General strategic issues 32% Data management and storage, data volumes, new solutions and systems 15% Optimized processes, cost control and increased customer benefits 11% User availability, security, reports and analysis 3% Business Intelligence 12

13 Involvement Is Big Data discussed within your management? 120% The local differences are most visible in Denmark and Finland. The results could again likely be related to cultural differences. 100% 9% 12% 7% 7% 80% 60% 40% 37% 65% 56% 55% 20% 0% 54% 22% 37% 39% Denmark 76 Finland 89 Norway 91 Sweden 192 Do not know No Yes 13

14 Involvement Is data analysis and Business Intelligence (BI) part of your usual business processes? Do not know 1% No 15% Base 448 Yes 84% Traditional data analysis and business intelligence (BI) are seen as part of the normal business processes in the Nordics (84 percent). And there are no major differences between responses from the four countries. However, the responses clearly indicate that the organizations are working with basic analysis and reporting not Big Data analysis and business intelligence. It s included in our core processes, so in that sense it s part of our business processes. Yes, but we are a bit behind, that are things being done about it. 14

15 Involvement Is data analysis and Business Intelligence (BI) part of your usual business processes (per country) 100% 80% 60% 40% 20% 4% 16% 80% 15% 85% 1% 21% 78% 1% 11% 88% Traditional data analysis and business intelligence (BI) are seen as part of the normal business processes in the Nordics (84 percent). And there are no major differences between responses from the four countries. However, the responses clearly indicate that the organizations are working with basic analysis and reporting not Big Data analysis and business intelligence. 0% Denmark 76 Finland 88 Norway 90 Sweden 193 Do not know No Yes 15

16 Involvement What departments and functions regularly participate in data analysis? Base 446 Finance, IT, sales and marketing are mostly involved internal data analysis projects a result that confirms the picture from other markets. Embedded into business processes Human resources 11% 24% Production 27% Research & Development Marketing 14% 35% Sales 41% Finance 57% IT 45% Other 32%

17 Budgets for Big Data Is Big Data analysis part of your budget work? Do not know 7% Base 448 Approximately half of the Nordic organizations include Big Data analysis in their budgets. There are signs of change (51 percent) but not a clear prioritization. Yes 38% No 54% We try to include that in our budgets since it soon will be a major topic to manage. Not the term itself but we continuously improve our systems. 17

18 Budgets for Big Data Is Big Data analysis part of your budget work (per country) 100% 80% 60% 3% 32% 13% 65% 1% 43% 8% 45% 40% 20% 65% 56% 47% 21% 0% Denmark 75 Finland 89 Norway 91 Sweden 193 Do not know No Yes 18

19 for Big Data Analysis What are your main objectives to invest in Big Data analysis? Identifying long term trends 20% Sentiment analysis (specific for finance/trading) Control over enterprise data Profitability analysis Compliance Risk mitigation Cost reductions 7% 15% 24% 21% 40% 37% The given reasons for working with Big Data analysis is another indication that Nordic organizations are focusing more on traditional reporting than true analysis. The available data could be used to a lot more. The analysis is most often financially and sales related. 40 percent want to perform profitability analysis and 37 percent prepare for cost reductions. 15 percent of the respondents use Big Bata analysis for risk mitigation a very low figure. Fraud detection 10% Increased sales Increased market efficiency 29% 29% Other 38%

20 for Big Data Analysis What are the key outcomes of a data analysis within your organization? Base 447 Control Operational Expenditures Ensure Customer Satisfaction Optimize Capital Expenditures Regulatory Compliance Revenue forecasting Product portfolio analysis Mitigate risk Detect and Prevent Fraud Connection between behavior and buying pattern Customer behavior Forecasting Predictive Analytics Customer Clustering Organizational Productivity Process optimization Identify new market opportunities Retain customers Up-sell / Cross-sell to existing clients Other 4% 12% 10% 13% 15% 16% 24% 22% 21% 21% 21% 25% 29% 30% 30% 28% 30% 42% 40% Forecasting and process optimization is among the most desired objectives in the Nordics (42 and 40 percent). Predictive analysis is only an objective for 10 percent and customer clustering only by 4 percent. 20

21 Business Measurement Can you use business metrics or KPIs to measure successful data analytics projects? There are available measurement methods for Big Data analysis, but approximately half of the respondents do not currently measure their projects and Do not know 20% Base 450 activities. This indicates a huge potential for knowledge and practice sharing in the Nordic region. No 31% Yes 49% If no, why? 45% Do not see the use, do not have the need 23% Too complex to measure, difficult to select parameters, lack resources or tools 19% Not today, but working on it and wanting to measure it 14% Unspecified 21

22 Business Measurement Can you use business metrics or KPIs to measure successful data analytics projects (per country) 100% 80% 60% 13% 36% 34% 16% 24% 17% 31% 40% 32% 20% 51% 33% 59% 52% 0% Denmark 76 Finland 90 Norway 91 Sweden 192 Do not know No Yes 22

23 Use of External Consultants Are you using external Big Data consultants? Half of the Nordic organizations use external consultants for various parts of Big Data analysis projects, e.g. ongoing analysis and design and deployment when the project is Do not know 4% Base 450 started. No 45% Yes 51% 23

24 Use of External Consultants If yes, within what areas? Half of the Nordic organizations use external consultants for various parts of Big Data analysis projects, e.g. ongoing analysis and design and deployment when the project is Reporting 22% Project management 23% Base 217 Analysis 47% started. Design and deployment 23% Other 27% Data management 41% 24

25 Technical Solutions What types of data solutions are you using for Big Data analysis? Many of the respondents state that traditional databases are used for Big Data analysis, which indicate that these databases are used mainly for traditional analysis. In-memory databases 9% Column databases 10% Base 432 The results from the survey also show that some of the BI tools are used for traditional analysis. Other 23% Traditional databases 77% BI solution/ front-end tools (e.g. Business Objects) 66% 25

26 Technical Solutions If BI solution, which one? Base 218 Proprietary 8% SAS 5% Cognos 15% QlikView Oracle SAP 20% 18% 24% Microsoft BI 29% Other systems 14%

27 Technical Solutions Are you using special technology such as Hadoop and MapReduce? Yes 5% Do not know 17% Base 444 No 78% Organizations around the word increasingly use special software for Big Data analysis, such as Hadoop and MapReduce. Only 5 percent of the Nordic organizations use special technology, which reflects the low usage of unstructured data analysis. Not yet, but we will use Hadoop and have a started a study project on it. I have never heard anything about these technologies.. 27

28 Technical Solutions How many information systems need to supply data for your Big Data analytics? 0 3% The number of information systems generating information in the Big data analysis varies. For organizations with 7-8 or more information systems, the need for a central Enterprise Data Warehouse (EDW) is crucial % 18% % 7-8 5% % >10 25%

29 Frequencies and Velocity How updated is your information today? 53 percent of the respondents update their information in realtime. But without a central Enterprise Data warehouse, the real-time update is more likely done Daily 15% Base 429 within the separate information systems for e.g. finance, HR, CRM, etc. Hourly 30% Real-time 53% Monthly 31% 29

30 Frequencies and Velocity How often would you like it to be updated? Every minute 16% > a week 17% Hourly 22% 1-2 days 41% Base 409 Real-time 62% 45% It depends on the type of data, adjusted for internal department needs 39% Do not have the need 7% Currently focusing on other areas (e.g. data quality) 5% Unspecified 6% Matter of resources 30

31 Data Volumes How large are the data volumes you manage and analyze today (both structured and unstructured data)? Base 389 Do not know 2% < 1 Tbyte 1 5 Tbyte 24% 26% Nordic organizations store a lot of data on disk and in separate systems. This data is in general not used entirely in the analysis, so there is a huge potential in defining and including all available data in a thorough Big Data analysis Tbyte 12% Tbyte 8% Tbyte Tbyte 4% 10% Tbyte 8% Tbyte 2% > TByte 5%

32 Company SAP Web Site About the survey The survey was conducted in March-April 2012 among CIO s, data warehouse managers, business intelligence professionals, IT managers, etc. The 450 respondents came from Sweden (193), Norway (91), Denmark (76) and Finland (90). The selected organizations are private and governmental all managing large data volumes today. 32

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