Navigating the cloud of Big Data hype, lessons to live by. Andy Beale January 2015

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1 Navigating the cloud of Big Data hype, lessons to live by Andy Beale

2 How much will be spent on Big Data? How much are forecasters saying will be spent on Big Data? $51 billion by 2017 Source: Wikibon 2014 INFORM TRANSFORM OUTPERFORM Page 2

3 Technology companies create confusion Navigating the technology hype and information requirements for the business Definitions of Cloud : Mist, fog and haze n Confuse, darken and obscure v We are going to cut through the hype and focus on what really matters how data and technology are supporting real world business success INFORM TRANSFORM OUTPERFORM Page 3

4 Why am I interested? INFORM TRANSFORM OUTPERFORM Page 4

5 What did this result in? Predictive Robust Accessible Contextualised Actionable (so what?) INFORM TRANSFORM OUTPERFORM Page 5

6 Silos between the Business and Data/IT Data & IT is not leveraged to support business success staff groups struggle to communicate Business focus Data / IT focus I just want to know what sales figures are likely to be Operations Shareholders Data warehouses Hosting The business needs to tell us what it needs Finance Petabytes Clients Statistics INFORM TRANSFORM OUTPERFORM Page 6

7 Lesson 1: Take control Control and govern the design, development and pace of improvement of the insight engine Basic metrics are frequently not accessible Complex analytical tasks are frequently outsourced to specialist vendors Calculations are undertaken in black boxes INFORM TRANSFORM OUTPERFORM Page 7

8 Case study 1 a large health insurer A health insurance business wanted to use cutting edge risk predictions Baseline investigation identified a lack of clarity of risk score definitions Challenges getting access to data and linking sufficient data, at the individual level meant that the bought tool had limitations Lack of insight into the return of investment that could be achieved from alternative preventative interventions The insurer invested in its own insight engine and a process for continuous improvement INFORM TRANSFORM OUTPERFORM Page 8

9 Lesson 2: Get the data in good condition Improve the quality of data to transform the way the business operates Legacy data is frequently of poor quality Start small to gain trust Create new data governance systems and roles INFORM TRANSFORM OUTPERFORM Page 9

10 Case study 2 government department A minister from a government department was consistently receiving conflicting data The rest of the department and was in a similar situation The department set about creating one version of the facts A governance system was established An accountable officer for data and analysis was created at board level A cyclical process to: select metrics, ensure clear definitions and time periods was established A quality assurance process using many eyes was implemented Seven years later this approach is recognised as being good practice and underpins the performance regime of the department INFORM TRANSFORM OUTPERFORM Page 10

11 Lesson 3: Build flexibility Building innovative processes into your analysis & IT architecture creates business resilience The business environment changes These changes have implications for analyses and IT Building in experimentation processes and rapid delivery cycles into analysis and IT provides flexibility INFORM TRANSFORM OUTPERFORM Page 11

12 Case study 3 a major service integrator A service integrator won a large outcomes based contract Within the contract a range of predicted service volumes were given, but there was a lack of a clear evidence on what interventions were likely to deliver the best outcomes at what cost Because significant sums of money were at risk, the integrator invested in its own risk assessment tool, as well as a skunkworks analysis group They tested and refined what interventions should be used with which group of service participants to reduce risk and maximise the chance of a positive outcome INFORM TRANSFORM OUTPERFORM Page 12

13 Lesson 4: Customer data Influence customer behaviour in a way that wasn t possible a decade ago Customer satisfaction was seen as the role of market research companies, and was divorced from day to day business decisions Today customer loyalty and behaviour is a critical business objective This requires responsibly linking data from disparate sources at the level of the individual Source: Institute of Government INFORM TRANSFORM OUTPERFORM Page 13

14 Case study 4 Online retail Changes in using customer data have been driven by developments in online retail Retailers link your personal data and your online shopping experience Many retailers undertake AB testing comparing ways in which consumers interact with their websites Recommendation engines and personalised user experiences are now commonplace Knitting together data at the individual level from multiple sources are now increasingly being used in all walks of life INFORM TRANSFORM OUTPERFORM Page 14

15 Lesson 5: Invest in data architecture Establish who needs to know what & how to access a single trusted version of the facts Businesses that successfully leverage facts focus on the data architecture and governance The approach can also identify areas that should be automated freeing up data scientist resources INFORM TRANSFORM OUTPERFORM Page 15

16 Case study - Uber Traditionally cabs could be booked over the phone or hailed at the roadside Uber executives identified that there were some information problems with the taxi business customers did not necessarily know if/when their cab would arrive. Drivers also had no insight into their customers Uber improved customer/driver experience by improving reliability, communication and quality through app delivered data and information Since its foundation in 2009 this approach has been massively disruptive and successful INFORM TRANSFORM OUTPERFORM Page 16

17 Lesson 6: Challenge perceived wisdom Continually seek to create new insights through more scientific approaches The Moneyball story Oakland Athletics baseball team got to the playoffs in both 2002 and They answered the question Which players offer the best value for money for us? and acted upon it INFORM TRANSFORM OUTPERFORM Page 17

18 Committing to fact-based management Delivering business performance through data & IT is a team game requiring a shared language High performing businesses create fact-based management approaches with "one version of the truth" and intelligence skunkworks to deliver new insights. The journey is not easy. It requires a team effort involving different aspects of businesses who have traditionally worked in silos and don t speak the same language. Find a common language and co-develop a route map incorporating not just data and technology, but also people and process issues. HEALTH WARNING Ignore data governance and managing culture change at your peril. INFORM TRANSFORM OUTPERFORM Page 18

19 The lessons 1. Take control of your insight engine 2. Work hard to get the data in good condition 3. Build flexibility into your analyses and systems 4. Customer data has become the secret sauce 5. Invest in your data architecture 6. Do not be satisfied with perceived wisdom INFORM TRANSFORM OUTPERFORM Page 19

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