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How to Compete in the Data Economy
CONTENTS
product recommendations
A little later in the decade, online network-
oriented firms including Facebook and
LinkedIn offered services and features based
on network data and analytics. fraud detection
Since half of GE’s revenues in these ► Gas blade monitoring in turbines produces
businesses come from services, the data 588 gigabytes/day—7 times Twitter daily
volume
economy becomes critical to GE’s success.
Traditional
1.0 Analytics
Fast Business
3.0 Impact for the Data
Economy
Analytics 1.0—Traditional
Analytics 1.0 Traditional Analytics
• Data sources relatively small and
Analytics are not a new idea. To be sure, there structured, from internal systems;
has been a recent explosion of interest in the
topic, but for the first half-century of activity, • Majority of analytical activity was
the way analytics were pursued in most descriptive analytics, or reporting;
organizations didn’t change much. • Creating analytical models was a
time-consuming “batch” process;
This Analytics 1.0 period predominated for half • Quantitative analysts were in “back
a century from the mid-1950s (when UPS
rooms” segregated from business
initiated the first corporate analytics group in
the U.S.) to the mid-2000s, when online firms people and decisions;
began innovating with data. • Few organizations “competed on
analytics”—analytics were marginal
Of course, firms in traditional offline industries to strategy;
continued with Analytics 1.0 approaches for a • Decisions were made based on
longer period, and many organizations still experience and intuition.
employ them today.
Rapid Insights
1.0 Traditional 3.0 Providing Business
Analytics 2.0 Big Data Impact
• Primarily descriptive • Complex, large, unstructured
data sources • Analytics integral to running the
analytics and reporting business; strategic asset
• Internally sourced, • New analytical and
computational capabilities • Rapid and agile insight delivery
relatively small,
structured data • “Data Scientists” emerge • Analytical tools available at point
of decision
• “Back room” teams • Online firms create data-
of analysts based products and services • Cultural evolution embeds
analytics into decision and
• Internal decision operational processes
support
• All businesses can create data-
based products and services
Now, however, there are a variety of options The old formats haven’t gone away,
from which to choose in addition to these but new processes need to be
earlier tools: Database and big data developed by which data and the
appliances, SQL-to-Hadoop environments focal point for analysis will move
(sometimes called “Hadoop 2.0”), vertical and across staging, evaluation,
graph databases, etc. exploration, and production
applications.
In many cases the “data scientists” in large firms may be conventional quantitative
analysts who are forced to spend a bit more time than they like on data management
activities (which is hardly a new phenomenon).
Era 1.0: Traditional Analytics 2.0: Big Data 3.0: Data Economy
Timeframe Mid-1950s to 2000 Early 2000s to Today Today and in the Future
Culture, Ethos Very few firms “compete on Agile, experimental, hacking…new Agile methods that speed “time to
analytics”…”we know what we know.” focus on data-based products and decision”…all decisions driven (or
services for customers influenced) by data…the data economy
Type of analytics • 5% predictive, prescriptive • 5% predictive, prescriptive • 90%+ predictive, prescriptive
• 95% reporting, descriptive • 95% reporting, descriptive (visual) • Reporting automated commodity
Cycle time Months (“batch” activity) An insight a week Millions of insights per second
Data Internal, structured…very few external Very large, unstructured, multi- Seamless combination of internal and
sources available or perceived as source…much of what’s interesting is external…analytics embedded in
valuable external…explosion of sensor data operational and decision processes…
tools available at the point of decision
Today
Traditional
1.0 Analytics
• Primarily descriptive
analytics and reporting Fast Business
• Internally sourced, 3.0 Impact for the Data
relatively small, Economy
structured data
• Seamless blend of traditional
• “Back room” teams analytics and big data
of analysts
• Internal decision
2.0 Big Data • Analytics integral to running the
business; strategic asset
support • Complex, large, unstructured
data sources • Rapid and agile insight delivery