I recently watched a terrific TED Talk by Trisha Wang on Big Data and how it's used (often ineffectively) in organisations to drive strategic change. Her points beautifully illustrate the importance for leaders to resist the lure of the latest 'shiny idea in fancy packaging' when developing strategy.
For example, I recently had a conversation with a prospective client who wanted help articulating her Big Data strategy. When I asked her why she needed the strategy, she answered "I'm not sure...but I'll know when I've got one.
According to Trisha, Big Data is a US $122 Billion industry today. However, research has shown that Big Data, cannot be relied on to create a profit on its own. 73 percent of big data projects today cost more to implement than they generate. Further, employees are not making better decisions based on the data and the promised breakthrough ideas are not appearing.
She argues that Big Data can work in contained environments like predicting loads on electric power grids, delivery logistics or genetic code. However, when it comes to a more dynamic everyday environment (where humans are involved and conditions are constantly changing) Big Data predictions falls short of the mark.
The key take-away message is that data is a critical business tool and it can make a significant contribution to any business strategy. However, it is a means to an end, not an end in itself. Use it to help build clarity about who your real customers are, what they value and how you can create value for them. From there, everything else will follow.