Business analytics against the complexity of big data and the Internet of Things
The digitalization of private life and business models, with the proliferation of clouds, mobility, social media, and smart objects, poses numerous questions regarding the collection, use and the potentiality of enormous amount of data. That’s how analytics can help companies manage the growing complexity of current society.
Today, it is taken for granted that social media, mobility, analytics, and cloud computing, now defined with the acronym “Smac”, are guiding our private and professional habits towards a new digital frontier, revolutionizing purchasing behaviour, ways of communicating, and business models. But another burgeoning phenomenon promises to accelerate the digital disruption: the Internet of Things is destined to add another level of control to our lives, transforming consumption, actions, physical and even emotional states, all on the basis of mathematical calculations.
According to Cisco and NetConsulting, in 2013 the number of intelligent objects reached 10 billion globally, and in 2020 that number will rise to 50 billion. Finding applications in a variety of fields from automation to domotics to medicine, they will generate terabyte upon terabyte of information that will travel through the web and feed company databases.
We are in the age of big data, where anyone can access knowledge and develop their own business even if they have limited capital. It is no coincidence that Jeremy Rifkin speaks of the “third industrial revolution at zero marginal cost”, because all you need is a simple Internet connection in order to take advantage of digital opportunities, even entering the market as an innovator, without rigid entry barriers.
Bits are becoming predictive knowledge (mathematical deductions based on the past can be used to make future decisions). But on the other side of the coin, tracing every single operation generates an information surplus and the risk is that you won’t be able to isolate the correct information to focus on, losing your objectives in useless or irrelevant details. Archiving and maintaining data is also very costly, due to both the need for adequate security measures to minimize the danger of theft or violation, and because it requires high-performance and high-volume storage systems.
Then there is the privacy issue for those who generate and share (knowingly or not) their own information online or via smart objects. To whom does this information belong? Is it legal for companies to consider themselves the owners of users’ personal information? As Alex “Sandy” Pentland of the MIT Media Lab suggested in an interview with the Harvard Business Review, yes, insofar as we reach a “New Deal on Data”, that is a future scenario characterized by total transparency. The individual must be aware of what will happen to their information, freely choosing to allow access to it and for which purposes. Only in this way can the citizen, the client, or the employee understand the effective advantages to be gained from sharing their personal information with third parties.
If big data and analytics are ultimately used to increase sales and profits, they also allow for improvements to the services offered (user loyalty is achieved only through positive experiences and satisfaction, with interesting and personalized offers). Today, companies like Google and Facebook are striving to justify to their millions of users all the data that they swallow up, and must always be able to offer services that meet users’ expectations (no one gives something for nothing).
To make the Internet of Things useful, we need an Analytics of Things. This will mean new data management and integration approaches, and new ways to analyze streaming data continuously. I'm pleased that SAS is focusing on this important area.
Thomas H. Davenport
President's Distinguished Professor, Babson College
Co-founder and Director of Research, International Institute for Analytics
Author of Competing on Analytics and Big Data at Work
Business analytics tools can help companies extricate themselves from the complex world of big data and the Internet of Things, first and foremost through the identification and rapid processing of valuable information, which allows companies to focus on activities that are truly effective for the user and therefore for the business (it makes no sense to ask for data that won’t be used, not to mention running the risk of exacerbating the person providing it). Secondly, they offer the possibility of prompting a process of “democratization” and knowledge sharing that begins from within the business ecosystem.
Although business analytics were originally the exclusive prerogative of the Chief Information Officer, top management, and the Chief Marketing Officer, today access to information is extending to the base of the pyramid. We are witnessing a cultural evolution: management is ready to open their “vaults” to make companies’ information assets available, with the requisite policies and protections, thus enabling a continually improving cycle in terms of internal productivity and customer satisfaction (services improve in terms of quality, speed, and timeliness).
Technology, too, is evolving according to this change in mind-set: analytics are becoming increasingly easy and intuitive to use and in terms of reading of reports. SAS has spoken of “visual analytics” because users, especially those without an IT background, need to be able to identify and visualize precise and complete data and aggregates that are relevant for their business, without having to worry about the complexity behind the collection and processing of big data.
Internet of Things
facts and predictions
- The total economic value-add from IoT across industries will reach $1.9 trillion worldwide in 2020, anticipates Gartner.
- Fifty billion devices will be connected to the Internet by 2020 according to Cisco
- Wide deployment of IoT technologies in the auto industry could save $100 billion annually in accident reductions, according to McKinsey.
- The industrial Internet could add $10-15 trillion to global GDP, essentially doubling the US economy, says General Electric.
- According to a report from The Economist, seventy-five percent of global business leaders are exploring the economic opportunities of IoT.
- Cities will spend $41 trillion in the next 20 years on infrastructure upgrades for IoT, according to Intel.