Big Data: Some Companies Are Over Their Head — Suffering from 'Insight Deficit'

Over half of global enterprises are allocating money to spend on Big Data IT investments over the next two to five years, and a third of all global companies will begin spending on Big Data technologies over the next year.  That’s the conclusion of a report by Ovum research on Big Data.

Ovum is predicting big things for Big Data.  And , of course, they’re not the only ones — it’s hard to escape news and analyst reports describing the benefits that Big Data will bring organizations. Tony Baer, principal analyst at Ovum and author of the report, said that “the number of use cases of early adopters is increasing, with our survey showing that uptake will soon be widespread.  The need for the technology crosses industry boundaries, with use ranging from classic customer segmentation analyses, to customer churn prevention, managing smart utility grids, public transportation networks, to anti-terrorism initiatives.”

Other analysts are urging caution though.  After all, it’s one thing for Walmart and the US Government to be adopters of Big Data technology.  How much sense does it make for other organizations, organizations with less data and less resources to spend?  The Ovum report found that as many as 38 percent of the companies that reported interest in investing in Big Data were small to medium sized companies.  Can these smaller companies achieve a good Return on Investment by using Big Data?  The results may have a lot to do with the make-up of the culture and the analytic skills of the organization.

Shvetank Shah, Executive Director at Corporate Executive Board, wrote for InformationWeek that “even as companies invest eight- and nine-figure sums to analyze the information streaming in from suppliers and customers, fewer than 40% of employees have the right processes and skills to make good use of the analysis. Think of this as a company’s insight deficit. To overcome it, Big Data needs to be complemented by ‘big judgment’.”  A Corporate Executive Board study found that 62 percent of businesses make poor decisions when they attempt to analyze their data.  And, in situations where Big Data has been used to analyze marketing, the report found that two-thirds of the marketing team suffered from ‘analysis-paralysis’ when faced with analyzing a ‘data deluge’.

The Corporate Executive Board report argues that organizations that want to adopt Big Data must invest not only in the technology but also understand that they must build out an internal culture that is analytically savvy, and doing that may be more difficult than simply acquiring the technology.