Ayanda Dlamini, LGR Telecommunications

Globally, big data is on the rise, but the local outlook is less positive

Gartner has predicted that next year, worldwide IT budgets will rise, and big data will be a contributing factor in job creation. According to the research company, by 2015 there will be 1.3 million IT jobs created in EMEA alone to support big data, making it the most active region in using big data, together with North America and Japan.

In a South African context, business feedback around big data has not been entirely positive, although growth and interest is on a slow increase.

Martin Rennhackkamp, CIO of PBT Group, believes that overall, South African businesses understand the need to extract value from their data, and therefore it is being understood as a relevant business tool for alleviating risk, supporting businesses with new product development, and even helping them predict customer behaviour patterns. “It is with this in mind that there have been numerous companies that have examined big data and certainly see its value – and the reality is that big data in SA is here to stay,” he explains.

“However,” he points out, “the investigation is critical, and if the investigation into big data proves positive, only then can the benefi ts it should offer be attained.”

Ayanda Dlamini, business development manager of LGR Telecommunications, believes that, in general, executives in the sales and marketing space are beginning to pay attention to big data as a way to leverage on the valuable customer data, but that it is to be done at the cost of not doing something else. “As CMO surveys indicate, paying attention to big data is one of the priorities for 2013, but this still needs to be within the allocated budget.”

According to Gary Allemann, MD of Master Data Management, the general attitude towards big data is that it is still early days. “Most companies are not looking at implementing big data, as a result of a lack of clear business case. Those few companies that are exploring the possibility of implementing big data are looking at it very much in an exploratory light, in an effort to understand where it can be used to add value to the organisation,” he says.

Alvi Pinheiro, EMC business unit manager at AxizWorkgroup, sees today’s executives’ general attitude as being somewhat optimistic, although he believes there is still a lot of work to be done overcoming obstacles. “Big data is certainly top of mind for most decision-makers, and is right up there with trending technologies such as cloud and social networking,” he says. “However, concern over obstacles such as security and data management remain.”

DEPLOYMENT BARRIERS

Alvi Pinheiro, AxizWorkgroup

Johannes Kanis, business group lead for server and tools at Microsoft SA, states that local companies have been producing unstructured and high-volume data for years, but haven’t been able to figure out how to gain critical insights and value from virtually any type of data, from anywhere. “Historically, customers threw away most of this data because of prohibitive storage costs and weak analysis tools. The trends are shifting. Spurred by plummeting storage and computation costs, and improved analytical tools, coupled with the value residing in this data, customers are now able to get new business insight and value from every bit of data they have access to in a cost-effective and scalable way.”

Dlamini believes it makes sense to consolidate data so that marketers, advertising and sales staff at all levels can understand the customer, the product, customer-product reaction as well as the perception of the customer towards products on offer. “The key challenges faced in the local perspective still remain the cost of implementation (hardware and software), as well as the high level of skills to design such analytical solutions around business needs.

(MIS)UNDERSTANDING BIG DATA

According to Allemann, the biggest barrier to entry at the moment is a lack of a clear business case for big data. “The majority of organisations do not see the requirement for big data and cannot articulate a clear business application. As a result of this lack of business case, there is no driver to implement technology.”

He believes there are also technical hurdles to consider, most notably the fact that considered benefits such as social media analytics are extremely difficult to implement. The technology is still new, and aspects such as natural language processing are unable to deliver as required.

“There is no doubt that big data as a concept is causing some strong reactions from companies,” Rennhackkamp states. “However, from a PBT perspective, we are finding that companies do not fully understand what big data is, and to be honest, there is no clear definition of this term as yet. The result is that many companies are left feeling that big data does not work for them and in fact has no real business value.”

He believes a real barrier to entry for big data today is ensuring a company understands the components of big data and how these can support its business drivers. “The reality is that big data only starts to add value to the business if it can be transformed to structured data and integrated with the other structured data that is already in the organisation’s business intelligence (BI) capabilities,” he says. “In fact, big data hardly ever generates completely new value (which some often believe is the case), but rather is focused on unearthing and augmenting additional insights that often complements or adds value.”

As a result, Rennhackkamp continues, it is important for decision-makers to fully investigate and understand the concept of big data, as not all organisations need it or even have access to big data. “Organisations must rather analyse what they need to do (evaluate what the problem is) and establish if big data is a solution, and if it is, what tools should be put in place to rectify the situation as best as possible,” he explains.

INVESTING IN BIG DATA

Without fully understanding big data, it may be difficult to determine what a reasonable percentage of IT budget spend for it would be, and experts suggest rather allocating part of the company’s research and development (R&D) budget to it, and determining what the return on investment (ROI) will equate to.

According to Allemann, any investment into big data at this stage should be very much on an R&D level, unless the organisation has a very clearly defined business case where the technology has already proven its ability to deliver the required results. “The investment should therefore typically be a very small percentage, depending on the organisation’s budget for R&D,” he says.

Rennhackkamp says it is very hard to determine a reasonable budget for big data, and in fact, some CFOs of companies are reluctant to set aside a budget for big data because of all the uncertainties. “As a result, before companies determine a budget, they should first focus on developing a big data ROI analysis.” Kanis agrees it is difficult to put an exact figure to big data budget allocation. “The fact is,” he explains, “the world is only beginning to understand that the big data deluge actually has a huge positive upside.” He believes the two most important computing trends changing the big data landscape are economics and technological advances.

According to Alleman, in conversations with more than 400 customers at two recent events, the insight gained was that companies have not deployed big data, as they do not see the benefit of this to their organisation. “As a result of this, it seems unlikely that South African companies will be looking to make significant investment into big data in 2013.

“In an international context, however, we have seen that big data technology is being used more successfully to manage semi-structured data as opposed to fully unstructured data,” he explains. Says Dlamini, organisations need to begin realising that analytics applied onto the massive pools of data at their disposal is the basis of competitive advantage. “LGR Telecommunications is participating actively in the space to advance and consolidate telecommunication-specific expertise that will enable the telecommunications sector to also leverage big data focus,” he says. “In small scale trials, it has been apparent that big data focus has great potential in micro-segment management, service and product design (even in telecommunications), as well as to enhance advanced analytics.”

He believes 2013 is set to see major advances in big data in the global scene, while adoption in the African market will not be at the same momentum.

Rennhackkamp states that PBT Group, as a specialist in the BI industry, has helped corporations implement big data into their organisations. “In doing so, we have discovered that by analysing their customers’ personal interactions on social media channels, our customers have succeeded in adding more characteristics to significantly broaden the 360-degree view of the customer. Through qualifying, classifying and quantifying customers’ commentary, they are now able to more accurately predict terminations (churn or lapses).

“Furthermore,” he continues, “through using a social media channel very intelligently, our customers have managed to conduct the equivalent of a 10-question survey by issuing a single short question. By applying various analyses on the responses, they are able to determine product strengths, weaknesses, areas that had to improve as well as suggestions for new services. Instead of being irritated to answer 10 questions, customers enjoyed giving a social media type response, which was loaded with good information.”