Executive Pulse seeks input from Canadian leaders on vital issues that affect our business and economy.
The continued growth of big data and the ability to utilize it is transforming how Canadian companies do business, understand their customers' needs and plan for the future. Dino Trevisani, the president of IBM Canada, and Saul Klein, dean of the Gustavson School of Business at the University of Victoria, look at its promise, and limits.
Where does managing data fit into Canadian businesses' competitiveness?
Dino Trevisani: The Canadian business environment is awash in data, which puts managing it firmly at the centre of businesses' competitiveness. The barrier to competitiveness, however, is access. Eighty per cent of data has been essentially invisible to computers and, therefore, is of limited use to us. Think about a conversation a business operator has with their suppliers; the information a medical student gleans from a textbook; or all that is captured in sight, sound and motion. All of this data is "unstructured" and cannot be reliably analyzed by computer systems today. So, while managing data is of central importance to competitiveness, it's a resource that's been largely out of reach.
Has the promise of big data, data analysis and related concepts been overhyped?
Saul Klein: I suspect most of these things are overhyped. The promise is still there, but the challenge with it is it's as much art as it is science. The science has evolved to the point where you can analyze the data, you can mine it, you can do all sorts of interesting things with it, but at the same time you have to be asking the right kinds of questions. Particularly with large data sets, invariably you are going to find relationships. The challenge is in finding out which ones are meaningful.
Do most business or public-sector leaders understand what big data is and how to use it effectively?
DT: Yes. What they're focusing on now is how to unlock the value of the unstructured data. They know how critical unstructured data will be to the future of their business, how disruptive it will be and how important it will be to invest in it.
We did a survey of more than 5,000 C-Suite executives that found executives from the highest performing companies place a significantly higher priority on acquiring cognitive capabilities [that make sense of unstructured data] than their peers in more market-following enterprises. For example, 8 out of 10 health-care executives who are familiar with cognitive believe it will have a critical impact, and 95 per cent plan to invest to acquire cognitive capabilities. In banking, 90 per cent of executives familiar with cognitive expect it to have a disruptive impact. So clearly, the construct that by harnessing cognitive computing, we can transform entire businesses and industries, is gaining traction globally.
Does the Internet of Things change anything?
SK: It just adds massive amounts of more data. Up to now, we've been tracking individuals' behaviour by looking at essentially the crumbs that are left behind. As the Internet of Things comes on board there's just way more collection coming. For example, the fact that your fridge is reporting what kind of groceries you're buying to any device that's connected now allows much more tracking of your behaviour in real time. The change is, as the Internet of Things comes on board, much more of that tracking happens in the background without people really knowing how much they're being tracked. It's already happening now, but it's just going to explode.
How do you present the results of data mining in a way that organizations can quickly understand and use?
DT: First, how data is delivered is important. Previously, business decisions were based on an analysis of historical and past data. Now, leaders have an opportunity to make strategic decisions based on an incredible amount of real-time data.
Second, companies need to have a clear picture of knowing what type of data to curate and collect because business advantage comes from using data to identify insights and take actions. Cognitive computing allows enterprises to do this faster and better than ever before by finding the meaning in the 80 per cent of all data that is unstructured and had been inaccessible until now.
Does relying on data mining stifle innovation?
SK: I think it helps innovation because fundamentally it's about getting insight into consumer behaviour and what it does is it reduces risks around decision-making. So through those better insights we can target our innovations more effectively, we've got a better understanding of what's likely to work and not work. If you think about it, innovation has been a bit of a crapshoot; you're kind of throwing darts in a dartboard and hoping they're going to hit.
Given that the bulk of Canadian businesses are small- and medium-sized, do they need to invest in the technology and talent needed to use data effectively?
DT: In Canada, these enterprises need to invest in partnerships as much as they do in these technologies and resources. By pairing global industry with academia, small business and startups, providing technology tools that would have otherwise been out of reach, as well as access to industry researchers and a global market view, they'll be better positioned to ensure that their growth and innovation efforts hit their mark, so they can move quickly out of the innovation labs and into the market.
Have ways of making sense of the data and using it to make decisions lagged the volume of data available?
SK: Invariably, the technology outpaces our ability to use it so we're playing catch up. If you talk to the folks on the technical side, they can analyze anything but that doesn't cope with the real problem, which is judgment. It's trying to extract meaningful information from the data, not being able to mine the data and process it, that is the biggest challenge.
What about growing concerns over privacy and security and data collection?
DT: Like the opportunity of data mining, building the right security systems and processes is also a competitive advantage. Cognition is making its way into cars, buildings, roadways, business processes, fleets, and supply chains. This means securing every transaction, piece of data, and interaction is now essential to ensure trust in the entire system, in your brand and reputation.
Does Canada have the talent capable of working with data collection and analysis technologies and next-generation business intelligence?
SK: Yes, for sure. We're seeing specialist Canadian companies coming to market. We're seeing within universities more of a focus on data analytics, building capacity. There's no reason why we can't compete well in that world with more insight and more understanding.
Responses have been edited and condensed.