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It seems that almost every organization is on the "big data" bandwagon. But, as this author writes, rallying around the newest, new thing is one thing. Understanding what big data is and how it can move your organization forward to lead the pack is quite another. Readers will learn how to use big data to create sustainable competitive advantage.
"Big Data: A New Competitive Advantage" blazed a headline in a recent Ivey Business Journal[1]. But the fact is that while such claims are common, they may also be misleading. "Big data" is not new and creating and sustaining a competitive advantage is rarely easy. The key question is "How do we extract the kinds of useful, meaningful managerial insights from big data that will result in a sustained competitive advantage?" This article will suggest several ways that managers can mine big data to enable their firm to establish and sustain competitive advantage.
BACKGROUND
Many firms now manage vast daily inflows of raw data. However, data by itself is just a cost item. What's creating the excitement - and headlines - is the possibility that used properly and strategically big data has the potential to create competitive advantage. Barry Beracha, the former Chief Executive of the Sara Lee Bakery Group, has been quoted as providing the maxim of the data-driven management school: "In God we trust. All others bring data."[2] However, few executives can process modest amounts of raw data, let alone gigabytes of the same that flow into many firms daily. Further, this data is often of very high quality, precluding the use of the traditional wailing of "the data is no good," often just a convenient excuse for ignoring it.
Many are now talking about the value and use of big data. But the fact is that there are very few business analytics professionals who understand the business and the business issues and the analytics required to add-value and extract relevant information from the data. Analytics is to management as a light bulb is to darkness: it is illuminating and helpful in revealing both future opportunities and pitfalls. Descriptive analytics seeks to understand past data and is widely used. Predictive analytics seeks to understand the future. This is a challenge for many...