Big Data – The Future of Management

The likes of Amazon and Google have had a rather big head start in this era of digital data, leaving many traditionalists long in its wake. But its easy to see why companies that are born digital tend to have a greater understanding of their consumer markets. Simply put, the digital lynchpins are engaging vigorously with Big Data, extrapolating various unique insights that only strengthens managerial and strategic decisions. In the past we would use analytics as a means of making business decisions, much of this left down to “gut-feelings” or “roundabout” guesses. The Risks were higher. However, what we have now is an articulate understanding of the market with the capabilities to manipulate Big Data.

McAfee & Brynjolfsson (2012) explores just what makes Big Data so special and sheds light on how data-driven companies perform. Zooming in on some contemporary issues they illustrate the before and after effects of Big Data on a US airline. The before demonstrates poor service scheduling, bad weather predictions and a fleet of unhappy customers. Fearing that the company was losing millions in revenue, they sought decision-support technologies that would predict arrival estimates. Thereby compiling data of weather, flight schedules and a backlog of flight history, the company could predetermine flight arrivals. This provided a constant flood of information and pattern matching to assimilate exact arrivals and next departures.

“It’s a simple formula: Using big data leads to better predictions, and better predictions yield better decisions” McAfee & Brynjolfsson (2012)

So it’s not just digital companies that will reap the future benefits of big data. What is now needed is “a new culture of decision making”. We must remember the value of human input and impact of managerial decisions. The data is all there, it’s just how we decide to manipulate it that will dictate our success. Online Databases are rife with business intelligence that remain rich in variety and value, more the reason to have many eyes on one pie. The risks may be mitigated, but the stakes in this case are higher with competitors having that same access and same opportunity. Laggards should see this as an opportunity to recast their gaze on arguably the biggest technical advancement since the inception of the internet. Big Data will mark a changing of the guard for how we base our future decisions, those that fail to keep up with the curve will simply be left in its wake.

McAfee, A. & Brynjolfsson, E. (2012) Big Data: the Management Revolution. Harvard Business Review