After reading Big Data The Management Revolution from the Harvard Business Review 90 (10) 60-66 the authors Brynjolfsson & McAfee highlight how data has transformed the way businesses manage their customers and gain consistent cometitive advantage and acknowledge the fact that you cant manage what you dont measure. Data collection software has enabled executives to measure data that allows them to know more about their business and helps to improve deciosion making and performance.

McAfee  refers to retail businsses with special reference to book shops as they were impacted the most with consumers moving more towards online shopping due to the fact that online businesses are able to collect very important buying behaviour data. The data they collect looks at the way consumers navigate through the webpage, things they look at, how promotions, reviews and page-layouts influence their behaviour and simularities across groups and individuals. From this data the online businesses developed algorithims that performed better every time the customer responded to or ignored a recommendation. Companies like Amazon used this to their advantage and put many book stores out of business as they were unable to access this data or even act in a timely manner.

In the past alot of management decisions were based on gut and intuition, however now they can measure and manage more precisely enabling them to make better and more informed decions and smarter predictions. Big data is a management revolution, however there can be challenges faced with organisations becoming a big data  enabled organisation such as the way they lead the orgainsation they may need to outsource scientists who can translate the data into useful business information. Some Business executives refer to big data as analytics, which in some cases can be true, however Mcafee states that there are three key differences; firstly volume. Volume refers to the amount of data that is created in a day, and McAfee states that this volume is doubling in size every 40 months or so. McAfee refers to Walmart as an example and states that they collect more than 2.5 petabytes of data every hour from its customer transactions, one petabyte is the equivalent of about 20 million filing cabinets worth of text showing how data has a great impact on the success of a corporation especially in a fragmented market where customers needs are forever changing. Secondly velocity, McAfee states that more businesses believe this aspect of the Big data movement is the most important and far more important than the actual amount. Real-time information allows executives to make decisions that make them more responsive then there competitors creating competitve advantage. Lastly, variety as big data can take the form of messsages, up-dates, images posted to social networks, readings from sensors, GPS signals from cell phones and more. As technology is becoming more advanced it has enabled programmes to collect new sources of information as well as making it more economical to store and collect data.

McAfee has proven that data driven companies perform better by the research that was carried ou. McAfee found that the use of data driven decision making enabled businesses to become 5% more productive and 6% moe profitable on average copmpared to their competitors. McAfee makes it apparent that not all businesses will be successful if they transition to using big data due to the fact they may not manage the change effectively.

McAfee sets out 5 areas that have particular importance to management when big data is implemented into an organisation:

1. Leadership:

Leadership needs to have vision & human insight by setting out clear goals, be able to define what success looks like and ask the right questions. The ability to see opportunities and understand how a market is developing, think creatively, propose truly novel offerings, articulate a compelling vision, persuade people to embrace it, work hard to realise it and deal effectively with customers, employees, stockholders and the stakeholders. McAfee believes that successful companies of the next decade will be the ones whos leaders hold all these credentials as well as changing the way the organisation makes decsions.

2. Talent Management:

Key techniques for using big data are rarely taught, data scientists and other professionals skilled at working with large quantities of information are key and very hard to find so it is important to ensure you have someone with these expertise working within the organisation.

3. Technology:

This refers to the tools available to handle volume, velocity and variety of the big data and the software available to manage it. These technologies require a skill set that is new to most IT departments as they will need to integrate there internal and external sources of data.

4. Decision Making:

Knowing the people who understand the problems faced by the orgainsation is important as that will enable executives to put the right people together with the right data and ensure they have people who have problem solving techniques who are able to exploit them.

5. Company Culture

Moving to big data can create enormous cultural challenges within the organisation as well as privacy concerns and will involve breaking bad habits such as making decsions based on hunches and instinct. Alot of companies pretend to be more data driven then they actually are in order to supoort the decisions they have made, however it is is very easy to find misleading patterns in the data.

McAfee concludes that data-driven decision making is the way forward in order for companies to gain competitive advantage and insights into the markets they trade in.

McAfee, A., & Brynjolfsson, E. (2012). Big data: the management revolution. Harvard Business review, 90(10), 60-66