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FOURSTRATEGIESTOCAPTUREANDCREATEVALUEFROMBIGDATA
Parise,S.,Iyer,B.,&Vesset,D.(2012).FOURSTRATEGIESTOCAPTUREANDCREATEVALUEFROMBIGDATA.IveyBusinessJournalOnline,,1.Retrievedfrom
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Abstract(summary)
Today,boththesourcesandvolumeofdatacollectedhaveexploded.Itisnowpossibletocollectclickstreamdataabouteverypotentialcustomerinteractionwithyourwebsite.
Whilethisisconceptuallypossible,itrequirestheimplementationofnewprocesses,technologyandgovernancemechanismsthatarecollectivelybeingreferredtoasbigdata.
Today,bigdataisbigbusiness.Withthecostofdatacaptureandacquisitiondecreasingatarapidrate,therealvalueofBigDatawillbeinitsuse.Companiesthateffectively
createandimplementBigDatastrategiesstandtogainacompetitiveadvantage.Bigdatastrategiesneedtotakeintoaccountbothtransactionalandnontransactionaldata.In
addition,thefocusneedstoextendbeyondusingBigDatatoanswerknownquestions,toexperimentanddiscovertrendsthatcouldhelpmanagersconsiderdecisionsand
opportunitiestheycouldneverhaveimaginedbefore.

FullText
Headnote
Companiesthateffectivelycreateandimplementbigdatastrategiesstandtogainacompetitiveadvantage.Readerswilllearnhowtobuildthatadvantagefromtheseauthors.
Fiveyearsago,mostcompaniescollecteddatathatwereapartoftheirdailytransactionsandstoredtheminadatabase.Thisdatawasusedprimarilytokeeptrackofoperations
orforecastneeds.Today,boththesourcesandvolumeofdatacollectedhaveexploded.Itisnowpossibletocollectclickstreamdataabouteverypotentialcustomerinteraction
withyourwebsite.Marketerscanalsocollectinformationabouteveryconversationpeoplearehavingabouttheirbrand.Thesesourcesofdatahavecreatedmoderndaytreasure
trovesthatcanbeminedtogleaninsightsintoproducts,servicesandcustomers.Whilethisisconceptuallypossible,itrequirestheimplementationofnewprocesses,technology
andgovernancemechanismsthatarecollectivelybeingreferredtoasbigdata.Today,bigdataisbigbusiness.
Wedefine"bigdata"asacapabilitythatallowscompaniestoextractvaluefromlargevolumesofdata.Likeanycapability,itrequiresinvestmentsintechnologies,processesand
governance.TheresearchfirmIDCforecaststhatthebigdataservicesandtechnologymarketwillgrowinvaluefrom$3.2billionin2010to$16.9billionin20151.
BIGDATAFRAMEWORK
Inourworkwehavedevelopedaframework(Figure1)tounderstandbigdatastrategiesandthetechniquesusedwitheachstrategy.Thefirstdimensionthatweconsideris
labeledbusinessobjective.Whendevelopingbigdatacapabilities,companiestrytomeasureorexperiment.Whenmeasuring,organizationsknowexactlywhattheyarelookingfor
andlooktoseewhatthevaluesofthemeasuresare.Whentheobjectiveistoexperiment,companiestreatquestionsasahypothesisandusescientificmethodstoverifythem.
Theseconddimensionthatweconsiderislabeleddatatype.Intheirnormalcourseoffunctioning,companiescollectdataontheiroperations(e.g.,sales)andcaptureitintheir
databasethathasastructureorschema.Wecallthistransactionaldata.Inotherinstances,companiesdealwithdatathatcomefromsourcesotherthantransactionsandare
typicallyunstructured(e.g.,socialmediadata).Thiscombinationresultsinfourquadrants,eachrepresentingadifferentstrategy:performancemanagement,dataexploration,
socialanalytics,anddecisionscience.Weexplaineachstrategyinthenextsection.(Figure2providesalistofpopularbigdatatechniquesandvendors).
FOURBIGDATASTRATEGIES
1.PerformanceManagement
Performancemanagementinvolvesunderstandingthemeaningofbigdataincompanydatabasesusingpredeterminedqueriesandmultidimensionalanalysis.Thedatausedfor
thisanalysisaretransactional,forexample,yearsofcustomerpurchasingactivity,andinventorylevelsandturnover.Managerscanaskquestionssuchaswhicharethemost
profitablecustomersegmentsandgetanswersinrealtimethatcanbeusedtohelpmakeshorttermbusinessdecisionsandlongertermplans.
Mostbusinessintelligencetoolstodayprovideadashboardcapability.Theuser,oftenthemanageroranalyst,canchoosewhichqueriestorun,andcanfilterandrankthereport
outputbycertaindimensions(e.g.,region)aswellasdrilldown/uponthedata.Multipletypesofreportsandgraphsmakeiteasyformanagerstolookattrends.Abigbenefitfor
reportdevelopersisthattheycaninteractwithdifferentaspectsofbusinessdataincludingHR,marketing,sales,customerservice,andmanufacturingdata,andgetmultiple
perspectivesofhowthebusinessisdoing.
BizTech,aleadinginformationtechnologyservicesfirmintheMidAtlanticregion,ishopingtousebusinessintelligencetohelpitgrowsales.Foundedin2001byTomConnolly,
BizTech's2011revenueswereapproximately$14M.TombelievesthatsignificantimprovementinmeasuringandreportingperformancecouldhelptakeBizTechtothenextlevelof
growth.Inparticular,BizTechplanstouseOracle'sCRMOD(OnDemand)businessintelligenceapplicationtoimproveitsopportunitymanagementprocessthatinvolves
generating,reviewing,andactingonleads.Thecompany'ssalesrepresentativesandconsultantswillbeabletogeneratenewpipelinereports,includingsummariesbypractice,
regions,andsalesrepresentatives.Thesereportswillbeactivelyreviewedinweeklypracticemeetings,whichwillpromotespecificpipelinetargets.Inaddition,learningfromthese
reportscanbetieddirectlytosalesrepresentatives'skillsdevelopment,coaching,andrecruitmentstrategy.
Thegoodnewsisthefunctionalityandeaseofuseofbusinessintelligencetoolshasimprovedgreatlyoverthepastseveralyears.Ifdesignedandimplementedeffectively,these
toolsgivemanagersawindowintoavastamountofbusinesstransactionsthatcanhelpwiththeireverydaydecisionmaking.Themainchallengeistoensurethatthequalityand
completenessoftransactionsenteredintothesystemortheresultwillbe"garbagein,garbageout."Also,toguaranteeacompletepictureofthebusiness,multipledatabases
acrossfunctionshavetobeintegrated.
2.DataExploration
Dataexplorationmakesheavyuseofstatisticstoexperimentandgetanswerstoquestionsthatmanagersmightnothavethoughtofpreviously.Thisapproachleveragespredictive

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modelingtechniquestopredictuserbehaviorbasedontheirpreviousbusinesstransactionsandpreferences.Clusteranalysiscanbeusedtosegmentcustomersintogroupsbased
onsimilarattributesthatmaynothavebeenonanalysts'radarscreens.Oncethesegroupsarediscovered,managerscanperformtargetedactionssuchascustomizingmarketing
messages,upgradingservice,andcross/upsellingtoeachuniquegroup.Anotherpopularusecaseistopredictwhatgroupofusersmay"dropout."Armedwiththisinformation,
managerscanproactivelydevisestrategiestoretainthisusersegmentandlowerthechurnrate.
Withanincreasedemphasisondigital,inboundmarketing,organizationswanttoattractprospectstotheirwebsitewithengaging,robust,andtargetedcontent.Running
experiments,organizationscantesttwowebssites,eachcontainingdifferentcontentsuchaswhitepapersanddemos,eventssuchaswebinars,andlandingpagesandleadform
designs.Theresultsoftheseexperimentscanhelppredictwhichcombinationofthesevariablestwillleadtothehighestconversionrateofsitevisitorstoqualifiedleads,and
qualifiedleadstocustomers.
ThelargeretailerTargetuseddataminingtechniquestopredictthebuyinghabitsofclustersofcustomersthatweregoingthroughamajorlifeevent.2Predictingcustomerswho
aregoingthroughbiglifechangessuchaspregnancy,marriage,anddivorce,isimportanttoretailerssincethesecustomersaremostlikelytobeflexibleandchangetheirbuying
habits,makingthemidealtargetsforadvertisers.Targetwasabletoidentifyroughly25products,suchasunscentedlotionandvitaminsupplements,thatwhenanalyzedtogether,
helpeddeterminea"pregnancyprediction"score.Targetthensentpromotionsfocusedonbabyrelatedproductstowomenbasedontheirpregnancypredictionscore.Theresult:
salesofTarget'sMomandBabyproductssharplyincreasedsoonafterthelaunchtheirnewadvertisingcampaigns.
Theriseinrobuststatistical/analyticaltechniquescanleadtofast,directresultsfordataexploringorganizations.Thebigchallengeisthelackofqualifiedstatisticianswith
expertiseinthelatestbusinessanalyticaltechniques.Anotherchallengeisarounddataprivacy/policyissues.Organizationsneedtothinkthroughthemosteffectivewaytousethe
resultsoftheirdataminingtechniquestoimprovethecustomerexperience,andnotmakecustomersfeelthatretailersare"spying"onthem.Forexample,Targethadtoadjust
howitcommunicatedthispromotiontowomenwhoweremostlikelypregnant,onceithadlearnedthattheinitialadvertisinghadmadesomeofthemupset.2Asaresult,Target
madesuretoincludeadvertisementsthatwerenotbabyrelatedsothebabyadswouldlookrandom.
3.SocialAnalytics
Socialanalyticsmeasurethevastamountofnontransactionaldatathatexiststoday.Muchofthisdataexistonsocialmediaplatforms,suchasconversationsandreviewson
Facebook,Twitter,andYelp.Socialanalyticsmeasurethreebroadcategories:awareness,engagement,andwordofmouthorreach.3Awarenesslooksattheexposureor
mentionsofsocialcontentandofteninvolvesmetricssuchasthenumberofvideoviewsandthenumberoffollowersorcommunitymembers.Engagementmeasuresthelevelof
activityandinteractionamongplatformmembers,suchasthefrequencyofusergeneratedcontent.Morerecently,mobileapplicationsandplatformssuchasFoursquareprovide
organizationswithlocationbaseddatathatcanmeasurebrandawarenessandengagement,includingthenumberandfrequencyofcheckins,withactiveusersrewardedwith
badges.Finally,reachmeasurestheextenttowhichcontentisdisseminatedtootherusersacrosssocialplatforms.Reachcanbemeasuredwithvariablessuchasthenumberof
retweetsonTwitterandsharedlikesonFacebook.
Socialmetricsarecriticalsincetheyhelpinformmanagersofthesuccessoftheirexternalandinternalsocialdigitalcampaignsandactivities.Forexample,marketingcampaigns
involvingcontestsandpromotionsonFacebookcanbeassessedthroughthenumberofconsumerideassubmittedandthecommunitycommentsrelatedtothoseideas.Ifthe
metricsindicatepoorresults,managerscanpivotandmakechanges.Forexample,lowFacebookengagementmaymeanmoreinterestingandinteractivecontentneedstobe
created.
Withrecentadvancementsinsocialmeasurementtechniques,wecannowcalculateone's"digitalfootprint"inthesocialmediaworld.CompanieslikePeerIndexandKloutcan
measureadigitaluser'ssocialinfluence.AKloutscorerangesfrom1to100,basedontheiralgorithminvolvingnumberoffollowers,retweets,theinfluenceofthefollowers
themselves,andothervariables.Marketersareusingsocialmetricstoidentify"influencers,"thosewellfollowedindividualswhoarediscussingtheirparticularbrandandcanserve
asabrandadvocate.UsingKlout'sservices,VirginAmericaidentified120individualswithhighKloutscoresandofferedthemafreeflighttopromotetheirnewTorontoroute.4
Theseindividualswerenotobligatedtowriteabouttheirexperience.But,betweenthese120individualsandanother144engagedinfluencers,thecampaignresultedinatotalof
4,600tweets,7.4Mimpressions,andcoverageintopnewsoutlets.Thus,thecampaigncreatedahighbrandawarenessofthenewairlineroute.
Socialanalyzersneedaclearunderstandingofwhattheyaremeasuring.Forexample,aviralvideothathasbeenviewed10Mtimesisagoodindicatorofhighawareness,butitis
notnecessarilyagoodmeasureofengagementandinteraction.Furthermore,socialmetricsconsistofintermediate,nonfinancialmeasures.Todetermineabusinessimpact,
analystsoftenneedtocollectwebtrafficandbusinessmetrics,inadditiontosocialmetrics,andthenlookforcorrelations.Inthecaseofviralvideos,analystsneedtodetermineif,
afterviewingtheYouTubevideos,thereistraffictothecompanywebsitefollowedbyeventualproductpurchases.
4.DecisionScience
Decisionscienceinvolvesexperimentsandanalysisofnontransactionaldata,suchasconsumergeneratedproductideasandproductreviews,toimprovethedecisionmaking
process.Unlikesocialanalyzerswhofocusonsocialanalyticstomeasureknownobjectives,decisionscientistsexploresocialbigdataasawaytoconduct"fieldresearch"andto
testhypotheses.Crowdsourcing,includingideagenerationandpolling,enablescompaniestoposequestionstothecommunityaboutitsproductsandbrands.Decisionscientists,in
conjunctionwithcommunityfeedback,determinethevalue,validity,feasibilityandfitoftheseideasandeventuallyreportonif/howtheyplantoputtheseideasinaction.For
example,theMyStarbucksIdeaprogramenablesconsumerstoshare,vote,andsubmitideasregardingStarbuck'sproducts,customerexperience,andcommunityinvolvement.
Over100,000ideashavebeencollectedtodate.Starbuckshasan"IdeasinAction"sectiontodiscusswhereideassitinthereviewprocess.
Manyofthetechniquesusedbydecisionscientistsinvolvelisteningtoolsthatperformtextandsentimentanalysis.Byleveragingthesetools,companiescanmeasurespecific
topicsofinterestarounditsproducts,aswellaswhoissayingwhataboutthesetopics.Forexample,beforeanewproductislaunched,marketerscanmeasurehowconsumers
feelaboutprice,theimpactthatdemographicsmayhaveonsentiment,andhowpricesentimentchangesovertime.Managerscanthenadjustpricesbasedonthesetests.
In2009,Whirlpool,thelargestmanufacturerofhomeappliances,wantedtodiscoverwhattheircustomersandconsumersweresayingabouttheirproductsandservicesonsocial
mediaplatforms.5TheyusedAttensity360forcontinuousmonitoringandanalysisofconversationsacrosspopularchannelssuchasFacebook,Twitter,andYoutube,reviewand
bloggersites,andmainstreamnews.Attensity'stextanalyticsfindingswereincorporatedintoWhirlpool'sdecisionmodelstoaccuratelypredictcustomerchurn,loyalty,and
satisfaction.Thisprocessenabledthecompanytolisten,respond,andmeasureonascaleunobtainablebymanualmethods.TheresultsrevealedthatWhirlpoolimprovedits
understandingofitsoverallbusiness.Therewasincreasedsatisfaction,fasterresponsiveness,andoverall,moresatisfiedexperienceswithcustomers.Thecompanyalso
incorporatedcustomerfeedbacktoimproveitsproductdevelopmentandplanningprocess.
WhiletechnologyhashelpedcompaniesscalethelisteningprocessinvolvingsocialBigData,theaccuracyoflisteningtoolsisnowherenearperfect.Manualworkisneededto
"train"thesetechnologiesoncompanyandindustryspecifickeywordswithregardtotextualandsentimentanalysis.Anothergoodpracticeistoinitiallydoparallelmanualand
listeningtoolanalysistounderstandtheaccuracyofthetoolanddeterminewaystoimproveitseffectiveness.
WithrespecttofuturetrendsintheBigDatafield,thefollowingpracticesarestartingtoemerge:
1.Integratingmultiplebigdatastrategies.
WhileacompanycanbeeffectivewithasingleBigDatastrategy,themosteffectivecompaniesleveragingbigdatatodayarecombiningstrategies.Forexample,onefinancial
institutionisleveragingbothSocialAnalytics(nontransactional,socialdata)andPerformanceManagement(businessintelligenceusingtransactionaldata)strategiestoguideits
customerservice.Thebanktraditionallydeterminedits"top"customersbasedonmetricssuchasnumberandbalanceofaccountsthesewerethecustomerswhoreceived
premiumservice.Now,thebankisplanningtoincorporatesocialmetricsintotheequation.Thoseonlinecustomerswhoareveryactivewithrespecttomentioning,engagingwith,
andpromotingthebankonsocialchannelswillalsobeconsideredforhighlevelserviceprograms.Thefinancialinstitutionbelievesthisisamuchmorebalancedwaytosegment

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itsmostinfluentialcustomersforcustomerservice.
2.BuildaBigDatacapability.
WedefineaBigDatacapabilityastheroles,technologies,processes,andcultureneededtosupportbigdatainitiatives.Perhapsthemostcriticalofthesearetheroles,andin
particular,theexpertiseandexperienceneededtodeviseandimplementbigdatastrategies.Asmentionedearlier,multiplerolesareneeded:statisticianswhoareskilledinthe
lateststatisticaltechniquesanalystsanddecisionscientistswhounderstandbusinessmeasurementandexperimentationandwhocanbethebrokerbetweenstatisticiansand
businessmanagerstheITgroupwhoprovidesguidanceonselectingbigdatatechnologies/techniquesandwhointegratesbusinessintelligencetoolswithtransactionalsystems
suchasCRMandWebanalyticaltoolsandbusinessmanagersandknowledgeworkerswhoownthebusinessprocessandhavetobecomfortablewiththenew"language"ofBig
Dataandsocialanalytics.Inaddition,someleadingcompanieshavecreatedspecificgroupstructuresfocusedonbigdataanalytics,andsocialcontentstrategyandintegration.
3.BeproactiveandcreateaBigDatapolicy.
CompaniesneedtokeepupwithpoliciesandguidelinessurroundingtheuseofBigData,especiallywithnontransactional,socialdatathatisoftencreatedandaccessedoutside
companywalls.Leadingcompaniesoftenhavesocialmediapoliciesandcertificateprograms/trainingregardingsocialdatause.BigDatapoliciesshouldalsoaddressissues
regardingcompliance,privacy,andsecurity.Leadingorganizationsclearlycommunicateandarehonestintellingcustomersandconsumershowtheyareusingpersonaldata,such
asdemographicinformationandpastpurchases.Aruleofthumbthatorganizationsshouldfollowistoalwaysthinkaboutthecustomer/consumer/employeeexperienceandtheir
personalbenefitsfrombigdataprojects.BigDataprojectsthatcreateanegativeexperiencewithusers,despitethecompanybenefits,shouldberedesigned.
Withthecostofdatacaptureandacquisitiondecreasingatarapidrate,therealvalueofBigDatawillbeinitsuse.CompaniesthateffectivelycreateandimplementBigData
strategiessuchasthosedescribedabovestandtogainacompetitiveadvantage.Bigdatastrategiesneedtotakeintoaccountbothtransactionalandnontransactionaldata.In
addition,thefocusneedstoextendbeyondusingBigDatatoanswerknownquestions,toexperimentanddiscovertrendsthatcouldhelpmanagersconsiderdecisionsand
opportunitiestheycouldneverhaveimaginedbefore.
References
References
1.Vesset,D.,Morris,H.D.,Little,G.,Borovick,L.,Feldman,S.,Eastwood,M.,Woo,B.,Villars,R.L.,Bozman,J.S.,Olofson,C.W.,Conway,S.,&Yezhkova,N.IDCmarket
analysis:Worldwidebigdatatechnologyandservices,IDC#233485,March2012.
2.Duhigg,C.Howcompanieslearnyoursecrets,TheNewYorkTimes,2/16/2012.
3.Hoffman,D.L.,&Fodor,M.(2010).CanyoumeasuretheROIofyoursocialmediamarketing?,MITSloanManagementReview,52(1),4149.
4.Schaefer,M.W.(2012).Returnoninfluence,McGrawHill,pp56.
5.IDCCustomerSpotlight:Whirlpoolcorporation'sdigitaldetectives:Attensityprovidesthelens,March2011.
AuthorAffiliation
TheAuthors:
SalvatoreParise
SalvatorePariseisanAssociateProfessorintheTechnology,Operations,andInformationManagementDivisionatBabsonCollege.Hisresearchfocusesprimarilyonhow
organizationsareusingsocialtechnologiestoimproveinnovation.
BalaIyer
BalaIyerisaProfessorintheTechnology,Operations,andInformationManagementDivisionatBabsonCollege.Amongothers,hisresearchinterestsincludeexploringtheroleof
ITarchitecturesindeliveringbusinesscapabilities.
DanVesset
DanVessetisProgramVicePresidentofIDC'sBusinessAnalyticsresearch.Hisresearchandconsultingarefocusedonbusinessanalytics,businessintelligence,anddata
warehousingsoftwaremarkets.
CopyrightUniversityofWesternOntarioJul/Aug2012

Indexing(details)
Subject

Knowledgemanagement
Datamining

Location

UnitedStatesUS

Classification

9190:UnitedStates
5200:Communications&informationmanagement

Title

FOURSTRATEGIESTOCAPTUREANDCREATEVALUEFROM
BIGDATA

Author

Parise,SalvatoreIyer,BalaVesset,Dan

Publicationtitle

IveyBusinessJournalOnline

Pages

N_A

Numberofpages

Publicationyear

2012

Publicationdate

Jul/Aug2012

Year

2012

Publisher

UniversityofWesternOntario

Placeofpublication

London

Countryofpublication

Canada

Publicationsubject

BusinessAndEconomics

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Sourcetype

TradeJournals

Languageofpublication

English

Documenttype

Feature

Documentfeature

DiagramsTablesReferences

ProQuestdocumentID

1039465797

DocumentURL

http://search.proquest.com.library.capella.edu/docview/10
39465797?accountid=27965

Copyright

CopyrightUniversityofWesternOntarioJul/Aug2012

Lastupdated

20120914

Database

ABI/INFORMGlobal

Bibliography
Citationstyle:APA6
Parise,S.,Iyer,B.,&Vesset,D.(2012).FOURSTRATEGIESTOCAPTUREANDCREATEVALUEFROMBIGDATA.IveyBusinessJournalOnline,,1.Retrievedfrom
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Copyright2014ProQuestLLC.Allrightsreserved.TermsandConditions

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