three big data challenges

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Three 'Big Data' Challenges for the CIOPublished: 24 July 2012

Analyst(s): Stephen Prentice

As information expands and becomes more strategic through the

confluence with other forces within the Nexus of Forces, CIOs face

significant challenges to deliver recognizable contributions toward the

CEO's business objectives.

Additional Perspectives and Updates

Midmarket Context: 'Three "Big Data" Challenges for the CIO' (25 June 2013)

Impacts CEOs are clear about their business priorities, but are less aware of how IT and big data can

help.

Big data marketing hype encourages substantial technology investments, diverting attention

away from the insight gained by finding connections in current data.

The business frequently asks for "better data to make fact-based decisions," but the internal

culture often works in favor of experience over the application of analytical information.

RecommendationsCIOs:

Diagnose exactly how new types of information will lead to measurable progress against theCEO's key priorities.

Ensure current analytical outputs are reliable and trusted before proposing new investments

with unproven returns.

Resist the lure of new technology deployments to handle high-volume datasets until a clear

business demand emerges.


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Prioritize opportunities to derive new insight from the combination of existing data sources

rather than looking to capture and analyze huge datasets.

Diagnose the weaknesses in current decision-making processes, and invest the time to gain a

foothold in the "process ecosystem."

Businesses are built on a complex web of relationships and trust. Craft analytical solutions that

fit the social realities of the organization.

AnalysisIn the digitally enabled world, information is playing an increasingly central and critical role in driving

business success and competitive advantage. There is more data and a greater variety of data,

arriving with increased velocity (a combination captured by the popular term "big data"). The

challenges of big data are compounded by the interaction with several other major forces the

growth of social computing, the proliferation of mobile devices and usage, and the emergence ofcloud-based services and business models. Gartner sees the confluence of these forces the

Nexus of Forces as a major influence reshaping the business and technology world over the next

five years, with information being seen as an increasingly strategic business asset.

However, the high-level realization of the strategic nature of information does not, in and of itself,

provide a solution. Results from the Gartner-Forbes 2012 Board of Directors Survey revealed that

50% of respondents see IT as a way to change the rules of competition in their industry. The scope

of big data, combined with a limited understanding among many business leaders of the role that

data can play, creates major challenges for the CIO at this time.

Figure 1. Impacts and Top Recommendations for CIOs in Handling Big Data Challenges

Impacts Top Recommendations

Big data marketing will encourage bigdata centers, big contracts and big bills.

Resist! Don't invest without a clearbusiness demand.

Analyze existing data first.

CEOs are clear about their businesspriorities, but business priorities and bigdata ideas don't magically align.

Diagnose how new types of informationand insight would solve the biggestbusiness issues.

Ensure current analytics are trusted beforeproposing new investments.

Most management cultures still valueexperience above data.

Diagnose today's weak decision-makingprocesses before designing a cure.

Craft analytical solutions that fit the socialrealities of the organization.

Source: Gartner (July 2012)

Page 2 of 8 Gartner, Inc. | G00237003


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CEOs are clear about their business priorities, but are less aware of how IT and bigdata can help

Gartner's 2012 CEO and senior business executive survey reveals that all CEOs can clearly

articulate their current strategic business priorities, with growth and profitability at the top of the list

(growth responses were "increasing enterprise growth" and "expanding into new markets or

geographies," while profitability responses were "increasing profitability," "implementing financial

controls" and "reducing costs"). However, when asked, "What new type of information do you think

will be most disruptive to your industry in the next five years?" only 60% of respondents were able

to answer, and there was very little consistency in their responses. CEOs are clearly focused on

their goals, but suffer from a lack of clarity about how information, especially the new forms of

information arising from the Nexus of Forces, and analytics can help them achieve these goals (see

"CEO Survey 2012: The One Piece of Information the CEO Needs").

Recommendations

CIOs must diagnose exactly how new types of information will lead to measurable progress

against the CEO's key priorities.

The emergence of big data is threatening to overwhelm the traditional disciplines of information

management, requiring a new strategic response from the CIO. However, the CIO must tread

cautiously and focus on the intended result. The only reason for pursuing a big data initiative (or any

IT- or business-related initiative for that matter) is to deliver against a business objective. CEOs are

clear about their business objectives, but are less certain about how information can help. CIOs

must, therefore, learn how to demonstrate the relationship between information management and

business outcomes, and learn to diagnose the underlying problem, rather than supply a superficial

solution.

Such diagnostic questioning of business leaders must be guided by an understanding of the

strategic direction of the business and the underlying costs and value of information. This is no

trivial task and will require tact, diplomacy, and an objective and investigative mind-set (see

"Prepare to Be an Information Leader"). As information becomes more strategic, it becomes a

valuable asset, which, like all other assets, must be valued and accounted for, such that business

decisions regarding prioritization can more effectively be made (see "Introducing Infonomics:

Valuing Information as a Corporate Asset"). Information delivers competitive advantage, which in

turns drives revenue growth and profitability.

CIOs should ensure current analytical outputs are reliable and trusted before proposing newinvestments with unproven returns.

Cost control remains a significant priority in the CEO's mind, and IT has a somewhat checkered

history at delivering clear value from historical high-profile IT projects, such as CRM and ERP. To

ensure that the investigative and diagnostic process of discovering how new approaches to

information and analytics can actively contribute to delivering against the CEO's business

objectives, CIOs must ensure that the discussion is not sidetracked into an unproductive and

Gartner, Inc. | G00237003 Page 3 of 8


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negative debate. Being able to clearly demonstrate that existing projects are delivering accurately

against their goals (even if these were not the result of the more detailed diagnostic determination of

requirements now being undertaken) is an important prerequisite to establish a baseline of trust and

reliable performance.

Big data marketing hype encourages substantial technology investments, divertingattention away from the insight gained by finding connections in current data

Despite a long history to the contrary, technology is often seen as a "silver bullet," and high-profile

projects and implementations with far-reaching potential outcomes can be an attractive proposition

to elevate the importance and investment prioritization of the IT function. Big data with all the

complexity and allure of emergent hardware (in-memory computing), architectures (Hadoop

clusters, scale-out storage and server farms) and cloud-based deployments that are allied to the

potential to deliver critical insight from crunching huge datasets ticks all the boxes. This

perception is misplaced and exceedingly dangerous. At the very least, a big data deployment of this

type will require significant infrastructure realignment and significant reskilling, to say nothing of a

multiyear investment and change management program. Vendor marketing will seek to encourage

substantial technology investments, and diverts attention away from the potentially more valuable

focus on linking data from multiple sources to gain insight.

Recommendations

CIOs should resist the lure of new technology deployments to handle high-volume datasets

until a clear business demand emerges.

In a poll carried out at Gartner's U.S. Data Center Conference in December 2011, over 30% of

respondents (data center personnel and managers) reported that, "The business has not requestedsupport for extreme volume, variety or velocity of information (big data)." A further 25% reported

that, "The business has requested support for a big data issue, but the use case is undefined."

While we believe that IT should actively embrace the concept of big data, investments against an

undefined business case, or no business case, are not the way forward (see "Big Data Challenges

for the IT Infrastructure Team"). Remember, the only reason for pursuing a big data initiative is to

deliver against a business objective!

That having been said, the best CIOs are constantly looking ahead, recognizing that it takes time to

implement "big culture" solutions like big data. Still, such an approach requires a high level of

business awareness and strong support from senior business leadership (see "Seizing Competitive

Advantage With Big Culture Technologies"). Those CIOs will look ahead and use techniques suchas scenario planning to force the question, "What will be the rules of competition in three years, and

what information will be needed to maintain competitive advantage at that time?"

CIOs should prioritize opportunities to derive new insight from the combination of existing

data sources rather than looking to capture and analyze huge datasets.

The term "big data" focuses attention unduly on volume, whereas the velocity and, particularly, the

variety of new information can be increasingly valuable and often easier to address. The most



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important elements of big data are the benefits that can accrue to the organization. Information in

existing datasets is frequently complementary, and their effective combination can help fill the gaps

in the information corpus to provide new insights. Combining information assets is often not a trivial

exercise, since the complexity can grow rapidly. However, the business benefits are frequently

higher when addressing the variety of data as opposed to addressing the volume of data. For

example, recent reports revealed that, on the travel site Orbitz, Mac users on average spend 20% to

30% more per night on hotel rooms than their PC counterparts (D. Mattioli, "On Orbitz, Mac Users

Steered to Pricier Hotels,"The Wall Street Journal, 26 June 2012). By changing the prioritization of

recommendations to users on the basis of the platform they were using, Orbitz was able to

capitalize on this behavioral difference (see "Orbitz Worldwide Uses Hadoop to Unlock the Business

Value of 'Big Data'").

It is important to understand that leveraging data does not require exclusive ownership or storing

data in-house indefinitely. It can be far more effective (and less costly) to selectively access and

analyze data stored elsewhere (for example, a Twitter stream). While there is much that is new,

emerging and challenging about the volume aspect of big data, size is not everything. Steady

advances in baseline capabilities mean that what is big this year is manageable next year, and trivial

the year after. The additional elements of big data variety, complexity and velocity should also

be the focus of careful attention when CIOs look to deliver against the CEO's stated business

objectives (see "The Importance of 'Big Data': A Definition").

The business frequently asks for "better data to make fact-based decisions," but theinternal culture often works in favor of experience over the application of analyticalinformation

"Better data to make better (fact-based) decisions" is a long-standing request from the business,

but as the responses to the Gartner 2012 CEO and senior business leader survey indicate, makingthe request and being able to accurately specify the data required (and the format and tempo within

which it is to be supplied) are a world apart. Even when a detailed request is made, the internal

culture often works against the application of analytical information. Lack of trust in the provenance

of the data or the reliability of the analysis, when combined with human concerns over status,

security and a wealth of other factors, can lead to a decision being made without reference to or

recognition of the analytical outputs delivered by IT (see "From Data to Decision: Delivering Value

From 'Big Data'"). Successful delivery of pilot projects to prove the connection between better

analytics and business objectives will help to reinforce the value of analysis over experience.

Recommendations

CIOs should diagnose the weaknesses in current decision-making processes, and invest the

time to gain a foothold in the process ecosystem.

Management decision making is a business process, although the processes are, in most cases,

not formally documented or do not follow any formally documented process in practical operation.

CIOs must become well-versed in their organizations' management decision processes to succeed

(see "Information Innovation Will Revolutionize Management Decision Making"). CIOs must

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understand how (and by whom) decisions are made within the business, what information is used,

and how that information is interpreted and manipulated as part of the process. By understanding

and documenting these processes (especially with regard to the information used), CIOs can foster

a more rational discussion with decision makers about the information and analytical capabilities

needed.

In some cases, CIOs may need to educate their business colleagues regarding statistics and

probabilities to help them better understand what the data actually represents. This may also help

highlight opportunities to apply big data concepts to existing decision-making processes or to

optimize existing processes. At the same time, this will enable CIOs to discover the unwritten

hierarchy of those decision makers, and the relationship between the critical decisions and delivery

against the business priorities of the CEO. Failure to achieve this understanding leaves CIOs without

a detailed understanding of the "process ecosystem" the web of hierarchies and relationships

that will determine whether their inputs add value and/or will be acknowledged or subverted.

Businesses are built on a complex web of relationships and trust. CIOs should craft analytical

solutions that fit the social realities of the organization.

CIOs, IT leaders and many business leaders are often analytical by nature and look for clear

relationships between cause and effect, treating the world (and those individuals operating within

the organizational world and the larger world beyond the organization) as though it were a

deterministic problem to which there are logical and predictable outcomes. Sadly, in the vast

majority of cases, the world does not work like that, due to the intervention of human beings with a

complex mlange of emotional factors, personal preferences, personal relationships, history and a

myriad more. It is tempting to dismiss these "soft factors," since they are difficult to capture, hard to

understand and complex in their interactions. Unfortunately, this approach leads to significant

problems.

Within every organization (and within the extended organization, which encompasses the

organization itself together with suppliers, strategic partners, distribution channels, customers,

influencers and stakeholders), there exists a complex web of relationships based on trust (or

mistrust), favors owed (or granted), leeway, reputation, respect, seniority and so on. These

relationships influence the decision-making process in subtle ways determining who will be

trusted and how much, and who may (or may not) be publicly acknowledged as contributing. Those

who seek to disrupt the "status quo" and force change will face questions over their loyalty, unless

they approach the issue with tact and diplomacy.

CIOs must overcome their reticence (which is justifiably based on the difficulty of understanding the

intricacies of the relationships) and work diligently to earn a high standing within the organizationalecosystem such that they and their teams not only are able to become active contributors toward

CEO business objectives, but also are openly recognized as doing so.

Recommended ReadingSome documents may not be available as part of your current Gartner subscription.



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"Gartner-Forbes 2012 Board of Directors Survey: Stay in Balance"

"CEO Survey 2012: The One Piece of Information the CEO Needs"

"Prepare to Be an Information Leader"

"Introducing Infonomics: Valuing Information as a Corporate Asset"

"Big Data Challenges for the IT Infrastructure Team"

"Seizing Competitive Advantage With Big Culture Technologies"

"Orbitz Worldwide Uses Hadoop to Unlock the Business Value of 'Big Data'"

"The Importance of 'Big Data': A Definition"

"From Data to Decision: Delivering Value From 'Big Data'"

"Information Innovation Will Revolutionize Management Decision Making"

More on This Topic

This is part of an in-depth collection of research. See the collection:

Spotlight on Big Data: Separating Fact From Fiction



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