How Big Data Will Separate Haves From Have-Nots

When the Internet and the World Wide Web first gained momentum in the 1990s, words such as email and ecommerce entered the popular lexicon. (In fact, a lowercase “e” became a symbol of all things electronic.) The dot-com boom and bust cycle played out in what has since come to be known as Internet time. Entire industries were created and decimated in the span of a decade. Today, it’s hard to imagine either a business or personal life without the Internet and the Web.

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We are now arguably entering a similar historical inflection point with big data, according to former Dun & Bradstreet CIO Walt Hauck. (Hauck left D&B at the end of October, after this interview was conducted.) He should know. For 170 years, data has been D&B’s business, and its CIO controls how the company gains competitive advantage by wielding this asset.

Big Data Will Help You Understand Your Customers

According to Hauck, the companies that “get” big data and use it to better serve their customers will be the “haves.” Those that don’t might as well open a corner bookstore.

“I think big data is the beginning of the ‘haves’ and ‘have-nots’, Hauck says. “You’re either going to be able to take your data, manipulate it and understand it at scale, or you’re going to follow those that do.”

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Hauck isn’t talking about the data that comes from Twitter feeds and Facebook “likes.” That’s interesting and grabs headlines, but the real value in big data is better understanding what you already know:

• Why do your customers do what they do?
• What is it about your products or services that resonates with your customers?
• What do your customers need—and need more of?
• How are you going to use what you know about your customers to do what you do better, attract new clients, open new markets and so on?

“How many times do companies build products that don’t change the market in any fundamental way?” Hauck asks. The promise of big data, he adds, is avoiding such scenarios. It won’t come easily.

“You’re going to get a much tighter feedback loop. Your data is going to double next year and double again in six months after that,” Hauck says. You can ignore that information and just guess, he continues, or you can analyze the data, test a hypothesis and see what works. “In the broader world, we are awash in data but bereft of insight. I think our value prop is around creating more and more insight.”

CRM is the classic example of this, Hauck says. CRM data is all over the place, and sometimes it’s corrupted. The challenge is getting all that information normalized and into a model that gives you a good idea of a customer’s propensity to spend. From there, you have to manage that model against what actually happens and fine-tune it. Being able to look across all your data sets to find these answers is one of the promises that big data technology brings to the table.

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Most people talk about applying big data principles to Internet data, crowdsourcing and sentiment analysis, but Hauck says Dun & Bradstreet gets a lot of value from looking at internal systems in new ways.

“We look through our products to see what people are using. We’re promoting features in products in ways we haven’t before, and we’re taking features out of products based on usage,” he says, adding that this provides value related to upselling, cross-selling and point-of-sale decision-making.

Librarians, Data Scientists and Master Data Management

Before you can obtain these insights, though, you have to roll up your sleeves and finally implement those massive master data management projects that have been sitting on the back burning, waiting for a strong business case.

Big data could just be it. Unfortunately, there’s a dual challenge here. “Good librarianism,” to use Hauck’s lingo, and big data share a lack of critical talent.

“The biggest challenge for me is getting people who are competent in using this stuff at scale,” Hauck says. “Everyone can build a 100-by-100 cube with this stuff. The guys that have done a billion-table join? Not as many. You can try to rent the technical skills, but, unless they understand the context of your business, it just takes a couple of years to build up the chops to use this stuff.”

Fortunately, the barrier to entry is low from a technical and cost standpoint, and companies such as Cloudera are bringing big data technologies in reach for the smallest of businesses. However, you still need the in-house expertise to make sense of the all the numbers. You can put all these numbers from all over the place into a blender and get an answer, but it will be meaningless if you don’t understand the question you’re trying to answer.

“Maybe downstream you need some analytics, [but] at the front it’s really hard to get all your data out of your SAP system [and] into a Hive,” Hauck says. “That doesn’t come for free, and that doesn’t come without expertise.”

Big Data’s Customer Service Imperative

Such problems aside, ignore big data at your peril, Hauck cautions. The companies that “get it,” and understand that it’s about managing expectations as much as information, will benefit.

Think about your own interactions with the companies you work with. If it takes days (instead of seconds) to update your records, or if the customer service representative can’t see a list of service calls and outcomes on her display and react accordingly, you are going to feel like the company is inept, incompetent or, worst of all, doesn’t care about you as a customer.

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Big data will put the expectation of instantaneous feedback and reaction into hyper-drive. Those that embrace this change, and the velocity of it, will be the winners. “Amazon is the exception to the rule today,” Hauck says, but we’re not far from companies being described as “slow” and “dumb” if they aren’t monitoring customers in real time.

“A few years from now, someone’s going to say ‘You didn’t change your application based on what I did a minute ago? Don’t you care about me?'” he suggests. “It’s going to separate the ‘haves’ and the ‘have-nots,’ much like…brick-and-mortar vs. Internet shops. Big data is going to create that kind of divide.”

It appears that most enterprises planning to avoid this fate. Prior to his conversation with CIO.com, Hauck walked out of a meeting of Fortune 500 CIOs. “It’s on everyone’s mind,” he says. “Part of the struggle in today’s business economic environment is [wondering if]can people squirrel away enough resources to take a swing at it?”

Time will tell, of course. You can always swing and miss, as some surely will, just as some unexpected winners will come out of nowhere to claim victory and play spoiler.

Either way, big data is here to stay. It’s more than just a buzzword or a hype-cycle, Hauck concludes—it’s going to separate the customer-centric companies from those that simply act as commodity sellers. “It’s about what you do with [the data], how are you going to do real-time offering, how are you going to do processing, how you stand against your competition. People who can leverage that…are going to win.”

Allen Bernard is a Columbus, Ohio.-based technology journalist. You can reach him via email or follow him on Twitter @allen_bernard1. Follow everything from CIO.com on Twitter @CIOonline, on Facebook, and on Google +.