Reflections on winning with data in business.
Two years ago, in an interview called “The Four Ways IT Is Revolutionizing Innovation,” Erik Brynjolfsson, the Schussel Family Professor of Management at the MIT Sloan School of Management, told MIT Sloan Management Review how he saw information technology transforming the way companies do business by, among other things, giving companies “radically improved measurement” capabilities through what he called “nano data.” As Brynjolfsson explained:
That [nano data] includes clickstream data, Google [Inc.] trends, detailed e-mail data, the billions and trillions of bits of information that are thrown off by enterprise planning systems. Even without any conscious effort on the part of the designers, this information is just generated. But by studying these data very carefully, companies can have much better knowledge of their customers, of their business processes, of their product quality and of the defects of their supply chains.1
What Brynjolfsson described is indeed coming to pass. In this issue of MIT Sloan Management Review, we’re featuring a number of articles about how companies can put all that data to use to better manage their businesses. In “What Matters Most in Internet Retailing”, David R. Bell, Jeonghye Choi and Leonard Lodish offer some surprising insights about how to grow online sales — insights gleaned from studying sales data from e-commerce companies. In “Increasing the ROI of Social Media Marketing”, V. Kumar and Rohan Mirchandani explain how Hokey Pokey, an entrepreneurial ice-cream retailer in India, analyzed social media data to develop a more effective approach to social media marketing. Then, in “Innovating With Analytics”, David Kiron, Pamela Kirk Prentice and Renee Boucher Ferguson describe some new survey results that suggest that analytics is helping companies innovate — and is also shifting the power structure within some organizations. In their essay “How ‘Big Data’ Is Different”, Thomas H. Davenport, Paul Barth and Randy Bean explain three important aspects of “big data” and how it differs from traditional analytics. And, lest we get overly enamored with what we can do with data, Ritu Agarwal and Peter Weill make the point that data analytics and optimization will only take companies so far. In their article “