Competitive Advantage with Data? Maybe … Maybe Not

As companies the likes of IBM move boldly forward toward a new future based on big data, there is another side of the data story to consider.

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IBM chairman, president and CEO Virginia “Ginni” Rometty has been appearing in public a lot lately. In February, she spoke at the annual IBM investor briefing; in March, it was the Council on Foreign Relations — in both cases espousing a bold new future built upon big data.

At the investors’ meeting, Rometty said that big data — defined as data streaming into the world’s organizations from cloud, mobile and social networks (and presumably mingled with enterprise data) — will be the basis of competitive advantage for every company, and indeed every industry, for the next decade. This naturally includes IBM, which will be in a state of “continuous transformation” to pursue this opportunity around data.

At the Council on Foreign Relations, Rometty likened big data to our collective next natural resource. Used effectively, she said, it will result in the 21st-century version of the industrial revolution. Data, in other words, will do for our modern era what steam, oil and electricity did for society in the 1800s: Enable business innovation, create prosperity and ensure growth.

A new era notwithstanding, there is another side to the data story that is worth exploring.

During the Q&A portion of Rometty’s address, Richard Haass, an American diplomat and president of the Council on Foreign Relations, asked Rometty a frank question that addresses the proverbial elephant in the room: “You don’t worry at all that there’s a danger in data?” he said. “I was sitting there listening, and I was thinking of what Wayne Gretzky says about, ‘you don’t skate to where the puck is; you skate to where the puck is going to be.’ Can’t reams of data get in the way? Doesn’t data at some point almost force you inside the box and towards averages?”

Others are addressing this question as well. At the recent O’Reilly Strata Conference, Kate Crawford, principal researcher at Microsoft and a visiting professor at the MIT Media Lab, gave a talk suggesting that big data might not be providing the whole picture. “In fact,” she said, “we may be getting drawn into particular kinds of algorithmic illusions.”

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Topics

Competing With Data & Analytics

How does data inform business processes, offerings, and engagement with customers? This research looks at trends in the use of analytics, the evolution of analytics strategy, optimal team composition, and new opportunities for data-driven innovation.
More in this series

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Comment (1)
Chris
Great and timely piece. Not only can data give a false picture, it can consume an inordinate amount of resources to gather, analyze and regurgitate into a actionable form.

In short, I teach my clients to ask the question: Do you know what the conclusion will be in advance of the data analysis project? If so, spend the resources on corrections.

Chris Reich, TeachU