Please reply to the discussion below in 250 words.
“Big Data: The Management Revolution” is an article written by Andrew McAfee and Erik Brynjolfsson that emphasizes the role of big data in our modern times and its contribution to company’s decision-making culture. Before, companies used to collect information in written reports and extent files in order to develop algorithms and strategies that could help them understand the market and perform better. Companies not always had enough information to act timely and accordingly with customers’ demand. Today, although the intentions are the same, the tools available to organizations are far more advanced, leading to improved data-collecting techniques. The “Big-Data” era allows these same companies to make better decisions based on evidence-supported predictions, which leads to greater opportunities and competitive advantage. The big data movement makes marketing, advertising, and selling much more effective than it was a decade ago. It enables companies to gather all types of information that (1) are available to them, (2) can help them strategize better, and (3) lead to increasing sales if interpreted and analyzed right. Big data offers many benefits to the companies that decide to embrace it. It allows them to make better estimates of possible outcomes, increasing accuracy of transactions or events, reducing potential restraints that could end up in costly setbacks, and offering better solutions. Big data enables planning marketing strategies to be faster, easier, and more functional than ever before. Because of the enormous streams of data tied to people, activity, and locations, personalized marketing takes place increasing the chances of targeting more people. Of course, more data requires more responsibility. Although it may be perceived as otherwise, having a big pool of information is worthless if there is no human insight. Executives need to learn to effectively organize, analyze, and make sense of these data in a way that leads to better interpretation and greater knowledge. Leaders need to know how to understand the data available to them in order to decide what’s best for the company. Therefore, big data and great leadership are the main two factors that contribute to an organization’s success.
Which are the three most critical issues for this reading? Please explain why? Analyze and discuss in great detail.
1 – Many executives base company’s important decisions in intuition and hunches. In today’s era, technology is not only a luxury but also a necessity. Technology gives us power to gather and collect data that is important for decision making. Experts’ opinions are important; nonetheless, they can be mistaken. On the other hand, data is reliable and unmistakable. Evidence will always overpower intuition. Traditional executives that don’t realize or maybe don’t trust the power of big data will have a disadvantage, and sadly they will not only be limiting their own potential but also hurting the well-being of the corporation. Although it’s true that in prior generations decisions were to be made based on expertise and experience, in today’s world data and information readily available play a bigger role. Unfortunately, executives that fail to realize this will be replaced.
2 – Not every company is data-driven, and that is affecting their business. Although many businesses claim to be using big data to influence their decisions, studies show that not every company use data effectively and some of them don’t even rely on data at all. Sometimes companies (usually small) are reluctant to use data gathering technologies and justify this with its expensive cost. However, these technologies are becoming more and more economical and easier to obtain compared to when it first started. So, why are they not taking advantage of the opportunities that these tools can offer us? There are many reasons behind those decisions such as mindset, company culture, type of leadership, or poor management.
3 – There is a downside to the usage of data. It’s true that executives should place important value on data collected to be able to draw conclusions and make better decisions that benefit the company. However, this shouldn’t prevent executives from using logical reasoning and applying their own knowledge and judgement. That is, executives shouldn’t rely alone on data, but in a combination of information collected and problem-solving skills. Data alone will not make a company successful; leaders with knowledge and skills are essential. The organization’s leadership should be able to analyze and interpret data to effectively exploit its full benefit.
Which are the three most relevant lessons learned for this reading? Please explain why? Analyze and discuss in great detail.
1 – Companies that are data driven usually demonstrate better performance and greater success. Times are evolving, and technology is a big part of the evolution. Companies that decide to evolve and keep up with these changing times are usually the smartest ones. In our today’s world, most of the companies use technology and data to better focus their marketing and selling strategies. Companies who are not willingly ready to take advantage of the benefits these new advanced data-technologies usually fall behind. According to the reading, a research that was conducted by the MIT Center for Digital Business demonstrated that companies that embraced data are on average 5% more productive and 6% more profitable than their competitors.
2 – The use of data leads to better predictions, which in turn leads to better decisions. Just like the example that the article described Amazon, among many other companies, uses data collected from online customers to influence their decisions. If a customer spends a great amount of time looking for an item, the system itself will automatically update the information about the type of items or products the customer is interested in. These are personalized data that the system collects and is unique to every single customer. Based on the data collected, then the system itself will make predictions about what type of items the consumer would like to look at. This big-data strategy will captivate the attention of the customers, present other potential purchases that could satisfy their needs, and therefore lead to increasing sales.
3 – Data offers volume, velocity, and variety. Data not only enables companies to gather a large pool of information that is constantly updated, but it also offers them the possibility to access historical information at any point. Although information is gathered every minute, it never gets erased. This allows companies to design and project strategies based on history, patterns, and previous information that can be used to resolve problems and current situations. Another important characteristic of big data is that it collects information in real time, allowing users to manage and strategize action plans in order to attract more customers, reach a higher client-satisfaction, and beat competitors. The variety of data is eminent. We can accumulate large amounts of digital information in various devices and in different forms. We are able to use smartphones, computers, movement-detection cameras, and GPS devices. The information that we receive from these devices are useful in tracking location, detecting high demand products, ensuring safety, and targeting more potential customers.
Which are the most important best practices for this reading? Please explain why? Analyze and discuss in great detail.
One of the main things to do in order to utilize big data to our fullest advantage would be asking questions. The authors suggest that is important to ask ourselves one important question “What do we know?”. Data is solid evidence, and therefore it should be much more significant than our own’s perception about certain topics. High-performance management will always strive to find a reasonable balance between data-driven decisions and knowledge from experience. Making decisions only based off prior exposure to similar situations is risky. It’s crucial to state facts as we see them provided the data, and not as we think of them.
Another important thing to have in mind is to use technology to our advantage. Big data not only makes the collecting information easier, but it provides tools to help analyze it. Businesses that make good use of big data are the most successful ones. Take Amazon and Google for example. Both of them were born digitally and manage big data successfully. This gives them access to better marketing strategies, giving them a potential advantage over other business, and thus, turning themselves into two of the highest performing companies nowadays.