Three Big Data Challenges

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G00237003

Three 'Big Data' Challenges for the CIO
Published: 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.

Recommendations
CIOs:


Diagnose exactly how new types of information will lead to measurable progress against the
CEO'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.



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.

Analysis
In 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 of
cloud-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

• Diagnose how new types of information
CEOs are clear about their business
priorities, but business priorities and big
data ideas don't magically align.

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

and insight would solve the biggest
business issues.
• Ensure current analytics are trusted before
proposing new investments.

• Resist! Don't invest without a clear
business demand.
• Analyze existing data first.

• Diagnose today's weak decision-making
Most management cultures still value
experience above data.

processes before designing a cure.
• Craft analytical solutions that fit the social
realities of the organization.

Source: Gartner (July 2012)

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

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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, diverting
attention 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 requested
support 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 such
as 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 the
internal culture often works in favor of experience over the application of analytical
information
"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, making
the 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 mélange 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 organizational
ecosystem 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 Reading
Some 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

Gartner, Inc. | G00237003

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