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The article Big Data: The Management Revolution is an article written by Andrew McAfee and Erik Brynjolfsson. McAfee is the cofounder of the Initiative on the Digital Economy in the MIT School of Management, while Brynjolfsson is a professor at MIT Sloan School of Management. In this article, these two gentlemen dig deep into what big data is and how it manages to help managers improve a companys decision making and performance. They use retailing as a great example. We remember book stores to be libraries in which people could walk around and look at options for books. However, as times have changed and internet has grown and has become as prevalent as it has now, the in-person shops have turned into online shops. This allowed book stores to get a bigger and better understanding of each of the customers preferences and in turn allowed them to make algorithms. It could tell them things like what books are the ones that are being sold the most, or which are more popular among teenagers and therefore the algorithm would be able to recommend them books similar to those they were interested in. Its not just what they bought, but book stores would be able to look at what the customers were browsing through. After a while, algorithms would get a more precise knowledge of what customers like every time a customer would respond or ignore a recommendation given by the algorithm. Imagine this happening in real life where a customer would be walking around looking at the books that peaked their interest and there is just an employee following them around writing notes on which were the books they looked at. It wouldve been really awkward, but thanks to the internets evolution and big data, we can definitely avoid that.
Compared to past analytics, big data surpasses anyones expectations. More than ever before, companies can make better predictions which in turn will help them make more precise and beneficial decisions. Areas that were usually solved, or that companies were trying to solve, by gut feeling, can now be solved through the use of big data. Big data has much more space, it is much faster, and has more variety than the analytics from before. If we compare the internet to a few years ago, there is more data running now than ever before. This is why companies must use this to their advantage since big data can offer so much real-time information that they can outdo their competitors. It might sound like its too good to be true, but fathering data isnt that easy. Organizations have to hire qualified scientists that can transfer big data into information that can be useful to business owners. They have to divide the relevant data from the irrelevant data, and that takes hard work.
One of the critical issues mentioned is about Volume, Velocity, and Variety. According to the article, about 2.5 exabytes of data is created every day and that number doubles every 40 months. This means that there is a significant amount more of data now that there was a few years ago. Second, there is the problem of velocity.
Many applications require a lot of speed for data to pass through the internet and into the database. Not to mention that rapid data can provide a competitive head start for companies. Lastly there is variety. These days the internet is built with various forms of data such as messages, images, and videos.
These issues are important because these are key things that analytics would not be able to do pull of as well as big data would. Social networks, such as Facebook and Twitter, have a huge amount of information. Mobile devices, such as smartphones also provide numerous and various data. This data can range from people to activities.
However, knowing all this, how do we know for a fact that it is more efficient to use big data than analytics. I believe that the issue with big data is not whether companies are using it, but rather how they are using it and whether they are reaping the full benefits of it or just trying to adjust to the new norms without knowing what they are doing.
Another one of the issues that are presented in the article is the fear that computers will start doing all the work and humans will stop putting their personal input in decision making. This could easily become the biggest issue of them all since humans have always looked for ways to be more comfortable, whether it be computers doing their job more efficiently or using computers to substitute employees.
The point with this issue is that we can never fully rely on computers to make decisions. The last decision should be made by a humans insight through the information provided by the computer and data.
. Something I thought about when I read the article is the fact that Big Data is very useful. It is something that companies can benefit greatly from. It also makes work very efficient. However, I dont think that we should erase the fact that the human eye can see things that a computer might not. We still havent gotten to the point in which a computer can think and feel like a human being.
Although Big Data offers us a lot of data to be analyzed and then discussed on for better performance and satisfaction from customers, it does not mean that we should stop using our heads. People can still use their human gut, or intuition, when making decisions, but also take into consideration what the computer offers. As the article says, Big datas power does not erase the need for vision or human insight.
It goes without saying, but if a company doesnt adapt to new changes, they will not reap the benefits that big data has to offer them. Personally, I know a few owners of companies that still in this time of pandemic refuse to digitalize themselves just because their digital knowledge is limited and they are scared of the unknown. Theyd rather keep doing things the old way how the company has been doing it for the last few years, than adapt to the society that we have right now.
Social networks, such as Instagram and Facebook, can provide enough information to a company that can boost their sales. The fact remains that a business that decides to remain without technology will do worse than one who is aided by technology. Now a days, people use technology more than ever whether it be for entertainment purposes or to purchase something. This is a great opportunity for businesses to broaden up their audience.
Decisions made from data are better decisions that those from just intuition. Big data allows for companies to make their decision based on facts and evidence rather than intuition. It is more concrete and therefore more reliable.
Companies like Amazon have a huge advantage since they were born in a time in which the world was becoming digitalized. Those who were around before that time had to go through an evolution and adapt to the new technology. This wouldve cost them money and time in order to learn the new ways. However, Google and Amazon were at an advantage, which is why they became and continue to be so successful. Despite this, they didnt just rely heavily on the computer data. Their decision makers and managers deserve a lot of praise for being able to make decisions with so much data and evidence available to them. The data scientists work hard to make patterns of the big data and translate them into business information that can be useful for decision makers.
One of the best practices a company can implement into their workplace is shown in the article as one of the Five Management Challenges. One of them the companys leadership. It goes without saying that if the company isnt led by someone who has goals that will benefit the company in mind, then the company wont succeed.
Teams have to set clear goals together and define what their success, and the companys success, would look like. Asking the right questions and looking for a solution that is both efficient and affordable is key as well. Just because the computer can do all the work does not mean it should. As said before, leaders and their teams should make sure to analyze every data and option they have before coming to a conclusion. There are things that a human can do that a computer cant, such as spot a great opportunity, think creatively, or share their own vision. At the end of the day, what a computer lacks mostly is feelings and emotions.
Another best practice would be to adapt to the environment around you. As I said before, technology has become the biggest part of our lives. The tools and technology used in order to handle the volume, velocity, and variety of big data have become easily available and affordable throughout the years.
The problem isnt about whether its affordable or not. The problem is whether the company is willing to change the way they have worked in order to match their surroundings. A lot of companies remain stubborn and choose to continue to work with an audience that was around 20 years ago. Generations work in different ways and so should businesses.
Lastly, companies and businesses should invest into data scientists. The technologies used in order to analyze data can be very complicated. Thats why managing these requires a set of specific skills that sometimes most IT departments lack.
The article mentions that will statistics remains important, the courses taught in it do not show you techniques on how to manage big data. Skills like cleaning and organizing large data sets are what is needed. The best data scientists can also speak the language of business which could benefit those who dont know much about technology. Although scarce and expensive, data scientists can benefit greatly. It is more like an investment rather than a cost since it will benefit the company back.
