The Myth Of Big Data

Stu Laura: Ask me how I know that "big data" is a myth? Go ahead, ask me.

Howard Anderson: Consider yourself asked.

Laura: McKinsey has just written a 143-page report, "Big Data: The Next Frontier." Oracle has a long white paper on the subject. So does IBM. These people are going to strain something jumping on a moving bandwagon. And you! Didn't you write a column for InformationWeek, "Analytics Will Take Over Your Company"?

Anderson: Guilty. So what's your problem?

Laura: Don't you realize this is HARD? The basic reason is that we in IT are tasked with driving transaction costs down. Now that logistics and marketing and everyone else wants big data, they want more of everything--more storage, more software, more databases, more processors. Who's going to pay for all of this? Me? My budget is squeezed tighter than a clam. I've outsourced, rightsourced, and downsourced.

Anderson: We've been through this before. You're really good at sucking up money from the operating divisions--go plead your case!

Laura: What case? Everyone has the same idea: "Build it and I will come." But you tell me how to get HR, logistics, marketing, and finance on the same page. It's kind of like pornography--everyone knows it when they see it, but no one can point to what this will mean ... so they're suggesting to me that my group bite the bullet. I have been through this a few times.

Anderson: Do what you always do: Find a few of your competitors that have used big data to build a case and scare your management.

Laura: That used to work, but now everyone is being very closed mouthed about what they're doing. The hype machine is breaking down. We're back to talking about "the strategic value of information," and we can't do any more than quote the same apocryphal tales. And you! You talked in your column about a Chief Analytics Officer. Do you know what problems you're creating?

Anderson: It seemed like a good idea at the time.

Laura: Let's just take the relationship we have with marketing inside our company. Those clowns just know how to spend money. So they're playing all sorts of "what if" games. What if we looked at our customers and figured out which sub-segment was about to switch from us to another vendor? What if we knew about the customers of our customers? Every time these clowns ask another "what if" question, it costs me $500,000. If you don't know where you're going, any road will take you there!

Anderson: Calm down, big fella! Surely you're exaggerating!

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Laura: Let me tell you what's going to happen. We're going to have a feeding frenzy. Every group is going to get into the act, and we'll buy two of everything. Then we'll have three years of chaos and people tripping over one another. Then we'll try centralization. That won't work. Then we'll try decentralization. That won't work either.

Then we'll try task forces and get mixed results. Then they will decide it belongs in my shop and allocate about three extra dollars. That won't work. Then we'll outsource the analytical function, but we'll be reluctant to turn this over to anyone. Then a few people will get fired.

Anderson: And ...

Laura: Then we'll finally have figured out a management system that can take advantage of one of the clearest breakthroughs in 20 years.

Anderson: It sounds like your traditional skepticism is giving way to galloping cynicism. But it sounds like you, in the end, are a believer.

Laura: Of course I am. I may be dumb, but I'm not stupid.

Howard Anderson, founder of Yankee Group and co-founder of Battery Ventures, is currently the William Porter Professor of Entrepreneurship at MIT. He can be reached at [email protected].

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