“Big data is a management revolution,” Erik Brynjolfsson, director of MIT’s Center for Digital Business, told the 700 attendees at the Tenth Annual MIT Sloan CIO Symposium on May 22. Brynjolfsson’s statement, presentation and panel discussion with some of academia’s top big data experts highlighted the fundamental change that big data is bringing to the corporate world.
If his rundown of the business advantages of a big data driven organization wasn’t sufficient to convince attendees, his presentation of the results of an extensive study showing big data driven companies are at least 5 percent more productive and achieve higher profits and market value than their competitors encumbered in traditional decision models was. “Data driven decision makers are winning,” he said.
Big data has proved effective in predicting housing sales, creating accurate insurance underwriting strategies and even matching the experts in wine grading, noted Brynjolfsson. After listening to his “TED” like introduction, you were left feeling sympathy for companies not yet on the big data express.
“Big data is a management revolution,” reiterated Brynjolfsson, adding, “Revolutions overturn the existing power structure, and current leaders are last to understand. “
While some companies focus on the technologies underlying big data, the MIT director said the real focus should be on organizing a company to focus on the data revolution and put in place the pieces to capitalize on data. The big data process is built on the pillars of measurement, experiment, analyze and replicate, contends Brynjolfsson. The continuous implementation of that cycle based on real-time data will strand less data-oriented competitors.
His statements were backed up by a panel of experts.
Alex Pentland, professor at the MIT Media Lab, outlined how cell phone data can provide economic information, medical research data and census data far more accurately than traditional— and much slower—data gathering methods. Pentland, who was named by Forbes in 2012 as one of the most powerful data scientists in the world, is working with telecom companies to provide the type of data he described without invading personal privacy.
The privacy issue will disappear, contended Andrew Lo, professor of finance at the MIT Sloan School of Management. He believes that encryption techniques will allow data to be used anonymously but yield accurate results. He also predicted that the finance industry could be in for another round of shakeup before a financial system that incorporates all financial inputs and is reliant on big data is developed.
Beyond marketing and finances, Dimitris Bertslmas, professor of statistics at MIT Sloan, noted that big data is starting to provide methods to successfully treat or at least prolong life in many types of cancers.
Big data is a big buzzword in the technology industry, but it will be the implementation of new corporate structures instead of new technologies that will determine the winners and losers in the big data race.
About Eric Lundquist
Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008 authors this blog for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this blog. All duties are disclaimed. Lundquist works separately for a private investment firm which may at any time invest in companies whose products are discussed in this blog and no disclosure of securities transactions will be made.
