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L l t K biliti f Bi D tLessons learnt: Key capabilities for Big DataIVI Autumn Summit
September 2013
Your hosts todayYour hosts today
Dr Stefan A. Deutscher Warren Macdonald
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Principal, Berlin
• BCG's representative on the IVI Technical
Project Leader, London
• Operational lead for BCG's IVI offering
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Committee• Part of BCG's contribution to EIM• Global infrastructure topic lead• Topic expert in risk management and data
• Part of BCG's contribution to EIM• Part of the IVI Enterprise Architecture
Management workgroup• Deep experience in IT cost reduction and
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2security sourcing
Big Data is a hot topic with the volume of Big Data searches increasing rapidlyincreasing rapidly
Trends
100 100
Big data80 80
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Digital Economy 60 60
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Cloud computing
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eCommerce20 20
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2005 2007 2009 2011 20130 0
Source: BCG analysis & Google Trends
While others focus on the data itself, we define Big Data by the value and change it drivesvalue and change it drives
Traditional view of 'Big Data' BCG view of 'Big Data'
$400M EBIT opportunity at an international energy co around 'Smart Home' & cross sell based on new data
Data volume
Datavalue
90% of total data in the world was created in the last 2 years
Walmart's hourly transaction data 67xSales up 7-12%, page views 25%when Shopzilla dropped speed of loading website pages from seven seconds to two
Cost of sequencing DNA h
volume Walmart s hourly transaction data 67xthe books in the Library of Congress
Would take 1,000 years towatch all the videos on YouTube
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Cost of sequencing DNA has fallen by a factor of 1,000x as speed has increased by 1,000,000x
Data variety
New forms of content coming online likeGPS data, augmented reality, speech to text QR codes etc
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model change
Smart meters & grid sensors are disrupting the energy industry
Telematics data is reinventing the i th h li d i i
speech to text, QR codes etcPlus infinite varieties of user content, eg.posts, pics, videos, links etc
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Data velocity
car insurance through personalised pricing
Banks & retailers creating new businesses from selling analysis on transaction data to third
Visa has cut processing time to spot credit card fraud from 1 month to 13 minAmazon's 'cloud' holds >260B objects &
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partiesj
handles 200K requests / sec
Source: BCG analysis and case experience
Our clients have seen significant value through investments in Big Datain Big Data
Travel & Tourism Retail GroceryCoffee Chains
Up to 20% EBIT benefit from optimized ticket pricing
$160M of sales through loyalty programme analysis
$70M margin increase from promotional effectiveness
Travel & Tourism Retail GroceryCoffee Chains
analysis
BankingConsumer Goods Retail Insurance
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$120M opportunity from utilizing Big Data analytics to
identify 15 new cross-sell
$100M in persistency and x-sales through embedding
analytics in sales processes
$45M benefit from establishing real-time enterprise information
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yopportunities
analytics in sales processespmanagement function
Insurance
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$30M benefit from new business creation opportunities
$500M opportunity from restructuring the broking role
TelecomsInsuranceBrokerage
$500M benefit through better managing shipping data
Shipping
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2business creation opportunities by leveraging geo-data
restructuring the broking role using data
managing shipping data
Source: BCG case experience
Big Data is relevant today due to the conjunction of changes in costs, capabilities and opportunitiesin costs, capabilities and opportunities
Cost Capability Opportunity
Economics of data analysis h f d t ll h d
New technologiesenable us to analyze data we
Wealth of data availableallows for new industry insightshave fundamentally changed enable us to analyze data we
previously could not, much fasterallows for new industry insights
and customer understanding
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• e.g. Cloud services
Analysis tools• e.g. Hadoop
Internet• e.g. social
media• search history
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Data processing• e.g. MapReduce
(parallel servers)
Mobile connectivity• e.g. smartphones• 4G roll-out
Smart devices• e.g. smart
meters• Telematic boxes
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Outsourcing• e.g.
crowdsourcing
Accelerated data transmission
• e g 100GB
Corporate data
• Telematic boxes
• e.g. loyalty card data
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2crowdsourcing • e.g. 100GB ethernet
card data• telecom data
Source: BCG research
Google: handling really big dataGoogle: handling really big data
Constantly looking for Tries to build trust withConstantly looking for new opportunities to 'Organise all the world's information'
Tries to build trust with attractive corporate
culture and essential set of products
Datausage
world s information of products
A li ti b ilt ff O i ti fill d ith
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single data platform that is designed to be infinitely scalable
Organisation filled with top data engineers
innovating new ways to gather and analyse data
Dataengine
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Builds tight web of ecosystem participants for key products eg.
In spite of its power, always looks to create win-win relationships
Dataecosystem
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y gSearch, Maps, Android with its partners
Source: BCG analysis
P&G: winning insights to fuel innovationP&G: winning insights to fuel innovation
P&G believes Big Data Building a trustedP&G believes Big Data is the single best way to find new innovation opportunities
Building a trusted relationship with
consumers is absolutely core to P&G's strategy
Datausage
opportunities core to P&G s strategy
Pi i B i O i ti d i d
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Sphere platform shares all data worldwide real time for instant insight
Organisation designed around central analytics & governance team with strong links to business
Dataengine
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Works with wide set of ecosystem participants who provide over 50%
Close relationships with partners like Walmart,
Google, Tesco reinforce Data
ecosystem
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2of P&Gs innovationg
capabilities and insight
Source: BCG analysis
Tesco: knowing customers better than they know themselvesTesco: knowing customers better than they know themselves
Early adopter who saw Builds long term trustopportunity to use Big Data to understand customers and reward l l i Cl b d
and loyalty with highly personalised customer
coupons, along with l d d
Datausage
loyalty via Clubcard clear code on data usage
Pl tf i t t ll O i ti l h
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internal transaction data with external data from ONS Experian etc
Organisational approach leverages 'arms length'
analytics combined with internal retail expertise
Dataengine
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Most critical participantis analytics provider Dunnhumby, who they
Builds shared data tools/reports to deepen
relationships with key Data
ecosystem
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y yultimately bought
ypartners like P&G
Source: BCG analysis
Insight from many case studies and BCG experience show there are 6 key success factors required to master Big Datathere are 6 key success factors required to master Big Data
Big Data transformationgOverall vision and objectives
Opportunities Trust
Creatingvalue & change
Buildingtrust
Datausage
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DataBuilding data Developing
Platform Organisation
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systemsp g
capabilities
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Dataecosystem
Decidingwhere to play
Workingday to day
Participation Relationships
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2ecosystemwhere to play day to day
Source: BCG analysis and case experience
Today we will look at TrustToday we will look at Trust
Big Data transformationgOverall vision and objectives
Opportunities Trust
Creatingvalue & change
Buildingtrust
Datausage
Today's focus
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DataBuilding data Developing
Platform Organisation
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capabilities
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Dataecosystem
Decidingwhere to play
Workingday to day
Participation Relationships
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2ecosystemwhere to play day to day
Source: BCG analysis and case experience
Trust is a critical but complex commodity – without it you cannot sustainably exploit Big Data opportunitiesyou cannot sustainably exploit Big Data opportunities
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Source: Davos 2013 Private Session on Value of Personal Data
Consumer anxiety over how data about them is used has grown and is fueled by media attentionhas grown and is fueled by media attention
... and has helped fuel consumers' anxiety
The media has focused on fear, uncertainty and doubt... anxiety
Share of respondents (%)
88%Consider at least one sector a privacy threat
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82%Want independent entity to
control data security
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Think companies' data uses are not transparent enough
• Recently several high profile data breaches • Extensive media coverage of data breaches as
well as missteps by companies
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• EU data protection regulation proposal has fueled coverage
Many companies underestimate the importance of building
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Source: Press searches; BCG analysis; BCG digital identity survey (n = 3,107, August 2012)
y p p gconsumer trust
Example: O2 found new uses of data without consumer trust undermined value creationconsumer trust undermined value creation
… but did not expect storm of harsh O2 launched "Smart Steps"
Telefónica developed Big Data analytics platform in cooperation with GfK
E bl d t di d d t "Harsh criticism on O plans to sell consumer
critics from media and consumerstargeted at retailers …
• Enables consumer understanding and data visualization with near real-time data from Telefónica integrated with consumer preference and behavioural insights from GfK
Harsh criticism on O2 plans to sell consumer location data"
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First product "Smart Steps" launched to provide retailers with consumer insights
• "Smart Steps" anonymises and aggregates bil t k d t t
"Ministry of trade views data brokerage as being illegal"
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and understand what factors influence the number of people visiting a location at any timeH l t il t il l l ff i f i ti
"Consumer protection minister Aigner recommends switching telecom
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stores and determine the best locations and most appropriate formats for new stores
network operator"
"Following feedback from consumers, we have decided not
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Source: BCG analysis
g ,to introduce Smart Step in Germany" Telefónica spokesman
Trusted companies demonstrate 4 characteristics that build confidence with customers, partners & reg.build confidence with customers, partners & reg.
Key characteristics of a trusted data partner Detailsp
• Implement encryption & security technologies to protect data• Use strict internal data governance scheme to control access
Ensure datais accurate and
• Ensure code of conduct & compliance mechanism in place
• Place clear limits on usage to ensure user privacy• Explain to customers how their data is and isn't used
Give users / partners control & confidence
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• Explain to customers how their data is and isn t used• Ensure customers have choices and control
• Communicate how & why data collected, & how customers benefitDemonstrate a
control & confidence on data usage
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y ,• Track and measure consumer trust over time• Take customer concerns seriously, collect only what's needed
H l l t h fid i d t & itD t t t
compelling value exchange
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Co• Help regulators have confidence in data accuracy & security
• Work with regulators to agree appropriate policies & controls• Demonstrate to regulators that benefits to society are self-evident
Demonstrate to regulators that society benefits overall
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Source: BCG analysis
Intuit has created consumer trust through clear internal & external rules
Pro-active internal and external approach … allows value creating uses
internal & external rules
ppto building consumer trust …
gof sensitive data
Intuit trends• Small businesses performance
i t
Principles
against peers• Benchmarks spending and
profitability against industry• Advice on how to improve
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• Individuals compare spending patterns/habits against others
• Uses anonymous, aggregated data to protect privacy
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Small business employment index• Monthly view of employment,
hours, compensation Based on aggregated and
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Customer engagement• Based on aggregated and
anonymous data of 57,000 Online Payroll customers
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2Internal staff guidanceLink to value
Source: http://security.intuit.com/Data_Primer.pdf
Recap: What you need to do to master Big DataRecap: What you need to do to master Big Data
Big Data transformationSet a clear strategic vision and objectives
Opportunities Trust
fData
usage
Build a culture of innovation and experimentation
Establish consumers trust to enable broad use of their data
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Data
Platform OrganisationLeverage standardised, scalable & efficient data
Develop capabilities to capture manage and
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enginescalable & efficient data systems
capture, manage and interpret data
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Dataecosystem
Participation Relationships
Identify partners to work and collaborate to share
Create an open culture to support partnering and
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2ecosystemcommon data sharing
Source: BCG analysis
Thank you
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