Big Data and Business Intelligence: Debunking the Myths

28Oct15

Chris Kimble & Giannis Milolidakis

Offering unprecedented levels of intelligence con- cerning the habits of consumers and rivals, big data promises to revolutionize the way enterprises are run. And yet, the concept of big data is one of the most poorly understood terms in business today. The implications for big data analytics are not as straightforward as they might seem particularly when it comes to the so-called dark data from social media. Increases in the volume of data, the velocity with which they are generated and captured, and the variety of formats in which they are delivered all must be taken into account. To make the best use of the ever-burgeoning store of knowledge and insight at their fingertips, organizational leaders must confront two commonly held fallacies: that methodological issues no longer matter and that big data offers a complete and unbiased source of information on which to base their decisions. © 2015 Wiley Periodicals, Inc.

  1. Business Intelligence and the Internet

    The impact of big data is undeniable. Newspapers and academic journals are full of anecdotes and case studies that illustrate the value of such data to businesses. For example, McAfee and Brynjolfsson (2012) contrast a physical book shop—which can keep track of which books are sold and, through a loyalty program, can link some of those sales to individual customers—with an online store, such as Amazon. Online stores, can not only track, with almost total accuracy, what was sold to whom and when, but they can also track what else those cus- tomers looked at, how they navigated their way through the website, and how they were influenced by promotions and special offers. Furthermore, they can then use these data to predict what a customer might like to buy next.

    Some, however, argue that the impact of big data is even more far reaching. For instance, McAfee and Brynjolfsson (2012) contend that big data even changes the way that businesses are managed and managers are rewarded. They argue that when data are scarce, highly placed people make decisions based on their intuition: the experience they have built up and the patterns they have internalized over their careers. Big data, they argue, will spell the end for HiPPOs—highest-paid person’s opinions—as executive decisions become truly data driven. Some go further still and say that big data will make entire sectors of human knowledge obsolete. For example, Anderson writes: “Out with every theory of human behavior . . . Who knows why people do what they do? The point is they do it, and we can track and measure it with unprecedented fidelity” (2008).

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