Oracle Information InDepth

BUSINESS ANALYTICS EDITION

Oracle

Stay Connected:

Oracle on Twitter Oracle on Facebook Oracle on LinkedIn Oracle on Youtube

December 2012

Subscribe

Forward

 

Back to the main page

Big Data, Bright Future: MIT's Andrew McAfee About the Coming Management Revolution

In a recent Webcast as well as an article in the Harvard Business Review (cowritten with Erik Brynjolfsson), MIT's Andrew McAfee argues that big data will dramatically redefine business management as decision-makers embrace the power of evidence-based decision-making that big data makes possible.

The Three V’s: From Traditional Analytics to Big Data
According to McAfee, principal research scientist at MIT’s Center for Digital Business and author of Enterprise 2.0, the sheer volume, velocity, and variety (the three V’s) of data is driving a fundamental change in traditional analytics. These days, some 2.5 exabytes (or a billion gigabytes) of data are created each day. And that number is expected to double approximately every 40 months.

The velocity of data creation is just as important as sheer volume, argues McAfee, since real-time access to information can make one company much more agile than its competitors.

Finally, there is a huge increase in data variety, especially in the age of mobile and social computing. "The data available is often unstructured—not organized in a database—and unwieldy, but there’s a huge amount of signal in the noise, simply waiting to be released," write McAfee and Brynjolfsson.

Outperforming Competitors with Data-Driven Strategies
To measure the benefits among organizations harnessing big data, McAfee helped lead a study that included structured interviews with 330 North American companies, coupled with performance data from annual reports as well as independent sources.

While attitudes toward big data varied widely, the research revealed clear patterns. "The more companies characterized themselves as data-driven, the better they performed on objective measures of financial and operational results," the authors write.

Specifically, companies in the top third of their industry in terms of data-driven decision-making were 6 percent more profitable than their competitors.

Changing the Culture of Decision-Making
While there are major technical challenges in harnessing big data, McAfee and Brynjolfsson argue that the bigger challenges are managerial, beginning with the need to transform role of the senior executive team.

"To be sure, a number of senior executives are genuinely data-driven and willing to override their own intuition when the data doesn’t agree with it," the authors write. "But we believe that throughout the business world today, people rely too much on experience and intuition and not enough on data."

Specifically, McAfee and Brynjolfsson identify five key management challenges that companies must address in order to successful harness big data, including

  • Leadership that embraces data-driven decision-making
  • Technology to handle the volume, velocity, and variety of big data
  • Talent management (particularly the need to cultivate a new generation of data scientists)
  • Effective decision-making, including putting information and the relevant decision rights in the same location
  • Company culture that asks not “What do we think?” but “What do we know?”

Watch the Big Data, Bright Future Webcast replay with Andrew McAfee.

Read the Harvard Business Review article “Big Data: The Management Revolution” by Andrew McAfee and Erik Brynjolfsson.

Back to Top
 
 

Please send questions or comments to newsletter_feedback_us@oracle.com.

This document is provided for information purposes only, and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor is it subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document, and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission.

Copyright © 2012, Oracle and/or its affiliates. All rights reserved.
Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Intel and Intel Xeon are trademarks or registered trademarks of Intel Corporation. All SPARC trademarks are used under license and are trademarks or registered trademarks of SPARC International, Inc. AMD, Opteron, the AMD logo, and the AMD Opteron logo are trademarks or registered trademarks of Advanced Micro Devices. UNIX is a registered trademark of The Open Group.

 
Hardware and Software, Engineered to Work Together

Contact Us | Legal Notices and Terms of Use | Privacy Statement


NSL100131347

Oracle Corporation - Worldwide Headquarters, 500 Oracle Parkway, OPL - E-mail Services, Redwood Shores, CA 94065, United States

Your privacy is important to us. You can login to your account to update your e-mail subscriptions or you can opt-out of all Oracle Marketing e-mails at any time.

Please note that opting-out of Marketing communications does not affect your receipt of important business communications related to your current relationship with Oracle such as Security Updates, Event Registration notices, Account Management and Support/Service communications.