“Big Foot”, in the guise of “Big Data”, is amongst us. Unlike the mythical being from the cold reaches of the Alps, its presence is real and growing. The footprint is impressive and is effecting significant, rapid and lasting change in the competitive business landscape. No business sector or profession is immune.
“Big Data” is the utilisation of the cloud software capacity to rapidly retrieve, collate and to enable analysis of information from multiple sources. The concept and processes favour big businesses, which have been quick to embrace and deploy the attractively enveloping concept to their own short and long-term competitive advantage, and to enhance the effectiveness of communications and relationship initiatives.
THE THIRD WAVE
This innovation is the third wave of a noticeable evolutionary trend in business fundamentals.
The first wave occurred in the 1980s, with the “four-on-the floor” entrepreneurs, who espoused and exploited “financial leveraging”. Debt: equity ratios were quickly inflated, tolerance to risk seemed to have no bounds, long-established prudent financial fundamentals were forgotten or marginalised and personal wealth grew rapidly.
However, Newton’s Law of physics remained relevant and in play: “to every action there is an equal and opposite reaction”. On Tuesday, 20 October, 1987, sharemarkets around the world collapsed. So too did corporations and personal fortunes.
During the first decade of the 21st Century, the focus of the second wave centred was on “time-leveraging”.
Communications and technology literally experienced a “Big Bang”. Miniaturisation and mobility pervaded products, services, innovation and creativity. The number of mobile telephones in Australia rapidly exceeded the number of Australians. Some laggards languished, bewildered by a world and generations of clients and consumers who had “moved on”. Personal computers quickly evolved into adolescence, replaced by smaller mobile tablets and smart phones.
And now we have the concept and process of “information leveraging”, a reality made possible by “Big Data”. Information has been transformed into intelligence. Invaluable insights are gleaned on consumers’ perceptions, frames-of-reference, buying patterns and brand preferences. Mass-customisation has become a telling reality.
Collectively, these elements are the currency of the present. You can bank on it!
Unlike the pizza retailer case study, in which a square-shaped pizza was labelled a game-changer (a questionable proposition), “Big Data” is a genuinely gargantuan change in the dynamics of business.
It has the potential to not only change and restructure commerce, but to rapidly make obsolete businesses, products, services and professions.
The provisions of the Privacy Act will be challenged and legally tested.
Buying, marketing and franchise networks which have long relied on periodic distribution of paper-based catalogues and in-store merchandising, promotional and retailing selling campaigns will be marginalised, and in some instances, rendered unviable.
“Big Data” enables businesses to know intimately the buying patterns and preferences of individuals. Communication will be, and is being personalised. For example, salutations will be to “Jill”, “John” – not to “the householder”.
Headlines will confidently state “you have two school-age children and a dog”. The impact, relevance and income generating capacity will be multiples of the traditional generalised, paper based, 12, 16 and 18 page catalogues that pose the question:
“Do you have children and/or pets?”
“If you have children and/or pets”
Fulfilling the consumers’ wants, aspirations and needs for convenience, “Big Data” electronic missives will limit the offers to 2, 5, 10 or possibly 20 products or services that have been previously and consistently purchased by the targeted individuals. Simplified marketing and purchasing!
Small speciality pet shops, as one example, will be vulnerable to the major supermarkets which have access to the buying cycles and data of specific consumers from the information generated from the loyalty cards, rewards programs, company branded credit cards and at the check-outs from multiple sources, including supermarkets, discount department stores, liquor stores, hardware outlets, service stations and insurance brokers.
More particularly, “Big Data” will and does enable those applying the concept and principles to schedule the timing of the distribution of communications to just prior to the habitual visits to specific outlets.
It is a pending threat for the 5,000 plus Australian retail pharmacies which are trending towards online health-management practices and relationships. Aggressive political lobbying by the two major Australian supermarket chains for the rights to operate in-store pharmacies from their collective 2,000 stores is a real threat. Imposing!
Financial planners and finance brokers need to be aware of and alert to the capacity of the major banks to employ “Big Data” to “sweep” invaluable and insightful information and intelligence on their account holders. The largest local bank has a reported 14 million active accounts. Not bad, in a population of just 23 million.
Accountancy, health insurance, travel and hospitality professionals, knowingly or unknowingly, face the same future and challenges.
UPGRADE AND UPDATE PLANS
The transparent inadequacy of many business and action plans has been highlighted with the evolution and progressive application of “Big Data”.
Many supposed “Strategic Plans” have, and will increasingly be found to be, shallow and two-dimensional. Little or no evidence exists that such documents contain and detail scenario plans which could have and should have identified, isolated and analysed such evolving key forces and other likely “Black Swan” events. The time for preparation for many has passed. Action is needed now.
Each and all current plans need to be promptly and extensively reviewed, refined, upgraded and updated. It’s not too late!
However, major and hard decisions will need to be made and implemented, with discipline and precision.
Strategic alliance partnerships are fast developing a new face, with heightened importance.
Smaller, resource-restricted and geographically-bound businesses and practices need to broaden their “footprint” in the marketplace and to extend their networks and communication channels by establishing, nurturing and developing relationships with compatible and complementary operations and entities.
Physiotherapists need to explore the prospects, scope and advantages of exchanging and tapping information with pharmacists, sporting clubs, lifestyle and life-coaches and a host of other important and relevant spheres of influence.
For many, the selling of information retrieved from “Big Data” is morally, ethically and legally taboo. However, effective personal introduction is another thing and one which is efficient and effective. A win-win-win situation.
The nature and extent of these potential, mutually beneficial networks are only limited by one’s imagination, creativity and drive.
Many mining companies operate in remote, inhospitable and dangerous locations and environments.
Often the costs are high, staff morale is difficult to maintain and safety can be compromised.
“Fly-in, Fly-out” policies and practices do not address or redress the complex underlying operational fundamentals.
“Meta-Data” is an adaptation of “Big Data”. Input is derived from multiple sources, including geologists, surveyors and spatial scientists. It is then retained, collated, analysed and applied, using “cloud” technology and capabilities.
The enhancements in operations, margins, profits, overheads, efficiency and effectiveness are impressive. Productivity is optimised.
For example, Rio Tinto has an operations centre in an attractive, convenient and appealing complex located at the Perth Airport in Western Australia. The mega-sized “dump” trucks in the iron-ore mines in the isolated Pilbara region some 2,000 kilometres to the north do not require on-site drivers. They are “driven” and controlled remotely from the Perth Airport site utilising Meta-Data.
And, how interesting. Cost of operations and ttyres (which can be worth over $10,000 each) are some 20% lower than normal manned vehicles. Technology and Meta-Data are less taxing than human resources.
The same principles can be and arguably should be, applied to the trains which transport the ore to ports.
Moreover, the operations of some underground mines in South Africa which are extracting resources and commodities from depths of up to 4 kilometres are keen to introduce Meta-Data-dependent technology, which removes the need to expose miners to the rigours and dangers of such sites and depths.
The potential social, political, educational and employment consequences are enormous. The “cooling-off” of the mining investment cycle is only one minor issue that needs to be addressed.
“Meta-Data”, like “Big Data” is a genuine game-changer. It is a future that has arrived. Politicians, governments, union officials, workers, investors and educators cannot ignore or deny the reality and possible manifestations.
Now is the time to reflect, to contemplate and to act. Tapping into one’s own pool of “Big Data” would be a good start.
Barry Urquhart, Managing Director of Marketing Focus, is a business strategist, consumer behaviour analysts, marketing consultant, author and international conference keynote speaker.