When State Street Corp. Executive Vice President and CIO Christopher Perretta crafts his IT strategy, he has a legacy to uphold. The Boston-based financial services company has a reputation for being a leader in technology. These days, the cutting edge rests on managing large data sets.
"For us, it is about access to huge amounts of financial data that we can put at our customers' disposal. IT's job is to build the structures that allow them to access it more easily, to augment it and manipulate it much faster than they have in the past," Perretta said.
Warren Ritchie, CIO at Volkswagen Group of America Inc., also has Big Data on the brain. Mining the large data sets generated by the connected car, as today's computerized vehicles are called, is crucial if the automaker is to keep up with its U.S. competitors, he told an audience of CIOs at this spring's Forrester IT Forum. "This is the role IT is trying to get to from a strategy perspective," he said. To that end, he is hiring competitors' specialists who have expertise in connected-car technology.
Whether your company is in a fight for its life or fighting to stay on top, its ability to manage and mine large data sets will be critical to its success, according to numerous technology experts. CIOs such as Ritchie and Perretta know this. More to the point, business leaders know this. The U.S. economic recession accounts for some of the business world's intense interest right now in large pools of digital information.
"A lot of business leaders felt that if they just had a little more access to information, they might have averted a problem with the supply chain or sales, or realized sooner that the just-in-time orders they were busy filling were about to dry up," said Gartner Research analyst Yvonne Genovese, who with colleague Mark A. Beyer, recently published a report on extracting value from Big Data.
Large data sets add up to success in health care, retail sectors
Gartner isn't the only firm out there flogging the connection between analyzing large data sets and business success. The McKinsey Global Institute recently published, "Big data: The next frontier for innovation, competition and productivity," which contains plenty of calculations to back its claim. U.S. health care could use Big Data to drive more than $300 billion in value annually, two-thirds of which would come from reducing national health care spending by about 8%, according to the 120-plus-page report. The total value generated from large data sets, for example, would result from making data more accessible to stakeholders, enabling experimentation and automating business decisions that depend on those data sets, it asserts. The retail sector could increase its operating margin by more than 60% by using Big Data, McKinsey estimates, while the developed European economies could save more than $149 billion in operational efficiencies alone by making use of Big Data.
Business leaders believe there is information locked up that can help them make better decisions … and they are looking to IT to get them there.
Yvonne Genovese, analyst, Gartner Research
The problem is that so far, these payoffs are a long way from materializing. For reasons directly connected to CIOs, fewer than 30% of the world's companies are ready to manage Big Data, according to Gartner. The ability of most existing IT systems and organizations to capture, communicate, aggregate, store and analyze data is no match for Big Data's many dimensions -- starting with volume, the characteristic that has gotten the most attention. Depending on the industry, data sets can range from a few dozen terabytes to multiple petabytes. Throw in the variety of information being collected -- from social media and context-aware mobile information to databases, metering data and video -- as well as the velocity at which data must be processed -- and the probability of not succeeding is high.
In large data sets, good news for the CIO role
With enough forethought, however, CIOs can address these pieces of the problem one by one, as the business case arises, to ward off a fracture, Gartner's Beyer said -- and therein lies the good news: In an era of commoditized IT, CIOs can be heroes.
"This is an opportunity for CIOs to return to the boardroom," Gartner's Genovese said. "Business leaders believe there is information locked up that can help them make better decisions. They want fact-based decision capability, and they are looking to IT to get them there."
State Street's Perretta believes he is pretty well positioned. The push to unlock information at the financial institution is driving the construction of "a whole new set of tools to handle very large data," he said, including private clouds for processing and analytics. His IT organization relies on a chief scientist to keep tabs on the newest technologies and on a seasoned chief architect to identify projects that make sense for the business. And you won't get any argument from him on whose job it is to make data accessible to the whole company -- or as it puts, act as "the linguist" to the digital enterprise.
"Occasionally I look at my business card: It says chief information officer, so I when I was looking around for someone to do this, I figured it must be me," Perretta said.
Let us know what you think about the story; email Linda Tucci, Senior News Writer.