Are you ready? Big data and its concerns for business

Jane Gray reports concerns and considerations about big-data for business from TM’s latest Directors’ Forum meeting.

Big-data will blow out parts of supply chains, boost profitability and bring a new beat to production. But are you ready for it?

This was the vision and challenge laid out by Andy Wright, director of technology acquisition at BAE Systems and special guest at TM’s recent big-data driven dinner debate for members of its Manufacturer Directors’ Forum.

“We are a £6bn business in the UK and 45 per cent of our revenues are now derived from the serviceability of these products – not from production. So how do we gather data from them in the field to ensure we deliver service efficiently – getting the most out of the product and creating value for BAE and the customer?”

MDF

The Manufacturer Directors’ Forum is TM’s networking and knowledge exchange network for senior manufacturing professionals.

Tackling a wide range of topics likely to shape the future of industry, the group encourages manufacturing leaders to prepare their organisations for new trends in competitiveness.

Manufacturers represented at this dinner debate were: BAE Systems, Coty International, Horstam Defence Systems, Industrial Chemicals, Selex ES, Tata Steel.

TM extends its thanks to IBM for sponsoring this event

To find out more about the Manufacturer Directors’ Forum contact Lauren Archer (l.archer@sayonemedia.com) on 0207 401 6033.

But it’s not just BAE that needs to explore the value of big data, Mr Wright showed.

Using a variety of examples including a fishing company, mobile banking in Africa, car servicing and innovations in the personal hygiene and pharmaceutical sector, Wright showed that “Big data-based business models, with technology to gather, store and process that data, are effecting different groups and individuals in very different ways and often come from directions we have not necessarily thought about before.”

Focusing on the example of a Devon-based fishing cooperative which tweets and sells its catch before it reaches shore, Wright said, “What strikes me about this story is that the fishermen have successfully managed to grasp the business case behind the ubiquitous nature of mobile communication to offer a faster, fresher and better service to their customers while cutting out a chunk of the supply chain, cutting costs and making a better profit.”

This point led to a general consensus that a large part of the challenge in mastering big data is not so much in data capture or analytics but in realising the business case that it represents. Wright admitted that, even for a company with the level of influence and resource that BAE has to call upon, the challenge of “understanding what big data is all about” is daunting. For the wider business environment, including government and SMEs, he believes the scope and impact of big-data is massively underestimated.

Yet the big data revolution is on all our doorsteps and gathering itself to start knocking hard, Wright went on to assert. Using supporting evidence from recent PwC research he highlighted that with a predicted 50 billion smart devices to be connected to the internet by 2020 and 90% of today’s data having been created in the last two years “this [big data] revolution is something really immediate.”

Tech torpor v tech torpedoes

Wright’s opening remark’s set the scene for broad ranging debate which lingered on concerns over security and data regulation but also inspired delegates to exchange ideas and experiences about the ways in which their markets could be disrupted by the innovative use of big data.

Even Nick Reeks, director of procurement at Tata Steel – a player in one of the industries which all agreed would be least effected by big data and connectivity – said there was exciting potential for the company to monitor the performance of its steel by using coating materials which can communicate health and degradation information.

“We already guarantee the performance of steel over about 25 years,” he said, before pondering the enhanced service offerings which in-field performance feedback could enable.

But if the technology exists and the business opportunity is exciting, why is Tata not rolling out this connected coating today?

“I think there is an element of fear about the level of investment that would be required,” responded Mr Reeks. “Also, a lot of the guys [in the business] think this is nice to have, or they are constrained by a traditional view of IT revolving around ERP and they say it can’t be done.”

The barrier of legacy IT systems and their accompanying IT culture was agreed by many

Top points from this Big Data MDF dinner

  • Big data will touch all businesses though some will be effected more, and more quickly than others
  • Big data exploitation is as much about realising the business case/model as deploying the technology
  • Security concerns remain a barrier to business exploitation of big data with little clarity over the impact of different legal jurisdictions on the storage and use of data
  • Big data represents both opportunity and vulnerability to SMEs in supply chains. Big companies could do more to help their supply chains prepare for and protect themselves from data criminality associated with big data. (Known data criminality costs the UK in excess of £30bn a year.)

at the table to be a significant burden to manufacturers trying to move forward with their exploitation of big data. But some challenged this position, saying technological lethargy is a symptom lack of support for innovation more than the result of being unable to move away from existing assets.

It was also pointed out that embracing big-data does not mean moving away from those traditional IT assets but rather building on them.

Simon Porter, VP mid-market sales for IBM, shared how car manufacturer Peugeot had realised that “cars produce around 433 megabytes of data per minute,” and sensed that this was important to its competitive future.

“In some ways you might expect Peugeot to be just the kind of company that would want to stick with the way things are. It has a lot of legacy infrastructure, a lot of momentum and a mixture of public-private ownership which you might think would make it tend to support the status quo.

“But Peugeot understood that the amount of data its vehicles were generating was important. The first thing it did was to set up a new division to be responsible for all this data. Step two, which is happening now, is to work out who values that data – who can they sell it to.”

The idea that big data exploitation will need specialist, dedicated talent and resource was expressed strongly around the table with several backing the idea that big data business benefits would be led by a younger generation of employees, not the current C suite. Indeed the need for a generational culture shift before the business potential of big data is realised was almost unanimously agreed, despite recent encouragement for older engineers to have faith in their ability to create disruptive innovations (bit.ly/TechCourage).

Building on the theme of shifts in thinking, dinner guests suggested that big data will force a rethink or inter-organisational boundaries and supply chain relationships in order to optimise the full potential of integrated data.

“More and more, big data is about collaboration,” said Anu Khurmi, business development executive at IBM. “Data in its own right is nothing. Data when you integrate it makes the art of the possible a very different proposition.”