Are You Using Big Data The Right Way?

23

October

2016

5/5 (4)

“Data is the lifeblood of the digital economy, it can give insight, inform decisions and deepen relationships”

The Big Data Movement has gained quite some attention this year as being one of the greater e-commerce trends of 2016. And rightly so, considering firms that employ strategies including big data enjoy an average increase of 60% in business margins. But then why haven’t all firms started incorporating big data practices? Or better yet, why do some firms that employ big data strategies not experience the benefits from it? But let’s start from scratch.

The Big Data market is expected to grow to $187 billion by 2019, an increase of approximately $65 billion in just 5 years. Yet what has caused this increase? The digitization of business activities has enabled firms to record all types of information, that can then be structured to determine what data will be valuable to further analyze and act upon. Although one may associate the popularity of big data to the advancements in our technological environment, its success results from the higher availability of information. The more data there is to be analyzed, the more potential patterns can be identified – ultimately creating cost reduction advantages, better decision-making opportunities and new products and services to meet the consumer’s exact needs.

Yet, despite having employed data management practices, why do some firms fail to experience the aforementioned benefits? Studies have shown that many of these lack a proper business data strategy with the necessary skills and technology needed. Additionally, some firms do have access to large data sets, but do not know how to use this data to gain value from it. They regard big data as a simple business activity, as opposed to making it a part of the company culture – the firms that have effective practices are those that view big data as a valuable resource of the firm in its entirety and not just one of the IT department.

So how should a firm start making the most of its data? It should formulate a data strategy, tailored to meet the company’s goals, that is based on three elements: data, analytical models and tools. Firstly, a company should assemble, integrate and structure its data. Although this may initially be a long process, having all its information together will help advanced analytical models to detect unexpected patterns, potentially creating a competitive advantage for the company. The last essential element is tools – to translate the data outcomes into language that managers and employees can understand. It does not matter if a company has analyzed and found patterns in data – if the resulting model is unclear to employees, they will not act upon it. The data management process has then been practically useless and the firm in its entirety doesn’t benefit from big data.

What are your thoughts on big data? Why do you think some firms aren’t able to fully reap the benefits of the big data movement?

 
References

Gutierrez, D. (2016). What Does the Future Hold for Big Data Analytics?. [online] Inside Big Data. Available at: http://insidebigdata.com/2016/10/22/what-does-the-future-hold-for-big-data-analytics/ [Accessed 21 Oct. 2016].

Li, T. (2016). Session 2: Industry Disruption, online course materials, Semester 1, 2016, Erasmus University.

McAfee, A. and Brynjolfsson, E. (2012). Big Data: The Management Revolution. [online] Harvard Business Review. Available at: https://hbr.org/2012/10/big-data-the-management-revolution [Accessed 21 Oct. 2016].

McKinsey & Company. (2013). Big data: What’s your plan?. [online] Available at: http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/big-data-whats-your-plan [Accessed 21 Oct. 2016].

White, S. (2016). Study reveals that most companies are failing at big data. [online] CIO. Available at: http://www.cio.com/article/3003538/big-data/study-reveals-that-most-companies-are-failing-at-big-data.html [Accessed 21 Oct. 2016].

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Robotic Automation: A Disruptive Technology Affecting Major Industries

26

September

2016

5/5 (10)

Although robotic automation has only advanced in the 20th century, one may be surprised to know that the functionality of automatons had already been explored millenniums ago by the Greek Heron of Alexandria in his work ‘Automata’ and ‘Pneumatica’ (History Computer, 2016). Whilst these automatons were originally used for entertainment and religious purposes, they have further developed to serve the manufacturing environment since 1954, when the first industrial robot Unimate was created that aided in General Motors’ assembly line (ThomasNet, 2016). With robotics becoming increasingly efficient and effective, firms of various industries are finding it more beneficial to utilize these in their operations. As a matter of fact, at least 1.3 million industrial robots will be working in factories by 2018! (World Robotics, 2016) Considering the Slavonik origin of the concept ‘robot’ to be ‘servitude of forced labor’ and the rapid technologically-advancing environment, should one be surprised that some professions may be threatened by this human-imitating automaton? (NPR, 2011)

Robotic automation is currently on the road to disrupting major industries at their core, by changing the composition of the labor force. This disruption is occurring faster than we think, considering a record has been reached in 2015 for most industrial robots sold! According to the International Federation of Robotics, the industries being consistently supplied these industrial robots are the automotive, electronic and metal industry (International Federation of Robotics, 2016).

The Trade-Off
When deciding to employ either a human personnel or industrial robot, a firm has to make a trade-off. A robot is easily trained and maintained, quick and precise, and less likely to be affected by tedious jobs (ThomasNet, 2016; Qureshi and Syed, 2014; MIT Technology Review, 2016). On the other hand, human personnel form the foundation of a firm. Their satisfaction is vital to succeed, despite being the more expensive option. They are able to create solutions for situations that have not previously occurred. For example, creating a marketing or business strategy requires thinking about an original way to ultimately attract consumers, a task a robot is not capable of completing at this point in time (Goldbloom, 2016).

Therefore, I believe an organization should employ both types of labor in the work place to benefit from each’s strengths. If robots are set to complete repetitive tasks, humans are able to complete higher-order jobs such as managing and marketing (Sims, 2016). It is worth noting that human personnel must remain in control, as to avoid potential human, organizational and economical problems (Middleton, 2016; InformationWeek, 2016). For example, the economy would be negatively impacted if a firm would place more resources into the introduction of robotics as opposed to the training of human personnel. Why? Because unemployment would increase and spending would decrease – a contraction of the economic cycle (Qureshi and Syed, 2014).

Recommendation
In order to facilitate this shift in labor composition, one suggests to implement “cultural, educational and training programs” that will help individuals develop and adapt to the new digital society (EU Parliament Magazine, 2015; Qureshi and Syed, 2014). Furthermore, firms should review their hiring process to ensure individuals are compatible with working alongside robots and offer potential financial incentives to those who are (InformationWeek, 2016).

The Future
A researcher from Cambridge University’s Bio-Inspired Robotics Lab predicts that artificial intelligence and robotic automation will blend together to create “embodied intelligence.” Robots will become more sensitive, creative and responsive to humans – after considering this, their forecast that 47% of all US jobs have the potential to be automated is more understandable! (Wired, 2016; Japan-UK Robotics and Artificial Intelligence Seminar, 2016; Middleton, 2016) We are already experiencing robotic automation in the form of manufacturers, ATMs, checkouts, chefs (e.g. Momentum Machine) and hospital helpers (e.g. UCSF Medical Center) – this will only continue to expand to include more skilled jobs such as nurses and school teachers (Middleton, 2016).

The CEO of Fetch Robotics asked… “If I could give you mechanical devices with software that would do all the crappy tasks for you, would you take it?” Jobs exist today that society did not realize would exist decades ago. Despite all the tedious and repetitive tasks that robotic automation will replace, it will also create opportunities and new careers in the future (Dillet, 2016; Sims, 2016). Should one therefore still be worried about the upcoming wave of robotics? What are your thoughts on this?

Bibliography
Dillet, R. (2016). Fetch Robotics CEO Melonee Wise welcomes our new robot overlords. [online] TechCrunch. Available at: https://techcrunch.com/2016/09/13/fetch-robotics-ceo-melonee-wise-welcomes-our-new-robot-overlords/ [Accessed 24 Sep. 2016].
Goldbloom, A. (2016). Transcript of “The jobs we’ll lose to machines — and the ones we won’t”. [online] TED. Available at: https://www.ted.com/talks/anthony_goldbloom_the_jobs_we_ll_lose_to_machines_and_the_ones_we_won_t/transcript?language=en [Accessed 24 Sep. 2016].
History Computer. (2016). Heron of Alexandria. [online] Available at: http://history-computer.com/Dreamers/Heron.html [Accessed 24 Sep. 2016].
InformationWeek. (2016). Robots, AI Won’t Destroy Jobs, Yet. [online] Available at: http://www.informationweek.com/strategic-cio/it-strategy/robots-ai-wont-destroy-jobs-yet/d/d-id/1326056 [Accessed 25 Sep. 2016].
International Federation of Robotics. (2016). Industrial Robot Statistics. [online] Available at: http://www.ifr.org/industrial-robots/statistics/ [Accessed 25 Sep. 2016].
Japan-UK Robotics and Artificial Intelligence Seminar. (2016). 1st ed. [ebook] Embassy of Japan in the UK. Available at: https://www.jetro.go.jp/ext_images/_Events/ldn/summery_report_seminar.pdf [Accessed 24 Sep. 2016].
Middleton, C. (2016). Half of all jobs will be done by robots – Conference Report. [online] Diginomica. Available at: http://diginomica.com/2016/02/22/half-of-all-jobs-will-be-done-by-robots/ [Accessed 24 Sep. 2016].
MIT Technology Review. (2016). A Japanese industrial robot can teach itself to perform a task overnight. [online] Available at: https://www.technologyreview.com/s/601045/this-factory-robot-learns-a-new-job-overnight/ [Accessed 24 Sep. 2016].
NPR. (2011). Science Diction: The Origin Of The Word ‘Robot’. [online] Available at: http://www.npr.org/2011/04/22/135634400/science-diction-the-origin-of-the-word-robot [Accessed 24 Sep. 2016].
Qureshi, M. and Syed, R. (2014). The Impact of Robotics on Employment and Motivation of Employees in the Service Sector, with Special Reference to Health Care. 1st ed. [ebook] Rabigh. Available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4266810/pdf/main.pdf [Accessed 24 Sep. 2016].
Sims, D. (2016). Are Robots Killing Jobs Or Creating Them?. [online] ThomasNet. Available at: http://news.thomasnet.com/imt/2013/02/05/are-robots-killing-jobs-or-creating-them [Accessed 24 Sep. 2016].
The EU Parliament Magazine. (2015). Robotics at the heart of disruptive technology. [online] Available at: https://www.theparliamentmagazine.eu/articles/opinion/robotics-heart-disruptive-technology [Accessed 24 Sep. 2016].
ThomasNet (2016). History of Robotics. [online] Available at: http://www.thomasnet.com/articles/engineering-consulting/robotics-history [Accessed 24 Sep. 2016].
Wired. (2016). Rise of the Machines: The Future has Lots of Robots, Few Jobs for Humans. [online] Available at: https://www.wired.com/brandlab/2015/04/rise-machines-future-lots-robots-jobs-humans/ [Accessed 24 Sep. 2016].
World Robotics. (2016). World Robotics 2014. [online] Available at: http://www.worldrobotics.org/index.php?id=home&news_id=287 [Accessed 24 Sep. 2016].

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Technology of the Week – Disruption of the DVD Rental Industry

16

September

2016

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In order to understand the exact nature of the concept of technological innovation, we focused on the DVD rental industry and selected two specific instances – Netflix and Amazon Prime Video. We then conducted an in-depth analysis using tools such as an industry life cycle analysis, a SWOT analysis and Moore’s process life cycle. Our subsequent findings are summarized in the following text.

Netflix 

Strengths

  • Subscription-based membership
  • Personalized experience

Weaknesses

  • Relies on internet connection
  • Basic membership excludes 4K content

Opportunities

  • New platforms
  • Extension of long-tail

Threats

  • Increasing competition
  • Reliance on licensing companies

Amazon Video

Strengths

  • Offline Viewing
  • Amazon Offerings

Weaknesses

  • Limited Content
  • Maximum of 2 Devices

Opportunities

  • Backward-integration
  • Expansionary Strategy

Threats

  • Piracy
  • Danger of Labelling

With an industry life cycle analysis we could shed some light on the state of the industry, though we had to adapt the traditional model. Essentially, Netflix entered the DVD rental industry and did something nobody else had done yet – next-day home delivery. Then Netflix went online, where first, the online streaming services industry was born and second, Netflix rejuvenated the industry and hooked customers with the introduction of subscription-based pricing. These two revelations put Blockbuster out of business. All of a sudden, instead of walking to the nearest store to pick out a movie and rent it, people had instant access right from the comfort of our own homes – and not to one, but thousands of different movies and TV shows. DVD rental had officially been replaced.

Another useful tool was Moore’s process life cycle, though we adapted it once more. The invention phase was marked by the ability to stream movies and TV shows online. The physical movie rental industry’s days suddenly became numbered. At the innovation phase, a monthly subscription plan was created to oust the antiquated pay-per-movie rental scheme. With the rising success of Netflix, competition picked up as they took heed of the early market signals. To join the race quickly, their only solution was to mirror Netflix’ already-proven business model, and standardization in the form of providers creating their own original content has been the result. Interestingly, our analysis found significant evidence that an ostensibly strange industry development may come to fruition in the not-so-distant future. In fact, a few Cable TV providers have already exhibited this behaviour in the creation of their own Movie/TV streaming platforms.

Building from this, our prediction is that streaming services will become a commodity. Cable producers will create online platforms to stream their original content, rather than sell their licenses to firms such as Netflix and Amazon. Therefore, to continue prospering in the future, the streaming services industry should follow in the footsteps of the travel industry, by offering a more personalized service based on customers’ past behaviour. Furthermore, as suggested by Anderson, we believe that these streaming providers should also focus on producing original content, creating a larger niche market.

References used throughout video

BEARNE, S., 2016. How Technology Changed The Travel Industry [Homepage of The Guardian], [Online]. Available: https://www.theguardian.com/media-network/2016/feb/29/technology-internet-transformed-travel-industry-airbnb [9/15, 2016].

CARR, A., 2010. Blockbuster: A Decade of Decline [Homepage of FastCompany], [Online]. Available: https://www.fastcompany.com/1690654/blockbuster-bankruptcy-decade-decline [9/15, 2016].

ELBERSE, A. Should You Invest in the Long Tail. Harvard Business Review 86, 7/8 (2008), 88-96.

GRANADOS, N., KAUFFMAN, R.J., and KING, B. 2008. How Has Electronic Travel Distribution Been Transformed? A Test of the Theory of Newly-Vulnerable Markets. Journal of Management Information Systems 25(2) 73-96.

HITT, M.A., 2007. Academy of Management Perspectives, 21(2), pp. 83-85.

KAUFFMAN, R.J., LI, T. and VAN HECK, E., 2010. Business Network-Based Value Creation in Electronic Commerce. International Journal of Electronic Commerce, 15(1), pp. 113-144.

PORTER, M.E. 2001. Strategy and the Internet. Harvard Business Review 79(3) 62-79.

TAPSCOTT, D. 2001. Rethinking Strategy in a Networked World. Strategy and Business, 24(1) 1-8.

Team Number: 12

Team Names and Student Numbers:
Sergio Di Giacinto   382073sd

Jake Lagaay 379207jl

Shannon Lofgren 379149sl

Matt Overtveld 379156mo

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