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Data-driven danger

Data-driven business looks like its emerging as the next big buzz phrase. Should you be worried?

Mammoth BIBack in Cape Town after six weeks on the road in the US and Europe, my first task was to step on stage at Mammoth BI and do some myth busting about data-driven business.

Mammoth BI is the brain-child of local entrepreneur, Jason Haddock of Saratoga, a local IT solutions company. The one-day conference was modelled on the TED format of 15-minute entertaining and informative presentations, but focusing on big data, analytics and BI. This inaugural event was a big success, drawing a large audience to the Cape Town International Conference Centre, including a large number of university students, who were offered free attendance as a give-back to the community.

I was presenter number 13 of 17. Amongst 15 presenters extolling the virtues of big data and analytics, describing their successes and techniques, and one great professional comedian (Gareth Woods), my role was to be the old curmudgeon! Or more gently, the reality check against the overwhelming enthusiasm for data-driven solutions to every imaginable problem and data-based silver bullets for every opportunity. Among the many issues I could have chosen, here are the four myths I chose to bust:

  1. Collect all the data to get the best information: Not! Data Lakes epitomize this idea. Anybody who has been involved in data warehousing over the years should know that data is often dirty. Inconsistent, incomplete, simply incorrect. This is like pouring sewage into a lake. You need to be choosy about what you store and apply strict governance procedures.
  2. Decision-making is a fully rational, data-based process: Not! Lovers, advertisers and even executives know this not true. Better and more trusted data can influence the direction of thinking, but many important decisions eventually come down to a mix of information, experience, emotions and intentions. Sometimes called gut-feel or intuition. You need a mix of (wo)man and machine.
  3. Big data can be safely anonymized: Not! The ever increasing set of variables being collected about every man, woman and child is now so large that individuals can always be pinpointed and identified. Privacy is no longer an option. And target marketing can be a nice word for discrimination. Democracy also suffers when all opinions can be charted.
  4. Data-driven processes will solve world hunger: Not! While there are many benefits and opportunities to improve the world through big data and automation, the point that everybody seems to miss is that while the cost of goods drops ever lower by (among other factors) eliminating human labour, these displaced workers no longer have the cash to buy even the cheapest goods. Economists presume that new types of jobs will emerge, as happened in the industrial revolutions; unfortunately, none of them can imagine what those jobs might be.

These four problems are presented in order of increasing impact. Everybody in the data-driven industry needs to consider them carefully. I hope that I’m being too pessimistic, especially in the last two. Please prove me wrong! I’d love to return to the next Mammoth BI, planned for August 2015, with some real answers.

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