Cultural challenges impact success of Big Data initiatives

BANGALORE, INDIA: The toughest challenge for businesses implementing Big Data initiatives is getting different business units to share information across organizational silos and determining what data to use for different business decisions, according to 'The Emerging Big Returns from Big Data' report.

These two cultural challenges are closely followed by the technological challenge of being able to handle the large volume, velocity and variety of Big Data. Commissioned by IT services provider Tata Consultancy Services (TCS), the research also reveals how the Big Data leaders differ from the laggards and the returns businesses are expecting.

Satya Ramaswamy, VP and global head, Mobility and Next Gen Solutions, TCS, said: "Big Data has enormous potential and early adopters are projecting a high ROI on investments. However, overcoming the technological challenges is only part of the story. Businesses need to carefully think where Big Data initiatives should sit within the organization, how to break down internal silos and look beyond just internal and structured data sets. To realize the full potential of Big Data, businesses also need to consider the potential cultural changes within the organization to speed up its adoption."

Leaders and laggards

Leaders in Big Data differ most from the laggards in three main ways - where they analyze and process Big Data, the mix of data they use and their Big Data spend.

Leaders in Big Data are doing analysis outside of business units (BUs) - Seventy nine per cent of them are using the IT function or a separate Big Data team, with only 21 per cent doing the analysis in BUs. The laggards on the other hand are doing only 68 per cent of their analysis outside of the BUs.

The leaders are also using more unstructured and semi-structured data (55 per cent), and external data (37 per cent), than the laggards who are using 46 per cent unstructured and semi-structured data, and 26 per cent external data.

The most marked difference is that leaders spent $24 million in 2012 and expect to spend $26 million by 2015, whereas the laggards spent $7 million in 2012 and expect to spend $13 million by 2015.

Regardless of whether they're leaders or laggards, nearly half (44 per cent) of Big Data investments are going to business functions on the revenue side: sales, marketing and R&D/new product development. Much less (24 per cent) is going to back-office functions: IT, finance and HR.

The US shows the widest adoption of Big Data initiatives

A regional breakdown shows that the US companies are leading the adoption of Big Data initiatives (68 per cent), followed by Latin America (51 per cent), Europe (45 per cent) and Asia Pacific (39 per cent).

Retailers lead the pack in Big Data

Despite the challenges and disparity in success, many businesses are confident of high ROIs from Big Data. Of those that had programs in 2012, 43 per cent predicted an ROI of more than 25 per cent in 2012. Retail businesses have the greatest number of leaders in Big Data with 35 per cent of respondents expecting ROIs greater than 50 per cent in 2012. They were closely followed by energy and resources (33 per cent), banking and financial services (33 per cent), high tech (27 per cent), and media and entertainment (25 per cent). In last place were consumer goods businesses with just 17 per cent expecting ROIs greater than 50 per cent in 2012.

Aside from the vertical disparity, geographies also differ greatly in their ROI predictions. Asia-Pacific expected the highest ROI (71 per cent), followed by Latin America (64 per cent) and Europe (43 per cent). The lowest expect ROI was in the US (37 per cent).