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Business opportunities: Big Data

July 2013

Businessopportunities:BigData

Contents

1.

Introduction

2.

What is Big Data?

3.

Big Data Adoption

4.

Drivers and Barriers

11

5.

Opportunities for Digital Entrepreneurship

14

5.1. Supply-side Business opportunities

14

5.2. Demand-Side Business opportunities: Functions and Horizontal Business


Processes
17
5.3. Demand-Side Business opportunities: Operations and Vertical Specific
Business Processes
22

Businessopportunities:BigData

1. Introduction
Novel digital technologies (particularly Social, Cloud, Mobile and Big Data) are transforming the
ICT industry and the way companies across all vertical markets can operate. They create new
business opportunities for digital entrepreneurship both on the supply-side (to launch new
services and/or establish new businesses) and on the demand-side (to optimize operations,
reduce costs, improve services and/or launch new services along companies' horizontal business
processes and vertical specific ones).
This report focuses on Big Data. It assesses current adoption, plans of adoption, and drivers and
barriers, and identifies business opportunities that EU companies can leverage by relying on Big
data and advanced analytics..
Focus of the analysis is on the potential for new business value creation, driven by new or higher
revenue, faster go-to-market, enhanced services, reduced costs, increased productivity or
competitiveness. New opportunities are described as well as functional related ones, impacting
R&D, production and operations, sales and marketing, customer support, financial and
administrative functions. Industry specific opportunities are also identified.
While the focus of the report is on raising awareness of the potential opportunities related to novel
digital technologies, it should be stressed that these of course depend on their appropriateness
for specific enterprises, the quality of their actual execution as well as the market and enterprise
context. In short, opportunities always entail risks and barriers, which should be very carefully
considered by enterprise managers, directors and shareholders.
The analysis is part of a series of reports which assess the impact and business opportunities of
other key novel digital technologies: mobile, social media and the cloud.

Businessopportunities:BigData

2. What is Big Data?


Big Data is a term describing the continuous increase in data, and the technologies needed to
collect, store, manage, and analyze it. It is a complex and multidimensional phenomenon,
impacting people, processes and technology.
From a technology point of view, Big Data encompasses hardware and software that integrate,
organize, manage, analyze, and present data which is characterized by "four Vs":
Volume: massive volume of data
Variety: breadth of data sources and formats
Velocity: speed at which information arrives, is analyzed and delivered
Value: referring to both the cost of technology and the value derived from its use
IDC describes Big Data technologies as a new generation of technologies and architectures,
designed to economically extract value from very large volumes of a wide variety of data, by
enabling high-velocity capture, discovery, and/or analysis.
The Big Data technology stack includes:
Infrastructure, such as storage systems, servers, and datacenter networking infrastructure
Data organization and management software
Analytics and discovery software
Decision support and automation software
Services including business consulting, business process outsourcing, IT outsourcing, IT
project-based services, and IT support and training related to Big Data implementations.

Businessopportunities:BigData

3. Big Data Adoption


Big Data technologies are still far from widespread among European organizations, which are in
large part not ready for it from a technical point of view or from a business point of view, as many
of them still don't see significant added value in Big Data investments. Penetration of Big Data
technologies in Europe lags behind compared with North America, where datasets tend to be
larger and more homogeneous, lacking the complexities generated in Europe by language
differences and variations in regulations across countries.
A recent IDC survey1 revealed that 29% of European companies (excluding very small
organizations) considered themselves ready for Big Data, while over a half stated they were not,
and the rest were undecided on their readiness. The level of awareness and readiness was
significantly higher among very large companies but even in that segment Big Data-ready
companies still remained a minority. The survey confirmed the relative immaturity of the market,
as short-term intentions to increase usage of Big Data technologies were concentrated mainly
among very large companies, and in sectors that were already at the forefront of adoption, such
as large retailers and financial services organizations, while the majority of respondents did not
have any immediate plans for these technologies. In addition, survey respondents affirmed that
they used Big Data to extend or accelerate what they were already doing, rather than to generate
completely new use cases.
In fact, in terms of needs addressed and core functionality, Big Data can be seen as an evolution
of business analytics and data centre technologies which have been in use for over a decade
among larger enterprises, particularly in sectors such as financial services, telecommunications,
and energy. These same enterprises are among those experiencing the most pressing need to go
beyond their existing information management systems and reach a new level of performance by
making full use of the amount of data they hold, as they are hitting the roof of what their current
technologies can deliver. Therefore, although from a technology perspective Big Data comprises
a set of genuinely new technologies (such as Hadoop or advanced data visualization tools) and is
far more than an evolution of existing solutions, its adoption and near-term growth are still driven
primarily by large enterprises, and by a selection of sectors that are more ready than others to
recognize the opportunities that Big Data can open up. Nevertheless, the need to extract more
value from the huge amount of largely unstructured data, which has become available thanks to
new technologies, and to the expansion of social media, is strong across sectors and company
sizes. So, as the market matures, and the benefits of Big Data technologies become increasingly
available as a service, penetration is set to increase also among smaller businesses and in
sectors that have traditionally lagged behind in technology adoption.
While the growing expansion of available data is a recognized trend across countries and market
segments, and the majority of companies are collecting, storing, and to a certain extent analyzing
data, only a minority of companies have started to get valuable insights and real business value
1

Source: IDC European Enterprise Software Survey 2012

Businessopportunities:BigData

from the available data. A recent worldwide survey2 commissioned by Cisco showed that while
60% of respondents agreed that Big Data will help improve decision making and increase their
competitiveness, with even higher scores in BRIC and emerging countries, only 28% of
companies globally reported that they are currently generating strategic value from their data.
IDC's European Vertical Markets Survey 20123 provides a pulse of current end-user attitudes and
future investment plans regarding Big Data technologies. In particular, the survey demonstrates
that very few European companies still believe that the fast expansion of (primarily unstructured)
data will have limited effect on their business, and although the vast majority believes they can
deal with it by expanding their storage capacity, a significant portion of companies believes they
need to re-assess their current information management processes in order to meet the
challenge of data growth. Moreover, larger enterprises are considerably more concerned with the
impact of Big Data, and prepared to overhaul their existing processes, while SMEs expect a more
limited impact, but they are not unaffected. Among vertical markets, the survey allows to identify a
number of sectors in which data explosion is most likely to trigger actions, including telecom,
media, transport and storage, and financial services, but also some manufacturing segments
such as pharmaceuticals and equipment and machinery, while a wait and see approach is more
widespread in most manufacturing sectors, including electronics, food beverage & tobacco, and
other manufacturing segments, particularly those that are characterized by a larger number of
small businesses.
Current adoption of Big Data technologies, according to the same survey, is still relatively low
(6.9% of business sector European companies with more than 10 employees4), and concentrated
in larger enterprises and in verticals such as oil and gas processing, financial services, telecom,
where business analytics and datacenter technologies have been widely adopted in the past
(Figure 1). Some manufacturing sub-sectors such as computer & electronics, and automotive &
aerospace also include a relatively large share of early adopters of Big Data technologies, as
shown in Figure 1, particularly among larger businesses. Conversely, penetration is well below
average in most other vertical markets, and is still very low among SMEs: only 6.2% of
companies with between 10 and 250 employees have already adopted Big Data technologies
(Figure 2), against just over 30% penetration among companies with more than 250 employees.
A gap in adoption between large enterprises and SMEs will continue to exist, nearly half of
SMEs stated they are not likely to adopt, and a significant 15.3% share is undecided but
penetration is set to increase significantly in the SME segment as well over the next two to three
years, reaching over one third of companies with less than 250 employees. Among larger
businesses, penetration of Big Data technologies is deeper, already nearing 31%, and is set for
2

Source: 2012 Cisco Connected World Technology Report, commissioned by Cisco and run among IT professionals
in 18 countries worldwide, including 4 European countries: U.K., France, Germany, and Netherlands
3
Source: IDC estimates based on the IDC European Vertical Markets Survey 2012. Data refer to companies with
10+ employees.
4

Source: Data in survey are weighted by number of enterprises

Businessopportunities:BigData

steady increases over the next few years, as over 70% of companies with over 250 employees
expect to start using them by 2015. Among vertical markets, adoption rates are likely to remain
stronger in the sectors where current adoption is higher financial services, oil and gas
processing, telecom, computers and electronics - while adoption in manufacturing sectors will
increase, but still lag compared with others. Alongside these selected verticals, relatively strong
increases in penetration are also expected in media and transport & storage in the very near term
and over the longer period. Strong increases are expected in the short to medium term in
professional services and equipment and machinery.
As discussed, there is significant variation across vertical markets in current technology
penetration and future adoption plans for Big Data, as well as in the underlying needs for data
analysis to support the business. Key survey results are summarized below by vertical market.
Telecom companies are among the forerunners for Big Data adoption, while media
companies reveal a strong propensity to catch up in the very near term and over the longer
period. Indeed, both sectors are among those where data explosion driven by dataintensive applications such as call data records, network traffic monitoring and digital content
and asset management, is most likely to trigger action in terms of organizational change as
well as increases in storage capacity. In both sectors, an above average share of respondents
are oriented to re-asses their information management processes as a consequence of data
explosion, and very few affirmed that it will have limited or no effect. Moreover, among the
respondents affirming that they can deal with increasing amounts of data by expanding
storage capacity, a good portion already have a Big Data solution in place. Current adoption
of Big Data technologies in telecom neared 40% in October 2012, with close to 40% of
respondents planning to adopt them within the next three years. A similar percentage of
European media companies is expected to invest in big data technologies over the next three
years, with adoption rising from 8% to close to 46%.
The energy sector where the amount of available data increased exponentially in recent
years, for example with the introduction of smart meters and digital seismic sensors, and
where the potential impact of better data usage on business performance is critical is also
among the forerunners in Big Data adoption. Adoption of Big Data technologies appears
particularly widespread in the oil and gas processing sector, reaching 46%, but is also
significantly above average among utilities. Plans for new technology adoption are less strong
than in other verticals, and the percentage of respondents in both energy sectors that stated
they are not likely to adopt Big Data technologies is considerably high. Considering the
relative maturity of the energy sector compared with other verticals, combined to very few
companies that believe they won't be affected by data growth, it is fair to presume that a good
portion of the energy companies that are not planning to adopt Big Data technologies will still
have a strategy related to Big Data, but will leave the data crunching part to other companies
within their group or to external service providers.

Businessopportunities:BigData

Financial services is among the sectors in which data explosion is most likely to trigger
action. The focus in this sector is primarily on data that can be gathered through internal
sources and cross-analyzed in order to produce information for behavioral profiles, risk
assessment, or investment opportunities, while the pressure from the use of social media is
still not very strong in finance. Current adoption of Big Data technologies is above average,
29.6%, and plans for adoption are strong particularly among banks and in the midsize
segment. The share of finance companies that are not likely to adopt Big Data technologies in
the short to medium term is below average but still significant (31.1%), and considering the
relative maturity of this sector we believe that non-adopters of Big Data technologies will still
be users of the information generated through Big Data for them by internal or external service
providers.
Distribution, Hotels and Restaurants companies overall are relatively close to the market
average in terms of adoption and plans for Big Data technologies, and in terms of attitude to
data growth, but there are significant differences between the retail and wholesale sectors and
across company size classes. Retail companies, particularly the very large ones, are more
oriented toward a reassessment of their information management processes, and relatively
few believe they won't be affected by data growth. In contrast, among wholesalers, only a
small minority is prepared to change their information management processes, with the vast
majority appearing unconcerned. Likewise adoption (6.8% overall) is negligible among
wholesalers and retail SMEs, with below average plans in both segments, and highest among
very large retailers. Around 28.8% of companies in the distribution, hotels and restaurants
sector plan to adopt Big Data technologies within the next three years, and this percentage is
significantly higher in companies with 1000 or more employees in this sector. Nearly half of
distribution, hotels and restaurants entrepreneurs are not likely to invest in Big Data
technologies in the short to medium term.
Manufacturing subsectors reveal striking differences among them both in terms of attitude to
data growth and adoption of Big Data technologies. In terms of adoption, the aggregated
sector appears as a laggard, with some 6.2% of current adopters, a further 26.4% planning to
invest, and the majority not likely to invest in the next three years (52%) or unsure about their
plans (14.7%). In reality, most of the key manufacturing sub-sectors, and particularly the SME
portion of them could be classified as laggards for Big Data technologies, for example food
beverage & tobacco, equipment and machinery and selected segments of other
manufacturing and process manufacturing, all revealing low current adoption and to some
extent lower than average plans. But other sectors such as automotive & aerospace or
computers & electronics reveal significantly more interest for Big Data technologies.

Businessopportunities:BigData

Professional services companies overall are close to the market average in terms of attitude
to data growth, though with a lower share of companies believing they won't be impacted, and
are characterized by a higher than average adoption of Big Data technology, with just above
average future plans and a slightly lower than average share of companies having already
written off technology adoption. However, there are large variations across subsectors. IT
services and software companies are much less oriented toward the reassessment of their
information management processes, and a larger share among them plans to deal with data
growth by expanding storage capacity. Penetration of Big Data in this sector is 14.4% against
an average of 6.8% and is set to increase to close to 40% in the next three years. Among
other subsectors, audit and tax, and engineering & architecture are the most oriented toward a
change in their information management processes; current adoption is higher than average
among business consulting and audit & tax services companies and a leap in adoption is
expected in the short term in the legal sector.
Transport and storage companies are among the laggards in current adoption of Big Data
technologies, with only 3.1% of adopters, although the sector is set for a strong jump within
the next two years, as nearly 36.4% of respondents revealed adoption plans. New adopters
will be concentrated among larger transport companies, particularly in the short term, but
midsize companies will follow in the next two or three years, while small businesses will
continue to lag. In terms of needs the sector is also largely polarized. Overall, a large share of
respondents consider the reassessment of their information management processes, and a
similar high percentage would deal with data explosion through additional storage capacity,
while only a small percentage of transport companies believe data growth will have no impact
on them. But while very few SMEs in this sector are prepared to change their organizational
processes due to data growth and the majority are oriented towards an increase in storage
capacity or are unsure of the impact, the vast majority of large transport companies see a
need to reassess their processes.

Businessopportunities:BigData

Figure 1: European Companies' Current and Planned Adoption of Big Data by Vertical, 2012
(Source: IDC on IDC European Vertical Markets Survey 2012)
Q.: Making use of the available data requires new tools and methodologies. To what extent have you adopted or expect to adopt
any of the following methodologies and tools? Big Data technologies e.g. video analytics, social analytics

Oil&Gasprocessing
Finance
Telecom
ComputersandElectronics
IT(softwareandservices)andotherinformationservices
Automotive&Aerospace
Utilities
Mining
Professionalservices
Equipmentandmachinery
Media
Businesssector(10+)
Distribution,HotelsandRestaurants
Processmanufacturing
Othermanufacturing
Food,drinkandtobacco(CPG)
Construction
TransportandStorage
0%
Alreadyadopted

Willstartusingwithin18months

10%

20%

30%

40%

50%

Likelytostartusingwithin23years

60%

70%

80%

Notlikelytoadoptit

90%

100%

Dontknow

Note: Data refer to companies with 10+ employees and are weighted by number of enterprises

Figure 2: European Companies' Current and Planned Adoption of Big Data by Size, 2012
(Source: IDC on IDC European Vertical Markets Survey 2012)
Q.: Making use of the available data requires new tools and methodologies. To what extent have you adopted or expect to adopt
any of the following methodologies and tools? Big Data technologies e.g. video analytics, social analytics

BusinesssectorLEs(250+)

BusinesssectorSMEs(10249)

0%

Alreadyadopted
Likelytostartusingwithin23years
Dontknow

20%

40%

60%

80%

100%

Willstartusingwithin18months
Notlikelytoadoptit

Note: Data refer to companies with 10+ employees and are weighted by number of enterprises

10

Businessopportunities:BigData

4. Drivers and Barriers


The key trigger for the strengthening impact of Big Data on businesses across all sectors, and for
the development of Big Data technologies, is the overwhelming data explosion that we have all
witnessed over the past few years. IBM5 states that we currently create 2.5 quintillion bytes of
data each day, so much that 90% of the data in the world today has been created in the last two
years alone. A large part of this data is made of unstructured and complex content, and from data
sources that did not exist or were in their early introduction stage only a decade ago, from social
media, to digital imaging and video, digital sensors, smart meters, and other nontraditional
networked "smart devices", or from machine-to-machine communication in automated factories.
A large portion of this data is more valuable when actionable information is created and used in
real-time, and data ages quickly in today's interconnected world. New technologies developed
and introduced by IT vendors now provide the tools to collect, store, analyze, and exploit an
increasing share of this amount of available data. Adoption of these technologies is still in early
stages, but the smarter exploitation of data sources can commence even before the
implementation of a complete end-to-end Big Data solution, and information production and
usage can proceed alongside technology adoption, as long as technology adjusts to evolving
business needs.
On the demand side, customers and consumers in particular are increasingly connected and
demanding in terms of the availability and accessibility of readily-usable information, and new
generations are increasingly willing to give up some of their rights to privacy to commercial
entities in exchange for more personalized services. Commercial use of artificial intelligence will
widen as biometric, audio, video, and image recognition software, Big Data analytics, and
commercialized high-performance computing infrastructure will combine to create intelligent
sense-and-respond systems, and intelligent data collection and question and answer systems will
be present across consumer industries, operating within call centers, in retail stores, on the web
and mobile applications, but also in less traditional environments, such as cars and domestic
appliances. Going forward, Big Data analytics technology deployments using real-time monitoring
and analysis techniques will change the way the public views privacy, existing legislation will be
outpaced by technological advances, and a new generation of legislators might find privacy
issues less pressing.
A number of obstacles to the full embracement of Big Data technologies still exist, and will persist
in the near future. First of all, in order to fully embrace Big Data, organizations need to be
dedicated and determined to embrace a more information-led culture. Cultural and
organizational barriers range from a resistance to share personal or proprietary data and
information, to doubts related to the nature of the trend and the technologies involved, as a
minority but still significant share of companies, in Europe in particular, still think that Big Data is
just a new buzzword for old stuff. IDC's recent surveys revealed that over one-quarter of
European respondents were skeptical toward the term "Big Data" and considered it as just a new
5

IBM public marketing material on Big Data

11

Businessopportunities:BigData

name for their current activities. While in some cases this response came from sectors that are
relatively mature in their use of advanced storage and analytics technologies, in other cases it
was a sign of low familiarity with the trend, or of a defensive attitude toward change. Lack of trust
in the data collected and in the results of the analysis can represent a further barrier to Big Data
adoption: some data is inherently uncertain, as it is heavily conditioned by unpredictable natural,
economic, or other forces and wild cards, or because it could be (willingly or accidentally)
manipulated within social media or other human environments.
The first obstacles to overcome therefore relate to the need for companies to understand how
data and information can be used, and to build a compelling business case for Big Data
technology adoption. Lack of budget and lack of time and resources to study the trend and its
potential opportunities and threats are another key barrier, particularly in European countries
where economic and business conditions and outlook remain downbeat. Each use case requires
different combinations of software, hardware, and services to be most effective, therefore,
particularly in the early stages of adoption, the costs related to identifying and implementing an
appropriate solution for a new use case are higher. In addition, in Europe language differences
add to the complexity of the data that needs to be analyzed, and therefore add to the costs of Big
Data implementations, particularly for companies operating across different countries, that are
also impacted by additional complexity due to differences in national regulations regarding data
privacy and data usage.
Additional barriers might come from the industry structure and interrelations among sectors,
in particular between data owners and data users. In a number of possible use cases, the data
needed to improve productivity in a particular industry exists, but it lies in domains where data
usage is heavily regulated or is owned by companies that might be potentially damaged by the
use of their data by other market players. The first case regards the use of any personal or
corporate data of a sensitive nature that would be profitably used in other sectors, for example
health-related data would be in demand by pharmaceutical and personal care manufacturers,
data related to financial transactions and payments would potentially be of interest for targeted
marketing campaigns for retailers, manufacturers, and personal service providers. The second
case is more connected to each industry's structure and to the relationships among partners
along the value chain, the strength of reciprocal trust, and the premium placed on cooperation
versus competition. Detailed information on end-clients collected by retailers would be highly
valuable for manufacturers, particularly in consumer facing sectors and in those where the
distribution channel is largely multi-tiered, but channel partners might feel threatened in their
market position should they give up part of their customer intimacy to their partners. Likewise,
sharing highly detailed information on engineering plans and manufacturing processes surely
increases suppliers' productivity but also enables them to apply what they learnt to the
components they provide to competing manufacturers, or to become a competitor themselves.
However, probably the strongest concerns around Big Data are linked to security and to the lack
of the appropriate skills. Data security is a major concern among European companies across
sectors, as consistently highlighted by IDC's surveys in recent years. Sound security,

12

Businessopportunities:BigData

governance, and risk management processes need to be put in place, as Big Data adds legal,
ethical, and regulatory considerations to data analysis efforts, and introduces new risks when
data is made public or personal data is used, expanding the potential for public missteps which
could bring about fines and permanent damages to the company's image and respectability. The
lack of skills relates both to IT staff able to implement and maintain the appropriate advanced
technologies, and to the insufficient number of analysts able to correctly interpret the data and
generate actionable information for the business creating value. In particular, a key element of
Big Data is the newest technology involved, Hadoop, an open source processing framework that
allows large analytical queries to be broken down to many small queries that can be run in
parallel, and then reassembles the results into one dataset. Hadoop skills are in short supply and
experience of building, implementing and managing Hadoop environments are even rarer,
although the ecosystem is expected to grow very quickly. Currently, the vast majority of Hadoop
projects are pilots and proof of value, and there are very few live production environments in
Europe. In addition to technical skills, IT professionals need to be trained in specialized areas,
and Big Data projects need to span multiple lines of business requiring a strong attitude to
collaboration. Both business and IT people are needed with the special skill set and creativity to
imagine and realize data's full potential, in addition to business analytics strategy and project
management capabilities.

13

Businessopportunities:BigData

5. Opportunities for Digital Entrepreneurship


As the attitude toward open data, or making data publicly available, changes among businesses,
as well as consumers and the public sector, new opportunities for entrepreneurs will open up.
The huge amounts of publicly available data will trigger new needs for data analysis and the
creation of readily-usable information, and will stimulate new business ideas for the deployment
of innovative services and the development of specific applications.
As such, it is possible to categorize opportunities in different areas, both supply and demand side:
On the supply side, opportunities will be linked to the launch of new services and/or the
establishment of new businesses offering Big Data related services/technologies
On the demand side, opportunities will be linked to the value generated in both horizontal and
vertical specific processes of EU companies across all vertical markets.

5.1.

Supply-side Business opportunities

The shortage of IT skills, particularly analytics and Big Data technology skills, and the scarcity of
budget for high-end technology implementations, will create opportunities for service providers
offering cloud and hosted solutions. Opportunities lie ahead for the development and provisioning
of content-enabled applications, case management and related services. Beyond technology,
advanced analytic capabilities are required in order to extract value from data, so more
companies will look to outsource analytic services, and data as a service solutions offered by
analytics service providers will expand rapidly. "Data scientists", combining analytical and
statistical skills with an appropriate level of business understanding, will be in high demand, as
analytic service providers will be required to join an in-depth knowledge of statistical tools and
techniques with the business acumen to apply their findings to the organization, and with the
communication skills to explain the concrete implications of their findings to business executives
in creative and visual ways. Many end-users will want more than just technology or data analysis,
and new consulting opportunities will arise for business analytics architects, particularly for SMBs
and less mature sectors, that typically don't have a business analytics strategy, as companies will
look for advice on what data to track, how to analyze it to respond to specific business issues,
and how to influence action and drive effective change based on the result of the analysis.
The possible use cases of Big Data cover a broad range of functionalities, and in theory each
specific use case could spur a set of new opportunities for digital entrepreneurs willing to offer
services or develop applications in specific niche areas. Although the best known use cases are
related to online media and social networking, early deployments have been strongly focused on
addressing customer-centric objectives, based primarily on available internal data sources, and

14

Businessopportunities:BigData

the potential is much broader and diversified. A recent global study by IBM6, with around onequarter of respondents in Europe, found that only a small percentage of respondents defined Big
Data as mainly social media data, and fewer than half of respondents with Big Data initiatives
reported collecting and analyzing social media data. Instead, most respondents used existing
internal data sources, particularly those related to transactions and interactions with customers, in
their current Big Data efforts. Big Data, through the analysis of data from transactions, multichannel interactions, social media, loyalty cards, and other customer-related information,
provides companies with the ability to obtain a complete picture of their customers' preferences
and demand, and to better understand and predict customer behaviors, and by doing so, improve
the customer experience. Through this deeper understanding, organizations of all types are
finding new ways to engage with existing and potential customers, across sectors such as retail,
telecommunications, banking and finance, and consumer products where end-consumers are
involved, but also in business-to-business interactions among partners and suppliers.
Therefore most of initial supply-side opportunities will be found around market and customers'
analytics. However, as described above, other areas will be interesting going forward. They
include (Figure 3):
Enhanced ecommerce and web market-places. A twofold opportunity; on the supply-side,
these actors can offer Big Data services to companies participating to the marketplace.
Always on the supply-side, new technology companies can offer dedicated services based on
advanced algorithms to web market-places operating in different areas (eCommerce, real
estate, travel, entertainment, etc). On the demand-side, Big Data will facilitate the emergence
and enhancement of existing marketplaces thanks to the personalized and enhanced
offerings.
Analytics software (beyond customer analytics) and related services. Of course the supplyside opportunity will be linked to the Big Data demand/unmet need in different business
processes and vertical markets. An analysis of these opportunities is presented in the
following chapters.
Big Data outsourcing, hosting, and as-a-service offerings, related to different Big Data
opportunity areas. These opportunities will be evident for ICT providers, but also for other
large companies that, by nature, deal with large amount of data, such as already mentioned
web market-places, retailers, banks, etc. These companies can become Big Data analysis
providers to the benefit of the many EU SMEs that cannot afford developing in-house an
advanced analytic strategy.
Big Data consulting. Similarly to the above, Big Data will create opportunities for players
offering consulting services on how to leverage it in the most effective way. Data scientists will
be also in demand at large organizations willing to deploy effective in-house analytic strategy,
thus creating opportunities for new jobs not necessarily just among ICT players.
Remote monitoring services in specific industries.
6

Source: the IBM Big Data @ Work Survey conducted in mid-2012 among 1,144 professionals from 95 countries,
with 23% of respondents in Europe

15

Businessopportunities:BigData

Support enhanced citizen and patients services based on data insights, as the public sector
can largely benefit from the reliance on Big Data.
Moreover, like with any new technology, Big Data opens up opportunity for R&D companies,
public institutions, education institutions and academics to study advances in the core Big
Data solutions and techniques to collect, manage, analyze, visualize, and extract useful
information from large, diverse, distributed and heterogeneous data sets in different vertical
markets.
Figure 3: Supply-side Big Data/Analytics Business Opportunities

E-commerce/webbased market places

Market, customer and


other analytics

- Dedicated access to
advanced analytics for
niche retailers/players
in the marketplace
(which otherwise would
have not the resources
to leverage them)
- Internet display
advertising
- Personalized
services/offers.
- Searchable product
listings from different
vendors/players
including also
consumer generated
reviews
- Real time or nearly
real time pricing.

- Development and
provisioning of analytic
content-enabled
applications, case
management and
related services.
- Development of
horizontal and industry
specific analytics (cloud
based or traditional)
See following chapter
for a top level
description of most
interesting processes to
watch

Big Data outsourcing,


hosting, cloud and/or
consulting
- Consulting
opportunities for
business analytics
architects, particularly
to SMEs and less
mature sectors that
typically don't have a
business analytics
strategy, as many endusers will want more
than just technology or
data analysis.
- Advice on what data
to track, how to analyze
it and how to influence
decisions and drive
effective change based
on the results.
- Cloud and hosted
solutions driven by
shortage of skills and
scarcity of budgets for
high end
implementations

Remote monitoring
services in specific
industries
- Providing new
services to companies
willing to reduce costs
and improve their
services in such vertical
markets as energy,
banking, security,
healthcare, etc
- Monitoring and
analyzing remotely
collected data from
people/patients,
vehicles or
things/sensors
- Analyzing data to
monitor adherence to
pre-set criteria.

Support enhanced
public services
- Leveraging
governments' move to
open data and other
information from
sources such as social
media to design new
services
- Supporting
government in
monitoring initiatives to
understand efficiency of
programs and decide
accordingly.
- Segmenting
population to create
effective services
- Creating new
algorithms to support
decision making and
address specific public
sectors' needs
(including fraud
detection, analysis of
productivity levels of
agencies, etc).

16

Businessopportunities:BigData

5.2. Demand-Side Business opportunities: Functions


and Horizontal Business Processes
Data sources to be leveraged through Big Data technologies are very diverse in type, origin,
format, and content, and even more diverse are the uses that companies and innovative
entrepreneurs can imagine for them. Use cases can be identified along three dimensions: activity,
business process, and industry.
From the activity point of view, examples include:
Information access (e.g., search-based access to information, normalization, and access
across content and data sources)
Analytics (e.g., data mining, multi-dimensional analysis, data visualization)
Operations (e.g., platform for online social networking, gaming, retail transaction processing,
large dataset write backs)
Big Data technologies are being deployed in support of processes, and the challenges and
problems they are called to meet are not Big Data challenges but rather business or
organizational challenges that are impacted by Big Data. Therefore Big Data technology
opportunities can open up around typical horizontal business processes such as:
Customer relationship management (sales, marketing, customer service, etc.)
Supply chain
Operations
Administration (focused on finance and accounting, human resources, legal, etc.)
Research and development
Information technology management
Risk management
As already highlighted above, most of current opportunities focus on customer relationship
management. A recent Skytree survey7, run in January 2013 among nearly 500 companies,
confirms this. The majority of the respondents identified themselves as Data Scientists or BI/ Data
Architects (42%) and indicated Marketing as the business process with the most to gain from
Machine Learning/advanced analytics projects (54%- Figure 4).

Source: Skytree. Big Data Analytics 2013


17

Businessopportunities:BigData

Figure 4: Business Units benefitting from Machine Learning/Advanced Analytics


(Source: SKYTREE Big Data Analytics 2013)
Q.: Which business units (will) benefit from Machine Learning?

Marketing

54%

Operations

48%

IT

44%

Sales

39%

Finance

25%

Other

15%

0%

10%

20%

30%

40%

50%

60%

Note: Multiple responses were allowed on this question

This is not surprising since one of the clearest and fastest ways to see the immediate impact of
Machine Learning is through predictive analytics as found in the survey (Figure 5), which enables
organizations to better profile their customer segments and create more targeted marketing
programs to accelerate growth and sales opportunities. Even though Marketing (54%) stood out
as the biggest benefactor of Advanced Analytics, it was clear that ALL areas of the organization
could benefit from Machine Learning. Operations (49%), Sales (39%), IT (44%), and Finance
(25%) responded favorably to the immediate value and future impact of Machine Learning to their
business needs.

18

Businessopportunities:BigData

Figure 5: Use cases for Machine Learning/Advanced Analytics


(Source: SKYTREE Big Data Analytics 2013)
Q.: What are your use cases of Machine Learning?

PredictiveAnalytics

79%

Optimization

49%

Recommendation

49%

Scoring

42%

TextAnalytics

39%

Fraud/RiskManagement/Security

34%

Other

7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Note: Multiple responses were allowed on this question

Looking into companies' key horizontal processes, it is therefore possible to identify several areas
of business opportunities. They include (but are not limited to):
R&D, Idea generation and PLM (Product Life cycle Management Figure 6)
Production, operations and delivery: smart production, distribution and logistics optimization,
demand and supply chain management, inventory management and optimization (Figure 7)
Sales and marketing: customer micro-segmentation, social & mobile media real-time data
analysis, product cross selling to customers, dynamic price setting, location-based marketing
and sales (Figures 8 A&B)
Customer support: improved customer experience (Figure 8B)
Administration and support: decision-support systems, labor planning optimization, fraud and
fault detection (Figure 9)
Although it is possible to identify opportunities in each business process, one shouldn't think at
Big Data with a silos approach. An effective use of advanced analytics spans across the different
processes, and links R&D, operations, sales and customer services to create real business value.

19

Businessopportunities:BigData

Figure 6: R&D Big Data/Analytics Business Opportunities

Idea generation
(Services industries)
- Advanced analysis of users' needs,
profiles and interests
- Predictive analytics of buying behaviors
- Socialitycs
- Enabling experimentation at the
conceptual stage
- Crowdsourcing

R&D
(Process manufacturing industries)
- Leveraging predictive modeling
- Enhancing clinical trials design and
analysis (pharma)
- Building consistent interoperable, crossfunctional R&D along supply chain to
enable rapid experimentation, simulation,
and co-creation.

PLM
(Discrete manufacturing industries)
- Creating product lifecycle management
(PLM) platforms that can integrate
datasets from multiple systems to enable
effective and consistent collaboration
- Providing a platform for co-creation,
e.g., bringing together internal and
external inputs to create new products
- Enabling experimentation at the
designing stage
- Building interoperable, cross-functional
product design databases to enable
concurrent engineering, simulation, and
co-creation.
- Evaluating product performance based
on "phone home" features to improve
products' features.

Figure 7: Production, Operations and Delivery Big Data/ Analytics Business opportunities

Distribution and Logistic


Optimization
- Optimizing transportation by
using GPS-enabled big data
telematics (i.e., remote
reporting of position, etc.) and
route optimization to improve
fleet and distribution
management or enable a
range of personal safety and
monitoring services
- Transportation analytics
optimizing fuel efficiency,
preventive maintenance,
driver behavior, and vehicle
routing
- Embedding real-time, highly
granular data from networked
sensors in the supply chain
(but also production
processes)
- Smart routing based on realtime traffic information

Smart production
- Applying advanced analytics
to create a digital model of
the entire manufacturing
process
- Implementing lean
manufacturing and digital
factory models' to enhance
process transparency,
develop dashboards, and
visualize bottlenecks
- Implementing sensor datadriven operations analytics to
optimize processes,
maximize yield and/or
improve throughput, and
enable mass customization

Demand and supply


management
-Enabling real-time analysis of
demand and stocks to
enhance flexibility and
responsiveness
- Implementing advanced
demand forecasting and
supply planning across
suppliers
- Integrating data from
different sources including
promotion data (e.g., items,
prices, sales), launch data
(e.g., specific items to be
listed/delisted, ramp-up/rampdown plans), and inventory
data (e.g., stock levels per
warehouse, sales per store)
- Embedding Phone Home
features in products using
sensors that generate and
transmit back data on actual
product usage and
performance

Inventory management
optimization
- Implementing bar code
systems connected to
automated refill processes to
minimize risks of running out
of stock
- Improving stock forecasting
by combining proprietary data
such as sales historicals,
seasonal sales cycles, and
non-proprietary data like
weather forecasts for
example
- Relying on demand signals
analytics, to maximize
revenues and minimize sales
losses due to merchandise
stock-outs

20

Businessopportunities:BigData

Figure 8A: Sales & Marketing and Customer Service Big Data/Analytics Business Opportunities

Customer microsegmentation
- Leveraging analytic tools to
segment the market into
granular micro-segments to
offer personalized services
and increase effectiveness,
efficiency, and satisfaction:
1. Personalized marketing
and campaigns
2. Personalized promotions
and discounts
3. Customized
goods/services
-Predictive analytics and
advanced analysis of buying
behavior at a nearly
"personal" level

Social & mobile media realtime data analysis


- Tracking and leveraging
data on the behavior of
individual customers
including clickstream data
from the Web
- Gauging the real-time
response to marketing
campaigns
- Advanced analysis of peer
sentiment and
recommendations as EU
consumers increasingly rely
on social media to evaluate
purchasing decisions
- Real-time monitoring and
response to Web-based
consumer behavior and
choices.

Product cross-selling

Dynamic pricing

- Enhance cross-selling using


all the data that can be known
about a customer, including
the customers demographics,
purchase history, preferences,
real-time locations, and other
facts to increase the average
purchase size
- Developing and leveraging
customer commercial or
claims records
- Using advanced analytics to
enable design-to-value

- Increasing the level of


granularity of data on pricing
and sales
- Pricing optimization
leveraging demand-elasticity
models based on analysis of
historical sales to derive
insights
- Assessing and informing
pricing decisions in near real
time.
- Integrating promotions and
pricing seamlessly, whether
consumers are online, instore, or browsing a catalog
- Leveraging performancebased pricing plans and risksharing schemes

Figure 8B: Sales & Marketing and Customer Service Big Data/Analytics Business Opportunities

Location-based marketing
and sales
- Leveraging the growing
adoption of smart phones and
other personal location dataenabled mobile devices to
target consumers who are
close to stores or already in
them
- Enhancing the multichannel
experience for consumers to
drive sales, customer
satisfaction, and loyalty
- Geo-targeted mobile
advertising to create value
from the use of personal
location data

Customer service
- Developing product sensor
data analysis for after-sales
service
-Socialitycs to improve the
customer experience
- Sentiment analysis

21

Businessopportunities:BigData

Figure 9: Administration and Support Big Data/Analytics Business Opportunities

Decision support systems


-Using a scientific process of controlled
experimentation that includes the
formulation and validation of specific
hypotheses thanks to advanced
techniques including rule-based systems,
statistical analyses, and machinelearning techniques such as image
analysis or neural networks
- Designing and conducting experiments
and simulation
- Leveraging and analyzing entire
datasets from customers and employees,
or even from sensors embedded in
products

Labor planning and optimization


- Optimizing labor inputs, automating
time and attendance tracking, and
improving labor scheduling to reduce
costs while maintaining service levels
- Predicting staffing need, especially
during peak periods, so to avoid over and
under capacity

Fraud and fault detection


- Leveraging automated systems (e.g.,
machine learning techniques) for fraud
detection, as well as accuracy and
consistency of claims
- Deploying comprehensive and
consistent claims database and trained
algorithms to process and check claims
for accuracy and to identify cases with a
high probability of fraud, defects, or
inaccuracy either retroactively or in realtime

5.3. Demand-Side Business opportunities: Operations


and Vertical Specific Business Processes
In addition to cross-industry processes, specific opportunities will be related to industry-specific
processes, applications, and data sources. Some examples of potential opportunities in each
vertical market are listed below, although the list is far from comprehensive.

Financial services
Algorithmic trading
Fraud prevention and detection in both banking and insurance
Predictive damage assessments in the insurance industry
Claims analytics in insurance
Customer insights from the integration of transactional data (from CRM, credit card payments,
account transactions) and unstructured social media feeds
Portfolio and Risk exposure assessment
Customer profiling, targeting, and optimization of offers for cross-selling
Influencer analysis
Customer center and call center efficiency
Sentiment analysis and brand reputation
Correlation of social media sentiment with stock returns to support investment decisions
Catastrophe modeling in insurance
Customer value management
Underwriting and loss modeling

22

Businessopportunities:BigData

Telecom
Network optimization
Customer retention based on call data records and activity in subscribers' networks
Customer scoring and churn mitigation
Optimization of offers to clients for cross-sell
Customer center and call center efficiency
Fraud prevention
Location based services using GPS data and geospatial analytics
Customer center and call center efficiency
Bandwidth allocation based on use patterns

Media
Customer scoring
Fraud prevention
Churn prevention and customer retention
Intellectual property management
Digital asset management
Digital content management
Audience and marketing optimization
Bandwidth allocation based on access patterns for video, music, and game software streams

Utilities/ Oil & gas


Smart meters monitoring, real-time usage patterns analysis to optimize energy consumption
and pricing
Predictive analytics, distribution load forecasting and scheduling
Sensor monitoring for condition-based and predictive maintenance
Smart grid optimization, weather pattern and real time usage and distribution
Operational modeling
Distribution load forecasting and scheduling
Targeted customer offerings
Disasters and outages management
Compliance checks and audits
Customer feedback and call detail record analysis
Natural resource exploration in the oil and gas industry
Seismic data processing
Drilling surveillance & optimization

Professional services
Demand signaling

23

Businessopportunities:BigData

Social media presence to assess competitive positioning in advertising


Ad targeting, analysis, forecasting and optimization
Social media listening and sentiment analysis for marketing service providers
Campaign management and loyalty programs
Crime prevention and detection for providers of security services
Personalized pricing for travel
IT infrastructure monitoring, predictive maintenance, and management in IT
Security breach pattern detection and machine learning to create rules engine in IT

Transport
Logistics optimization
Location based analytics using GPS data
Customer analytics and loyalty marketing
Predictive maintenance
Capacity and pricing optimization

Retail/wholesale
Store location and layout
Supply chain optimization
RFID tracking
Price optimization and dynamic pricing
Customer behavior analysis from omnichannel retailing and social media feeds
Actionable customer insight, micro-segmentation
Loyalty and promotions analysis
Cross-sell and up-sell at point of sale
Markdown optimization based on actual customer buying patterns
Market basket analysis based on demographics
Merchandise optimization
Fraud detection and prevention
eCommerce fraud detection

Manufacturing
Predictive maintenance
Process and quality analysis
Warranty management
Factory automation
Automatic detection of adverse drug effects in Pharma
Sensor monitoring for the maintenance of automobile, buildings, and machinery
Smart meters monitoring to optimize energy consumption
Location based analytics using GPS data
Analysis of social media comments for vehicle quality management in automotive
24

Businessopportunities:BigData

Social media listening for marketing in consumer industries


Concurrent engineering and product lifecycle management
Design-to-value
Crowdsourcing
Demand forecasting and supply planning
Sensor-data-driven operation analytics
Digital factory for lean manufacturing
Distribution optimization
Quality management based on social media feeds

Public sector
Enhanced citizen/patient services
Weapon systems and counterterrorism
Tax analytics
Fraud detection
Cybersecurity
Surveillance and response programs
Health informatics, bioinformatics and pharmacogenomics
Optical treatment assessment
Clinical decision support systems
It is evident that the deployment of Big Data analytics in these areas will offer strong opportunities
to companies in the different vertical sectors to streamline their processes, reduce costs, increase
efficiencies and provide better and/or new products and services. At the same time, the Big Data
move will create opportunities supply-side for existing or new players offering new products and
services to meet (or create) companies' demand in the areas highlighted above. Specialization
will be key, and entrepreneurs willing to offer new services will need to identify specific decision
processes and groups of information users in order to offer highly valuable insight services to the
most interested target.

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