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Mining Massive Data Sets And Transforming It Into Useful Data

Mining Massive Data Sets And Transforming It Into Useful Data

In anticipation of ProformaTECH 2013 we are introducing you to some of the best presentations from past Proformative Conferences.  If you haven't already, please visit the ProformaTECH conference page and discover the amazing lineup and content we have planned.

In this video, SAP's Eric Fearday talks about turning massive data into useful knowledge. 

The rate at which businesses, organizations, and individuals are creating data is growing at an amazing rate.  With this growth, employees are expecting more and more data and analytics to help with their decision making.  This means that the strategies with which organizations collect and analyze data will be increasingly important. 

Check out the video for expert insight into the topic...

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Full Transcript:

Thank you all for coming. So I listened this morning, ironically, it was the first time I had met Thack,, our CFO of Latin America, and I thought he did a really good job of some very good insights about the role of the financial professional and CFO. Particularly, if that role was going to continue to expand and grow and develop career opportunities and really focus on growth that the role of the CFO professional is going to have to move beyond just the same old lagging in financial indicators that we had been looking at for a long time.

When you look at that, the indicators of the health of the business that we have been trained to look at have not really changed for more than a century. The balance sheet got its current form in 1868, but yet the amount of data that we have at our fingertips that indicates the relative health of the business has changed dramatically. Not only has it changed dramatically, but the manner in which people want to interact with that data as well as the type of individual that wants to interact with that data has changed so dramatically. I think these numbers really help illustrate that story.

When you look at it, Gartner says by 2014 that 50% of your employees will have extremely high expectations in our analytics capabilities in the business. Take that to 2020, and that number jumps to 75% of your employees. What that indicates is that there is a massive shift in the base of decision making that is occurring right in front of our eyes. What that says is that the shift of decision making is going to move beyond just having a few select, key individuals in the executive suites making decisions, but the base of that decision making is going to be pushed out further into the organization as these individuals become more empowered.

Now if you contrast that with where we are at today, most of the polls indicate the employees in your Fortune 500 companies will say 10% of those individuals have access to the information that they need in order to do the job in a really effective way. That may not sound like a big difference, but think about how much work and effort you go through to get information into just the 10%'s hands and if you contrast this with going to 75% and you look at somebody like a PNG, it's like getting information to 13,000 roughly, today, to almost 100,000 people in just a few short years. For Wal-Mart, it is like going from 220,000 employees who need access to information today, to going to 1.5 million in a few years.

That is pretty scary, right? Combine that with the fact that it is pretty generally accepted that the amount of data is increasing at a rate of 80%
every year, and it only seems like that is going up and continuing to go up even more dramatically. What that predates is that you've got this increased base of users, you've got the data increasing and what that creates is this flash point in the middle. When you look at data increasing, that is everything from a multi-million dollar transaction to a Facebook blogger, or a Twitter blogger, or somebody blogging about this event. I was just with the guys with Redbox , you're a $2 billion company,
$1 at a time - that's a lot of dollars.

The amount of data that is being created out there is extremely dramatic. I look at it even in my own personal life, with my dad. I grew up in southern Illinois; my dad has never really used a computer much in his lifetime. For his 75th birthday I gave him an iPad. In the last two months, my dad has created more data than he has in the last 75 years of existence. When you start to think about it in this context, I've got my 3-year-old where she shakes the picture frames. She's like "this thing is not working". So when we look at it from that standpoint, the combination of the user proliferation and the amount of data that is being created creates a tremendous opportunity out in the marketplace.

So we look at that and say "oh, that's great. We have seen this once before in the consumer life when the internet created this massive explosion of content". We were all very hungry to consume that. It took a little while for our expectations, which were set maybe in the late 90's or early 2000's, to catch up to where we are now, where I start to panic right now because I set my phone over there on that table and it is not on my person. The expectations that we have are dramatically different than where they were just a few years ago in our personal life. When you contrast that with where we are at in our business life, the expectations are becoming exponentially higher, yet what the business is delivering and allowing our employees to have access to is still falling way behind.

I use this example all the time: I go to a city, as I mention I travel all the time, I land somewhere and I forget my iPhone charger, what do I do? I don't go to a concierge at the hotel desk anymore, I go to Google Maps, and it says there is a Walgreens down the street, and you can go down there and buy an iPhone charger at 8 o'clock at night. But I'm not happy with that. I want to know what is the fastest way to get there. Maybe I want to price shop to see if there is a better place with a lower cost to get it. I also want to know if there is a restaurant nearby so I can send my team and tell them to come there and meet me.

Contrast that with what I have in my business life; I do work for SAP, so this is a dirty little secret, but I go to one of our facilities and it is a campus, and I have got a meeting in the Lombardi conference room in Building 3 and it takes me like an hour to find this place. I've got to ask people and they say to go to this building, or that building - certainly it is not going to tell me if there were any services nearby like if there is a printer, or a fax machine, or a copier, or a coffee maker, or anything like that. So my expectations, personalized, are dramatically different than what I have in the business life. Combine that with the fact that we all have an aging workforce problem out there. As the workforce continues to age, our new workforce coming online has a completely different set of expectations than what we grew up with. I thought that when I was a kid in college, at the very end of college, I got an email address.

I used it a couple of times while I was in college. So I just started growing up with email, and I go back to my daughter who is shaking the picture. The expectations are totally different. Even outside of just the aging workforce problem that we have, those people are our consumers. We need to be able to connect with them. They have a whole different set of expectations in the way that they interact with companies. Back to the old lagging indicators, I mentioned that we are paying attention to only the lagging indicators that are out there when there is this entirely new host of signals that have been generated. These new signals, not only do they create a tremendous amount of opportunity for us to take advantage of, but they also cause a lot of noise in the system as well. We have to be careful that we help this new base of decision makers that are coming online to isolate the signals that are going to be the most impactful to them and delivery the highest amount of value. We want to help cut through the noise, isolate that, and provide to them. Rather than simply massive amounts of data, we want to provide them intelligent data. We want to give them the ability to focus on those new symbols that are going to be most impactful and most important to them.

I talked a little bit about the decision making process. The decision making process overall hasn't really changed. The three fundamental tenants of decision making is that you want to be informed, you want to align that decision with some objective, and you want to adapt. When you look at that to where we are at today; the informing, aligning, adapting is not only business intelligence; it is not only enterprise performance management; or governments, risks, and compliance; it is the combination and it is the bringing together of all three of those with these new signals that are also out there that can really drive and impact a business. I'm not saying that you're going to start recording Twitter information on your SCC five-
ways(?) anytime soon, but what I am saying is if every one of your sales managers, on a daily basis, had the ability to understand customer sentiment and what their customers were thinking about their business, that that might not have an impact on the way that they are dealing with customers and your brand out in the marketplace.

It may not be as impactful as the balance sheet or the income statement, but it is also a very good leading indicator. When you look at talking about the adapting component of this, and I think about that in a way with financial performance management information, financial information, but also some of the new data that is out there. In fact, when you made the comment this morning about BP, that kind of struck me. They almost collapsed a global company by one event. I am almost certain that the CFO wishes that they would have been collecting and/or monitoring and really processing all of the data that has been coming off of the well head and the rig. Would they have been provided some forewarning that this situation was going to happen. Maybe, even worse, they were provided a forewarning that this was going to happen, but the systems weren't in place and the checks and balances weren't in place to provide that information out to the appropriate individuals to make the decisions.

Yes, it is going to cost us X amount of dollars to shut down this platform and correct the problem proactively, but based on the risk profile that is associated with that, this is an easy decision. It is a decision that we have to make. So when you look at that machine, the machine data being combined with the financial data that all of you care about here in the room so very much, it's a really, really powerful combination. You can go down the list whether is is consumer sentiment, whether is is machine data that is being delivered, whether is is data coming off of a Coinstar, Redbox machine being sent back to headquarters, whether it's to do with Lexmark, whether it is information that their printers are are sending back. They have got some really interesting type of predictions that that can indicate, not only just on their business, but on the economy as a whole. It is a very, very powerful combination.

I wanted to kick this off here a little bit. Hopefully open up your minds in terms of looking at the amount of information that is out there as it pertains to the CFO, the office of finance, your role and how you can use that information not only to provide you better financial growth, but also look at that and help your revenue and company growth overall.

Don't miss next year's action at ProformaTECH 2013, where you can learn how to leverage technologies to maximize business results.

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