@ThingsExpo Authors: Mehdi Daoudi, Liz McMillan, Elizabeth White, Yeshim Deniz, Pat Romanski

Related Topics: @DXWorldExpo, @CloudExpo, @ThingsExpo

@DXWorldExpo: Blog Feed Post

Big Data Dilemma: Save Money vs Make Money | @BigDataExpo #IoT #BigData #Analytics

Setting the tone for your Big Data and analytics efforts and investments

Big Data Dilemma: Save Me Money Versus Make Me Money

My friend Dan sent me this press release (since he knows that I like all things “Data Analytics” related). In the press release, “Boeing Announces Data Analytics Agreements with Six Airlines,” Boeing announces that they are providing advanced analytic solutions to several airline customers including:

  • All Nippon Airways (ANA) signed a renewal contract for Airplane Health Management (AHM) on its entire future fleet of Boeing 787 aircraft. ANA uses AHM tools to monitor their aircraft in real time and proactively manage maintenance operations more efficiently.
  • British Airways signed a contract for Wind Updates, currently installed on 88 airplanes with plans for additional fleet integration. Customers of Wind Updates typically average a savings of 200-400 lbs. of fuel per flight by leveraging real-time information about atmospheric conditions to improve performance.
  • Delta Air Lines signed an agreement to use Airplane Health Management (AHM) on its Boeing 737, 747, 767 and 777 fleets. Delta uses AHM’s analytics-based predictive alerts to reduce delays and cancellations by scheduling maintenance in a controlled manner, to avoid schedule disruptions.
  • GOL signed an agreement to use the Engine Fleet Planning and Costing (EFPAC) tool, which significantly reduces operating costs by determining specific engine management practices over the life span and enabling better decision making.
  • Pobeda Airlines signed a contract to deploy Fuel Dashboard services across its fleet of Boeing 737s. Fuel Dashboard helps airlines reduce fuel consumption 2-7 percent annually.

This is a smart move by Boeing to create new services (and new sources of revenue) to help its airline customers get more value out of their investments in Boeing aircraft. It even sets the stage for Boeing to expand beyond just servicing and supporting Boeing aircraft to servicing other aircraft (Airbus, Bombardier, Embraer Lockheed, McDonnell Douglas, etc.) in order to create even more monetization opportunities for Boeing.  I love it!

However, I’m always just a bit distressed by organizations that are so quick to give up their data for a short-term win. It won’t be long until all the airlines have the same analytic services being provided by Boeing or GE or Pratt & Whitney.  And if everyone has the same analytics, what’s the long-term source of competitive advantage?  In fact, I think it boils down to a very important organizational and cultural mentality:

Does your organization see big data as an opportunity to “Save Me More Money”, or does your organization see big data as an opportunity to “Make Me More Money”?

This is not an insignificant question, because it sets the tone for your big data and analytics efforts and investments, and how committed your organization is to leveraging data and analytics to power the business.

It’s a corporate cultural and management issue and I see it all the time in my big data travels. Some companies are focused on the “save me more money” aspects of big data (which it then makes sense to outsource) but others are focused on the “make me more money” aspects of big data where they see data and the associated insights as a means for uncovering new monetization opportunities.  This corresponds to Phase IV: Insights Monetization (see Figure 1).

Figure 1: Big Data Business Model Maturity Index

The “Insights Monetization” phase of the Big Data Business Model Maturity Index guides organizations to focus on capturing, refining and re-using the analytic insights (captured in Analytic Profiles – see “Orphaned Analytics” blog), to identify “white spaces[1]” in the markets to create new monetization opportunities such as:

  • New products
  • New services
  • New markets
  • New channels
  • New audiences
  • New partners

So what insights might these airlines be forfeiting – insights that might lead to new monetization opportunities – by outsourcing some of their analytics to Boeing?  In order to answer this question, we first need to identify the airlines’ key business entities; that is, what are the business entities around which the airline would want to gather behavioral insights such as tendencies, inclinations, propensities, usage patterns, interests, passions, associations and affiliations?  Well, my starter list of key business entities for an airline would include the following:

  • Airplanes
  • Routes
  • Hubs
  • Pilots
  • Mechanics

The next step would be to identify (brainstorm) the types of [predictive] insights that one might want to capture on each key business entity, such as:

  • Airplanes: Which airplanes are most efficient from an operational as well as performance perspective? Which airplanes are most efficient with which routes and under what weather conditions (seasonality)? Which airplanes are “easiest” to maintain? Which airplane configurations are most fuel efficient? Which airplane configurations get the highest passenger satisfaction and referral ratings from the airlines’ “most valuable” passengers? Which airplanes are easiest to re-configure?
  • Routes: Which routes are most efficient from an operational as well as performance perspective? Which routes are most efficient under weather conditions (seasonality)? Which routes to the same destinations get the highest satisfaction, Net Promoter Scores (NPS) and referral ratings from the airline’s “most valuable” passengers? Which routes have the lowest percentage of weather-induced delays?
  • Pilots: Which pilots are most efficient from an operational as well as performance perspective? What are the background characteristics (tenure, experience, certification, training, demographics, behaviors) of the “best” pilots”? Which pilots are most effective on which routes and under what weather conditions?

I think you can start to see the realm of what’s possible (if not, you may want to sign up for one of our Vision Workshops) with respect to the types and levels of insights that can be gathered about the organization’s key business entities even from activities that start out to “save me more money” perspective.

Transportation Industry at Phase IV
Let’s see another example of Phase IV in action: transportation.  Let’s say that you operate a fleet of vehicles (company cars, rental cars, taxis, limos, delivery trucks, shipping trucks, etc.).  While the car and truck manufacturers could (and probably will) offer analytics to help fleet operators to reduce their operating and maintenance costs, the operators of those vehicles should care about the analytics because those vehicles are emitting tons of potentially valuable data about customer preferences and usage patterns, travel congestion, destination preferences and product performance.  For example:

  • What features are most used on the car (could guide the development, pricing and packaging of vehicle features)?
  • What radio stations are most used on the car (could create digital marketing and cross-sell opportunities)?
  • What routes do passengers take most often (could create data that might be valuable to city and road planners, and could also create marketing and promotional opportunities for nearby services)?
  • Where are the most common destinations by what times of the year (could create marketing and promotional opportunities)?
  • Where do most accidents take place (could be used by insurance companies to set rates and by city management for road maintenance planning)?
  • What driving patterns are most unusual (could be used to identify potentially drunk drivers, texting drivers or drivers playing Pokemon Go)
  • Etc.

In fact, the “exhaust” from the operation of these vehicles could be more valuable than the vehicle itself!!

It’s very seductive to chase after the “low hanging fruit” by choosing to outsource your big data “save me more money” efforts. And there is nothing wrong with those short-term wins.

However, organizations should not make short-term cost-saving decisions that sacrifice the longer-term monetization and competitive differentiation opportunities. If everyone is using the same analysis to run their businesses, then where are the sources of competitive differentiation?

If you look at analytics just as a way to drive out costs, then you probably should outsource as much analytics as possible. However, if you believe that the exhaust from your product and service usage might be more valuable than the product and/or service itself, then you need to embrace big data analytics as a source of competitive differentiation.

Yes Dan, our Big Data challenge is up-hill both directions!

[1] “White space” is defined as unmet and unarticulated needs in the market. It is where products and services don’t exist based on the present understanding of values, customer needs or existing competencies.

The post Big Data Dilemma: Save Me Money Versus Make Me Money appeared first on InFocus.

Read the original blog entry...

More Stories By William Schmarzo

Bill Schmarzo, author of “Big Data: Understanding How Data Powers Big Business” and “Big Data MBA: Driving Business Strategies with Data Science”, is responsible for setting strategy and defining the Big Data service offerings for Dell EMC’s Big Data Practice.

As a CTO within Dell EMC’s 2,000+ person consulting organization, he works with organizations to identify where and how to start their big data journeys. He’s written white papers, is an avid blogger and is a frequent speaker on the use of Big Data and data science to power an organization’s key business initiatives. He is a University of San Francisco School of Management (SOM) Executive Fellow where he teaches the “Big Data MBA” course. Bill also just completed a research paper on “Determining The Economic Value of Data”. Onalytica recently ranked Bill as #4 Big Data Influencer worldwide.

Bill has over three decades of experience in data warehousing, BI and analytics. Bill authored the Vision Workshop methodology that links an organization’s strategic business initiatives with their supporting data and analytic requirements. Bill serves on the City of San Jose’s Technology Innovation Board, and on the faculties of The Data Warehouse Institute and Strata.

Previously, Bill was vice president of Analytics at Yahoo where he was responsible for the development of Yahoo’s Advertiser and Website analytics products, including the delivery of “actionable insights” through a holistic user experience. Before that, Bill oversaw the Analytic Applications business unit at Business Objects, including the development, marketing and sales of their industry-defining analytic applications.

Bill holds a Masters Business Administration from University of Iowa and a Bachelor of Science degree in Mathematics, Computer Science and Business Administration from Coe College.

@ThingsExpo Stories
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.
The standardization of container runtimes and images has sparked the creation of an almost overwhelming number of new open source projects that build on and otherwise work with these specifications. Of course, there's Kubernetes, which orchestrates and manages collections of containers. It was one of the first and best-known examples of projects that make containers truly useful for production use. However, more recently, the container ecosystem has truly exploded. A service mesh like Istio addr...
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
As IoT continues to increase momentum, so does the associated risk. Secure Device Lifecycle Management (DLM) is ranked as one of the most important technology areas of IoT. Driving this trend is the realization that secure support for IoT devices provides companies the ability to deliver high-quality, reliable, secure offerings faster, create new revenue streams, and reduce support costs, all while building a competitive advantage in their markets. In this session, we will use customer use cases...
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
DXWorldEXPO LLC announced today that "Miami Blockchain Event by FinTechEXPO" has announced that its Call for Papers is now open. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expe...