- Where Insurance & Technology Meet

When It Comes to Big Data, Does Size Matter?

Recent reports suggest that size might very well matter when it comes to consuming and utilizating Big Data.  But it might be the size of a human organ, not be the size of the data set, that is the critical success factor. Help us ‘think this through’. Have a read and let us know your thoughts.

As reported in eMarketer, “research from Econsultancy and web analytics consultancy Lynchpin, a majority of marketers worldwide say that less than half of all the analytics data they collect is actually useful for decision-making.”  However, the utilization rates may have little to do with data themselves.

As the eMarketer analysis notes, “In many cases, web analytics are still not tied to a broader business strategy—and some companies reported not even having such a strategy.”  Data from Econsultancy and Lynchpin indicate that in 34% of firms surveyed web analytics were ‘Not at all integrated’ with business plans.

However, this situation is changing.  The research in 2012 found more firms having integrated strategies than indicated in 2011 research.  This suggests that the we are starting to learn how to use the data and acquiring tools to help us.

If spend is any indicator, the insurance industry’s interest and capabilities with Big Data and analytics are growing.  As we noted in July, research from SMA found that spend on insurance analytics tools is increasing in IT and in the user communities.

So the demand is there, we just need to be able to use the tools.  And we need great people to make sense of the data produced by the tools.  The term that is being used for such personnel is ‘Data Scientist’.  IBM describes this role as “part analyst, part artist.”    Anjul Bhambhri, vice president of big data products at IBM, says, “A data scientist is somebody who is inquisitive, who can stare at data and spot trends. It’s almost like a Renaissance individual who really wants to learn and bring change to an organization.”

Here’s the rub:  these skills are not ready commodities.  According to Mckinsey & Co, cited in Information Week, there is already a shortage of these individuals.  Moreover, unlike other IT skills, these resources are not easily developed. “Unlike most other disruptive technologies–cloud computing, virtualization, mobile computing, for example–big-data skills require specific talents with data, numbers, and business processes, and long training or retraining periods, McKinsey concluded.”

We agree.  Further, we think the situation may be even more complex.  In addition to developing insurance ‘quants‘, we will have to have other actors raise their skills in utilizing the results of the analysis.   In June of 2011, we blogged on the importance of ‘Greyware’ in making use of sophisticated analytics.  We noted this requires a combination of data scientists andexperienced insurance managers and analysts who are conversant enough to be able to consume analytic output in formulating and monitoring business strategies.We would argue that size does in fact matter with big data… The size of the intellectual capacity to convert data to actionable information and to convert information to organizational knowledge.

What do you think?  Are Big Data and Analytics important in your organization?  If so, do you have the necessary people skills to analyze the data and consume the results?