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Big Data and its Implications on Decision Making

Big Data and its Implications on Decision Making

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Published by Yaqin Khan
The phenomenon of ‘Big Data’ and how it has changed traditional approaches to decision-making. Includes examples on big data and discusses ways with which decision- makers can address rising issues with big data.
The phenomenon of ‘Big Data’ and how it has changed traditional approaches to decision-making. Includes examples on big data and discusses ways with which decision- makers can address rising issues with big data.

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IB2420 – Digital Business & Workplace Technologies

Discuss the phenomenon of ‘Big Data’ and how it has changed traditional approaches to decision-making. Using examples discussed in the lecture and seminar on big data, discuss ways with which decisionmakers can address rising issues with big data.

Student Number: 1025781 Word Count: 2045

IB2420

1025781

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However. with scientists insisting that the brain has the processing power similar to the sum of all the processing powers of all the computers on Earth. As big data developed and organisations realized they had to jump on the bandwagon. expensive or not available digitally. Just before the advent of big data when data was inadequate. 1996) Decision-making is possibly the most important aspect of any business. humans can only handle so much and frequently experience “information overload” due to our limited short-term memory (Simon. 2012) IB2420 1025781 2 . (Economist Intelligence Unit. 2012) A vital aspect of big data is the impact it makes on who gets to make decisions and how they are made. expertise and skills. Every business activity comes down to a decision made possible by an employee somewhere within the firm. some top-level managers began to “over-ride their own intuition” if it didn’t agree with the data (McAfee & Brynjolfsson. it is foolish to simply take into account the employee’s experience and perception without backing it up with credible data. the best possible option was to allow people on the top of the hierarchy to make decisions taking into account their experience.Decision Making Humans were always heralded as the ultimate decision maker. This is referred to as ‘Intuition’ (McAfee & Brynjolfsson. 2012). With immense amounts of readily available data at hand.

velocity and variety information assets that demand cost-effective. Big data ranges from a “few dozen terabytes to multiple petabytes” depending on which sector the industry is in and the availability of diverse software tools (Maniyka et al. are raw. many things have contributed to the rapid increase in data volume – 10.Big Data Before dwelling into the vast abyss of information related to big data. it is imperative that terms within the phrase ‘Big Data’ are fully understood. Additionally. big data refers to “datasets whose size is beyond the ability of typical database software tools to capture. (White. However. 340 million tweets are send per day making it nearly 4. Gartner states that it is a “high volume. innovative forms of information processing for enhanced insight and decision making”1. tweeting and                                                                                                                 Definition of Big Data obtained from Gartner’s IT Glossary – accessible at http://www. manage and analyze” (Maniyka et al. variety and velocity. call center optimization and social media just to name a few.000 payment card transactions are made every second around the world. Over the years. the definition stated above is deliberately subjective and features an imprecise definition of the size of the dataset in order for it to be considered big data.gartner. texting. 2011) There are three important characteristics that form big data – volume. it also has to be understood that big data comes in many different forms and has many different uses such as real-time fraud detections. 2011).com/it-glossary/big-data/ 1 IB2420 1025781 3 . random pieces of facts or observations that are regarded as having no significant value until they have been processed and converted into information. This is to take into account rapid technological developments in the future that will frequently alter the actual size of a dataset that is said to be ‘big’. according to Baptista (2012a). 2011). store.000 tweets a second and more than 5 billion people calling. Consequently. Importantly. Data.

data storage was the main concern but taking into account the decline on storage costs recently. medias including audio and video. structured record creation. big data doesn’t just come in a singular text format available for easy download. cross-border banking transactions and many more. Previously. Technologies such as smart metering and RFID (radio-frequency identification) tags are contributing to the rising necessity to tolerate huge floods of data in near-real time. emails. It translates into the speed at which data is being produced and processed in order to meet demand. In addition. It is estimated that 80% of an organization’s data is not numeric but still retains relevancy during analysis and decision-making (SAS Institute). 2011). storage is rarely seen as much of an issue and the concern shifts greatly to relevancy and creating value within the huge volume of data gathered. Velocity involves “constant streams of data. it combines “traditional databases to hierarchical data stores created by end users and OLAP systems” (SAS Institute). IB2420 1025781 4 .browsing the web accounts for petabytes of information being generated constantly (SAS Institute). and availability for access and delivery” (Gartner.

and just half a percent of that is being used for analysis. from a business’ perspective. This is quickly becoming a growing concern as governments are trying to cut their budget deficits in light of the recent economic crisis. storing and analyzing of big datasets are expected to amount up to $16. faster processors. revenues involving the collection. 2012a). innovation and consumer surplus (Baptista .Big Data and the Application of New Technologies for Decision Making Big data.9billion in 2015 (Burn-Murdoch. The stark difference between data availability and utilization presents itself as a major advantage for businesses across the globe. understand it and take advantage of it’s value in order to reach the goal of exploiting the most relevant data and using it for optimized decision making (SAS Institute). tax fraud and/or evasion. Most governments all around the world suffer one major problem.ibm. refer to http://www01. Furthermore. is seen as the key basis of competition within firms in an industry. cloud computing and many more have supported the ability for the firms to obtain immense amounts of data. bigger server processing capacities. Faster. organisations are enabled to make the most out of big data and big data analytics. just 3% of all data available in the world is currently tagged and ready for use. It highlights new influences on productivity growth. 2012a). The development of a big data allows government departments to now “cross                                                                                                                 For more information about Hadoop and its function. Due to rapid technological advances in the last few years. cheaper and more easily obtainable storage solutions. According to the Guardian (Burn-Murdoch. the development of Hadoop (an open-source framework that supports data-intensive distributed applications for the processing of large data sets)2.com/software/data/infosphere/hadoop/ 2 IB2420 1025781 5 . 2012b).

reference tax databases with other information” that used to seem irrelevant to officials when performing tax checks such as travel data and vehicle registrations. IB2420 1025781 6 . it might not be directly related to fraud however it will aid tax officials in decision making by better targeting their checks and procedures (Burn-Murdoch. 2012b). Even if a suspicious result from cross-referencing occurs.

2012a).com/terms/c/cdo.investopedia. loans and other assets. In Oakland. the misapplication of so much data can reveal more than what was intended. 2012). BurnMurdoch also goes on to explain three main reasons why data in such amount requires protection – privacy. which resulted in the financial crisis (Naughton. 2010). the percentage is expected to go beyond 40% by 2020 (Burn-Murdoch. custody and confidentiality. rating agencies and other financial institutions created and relied on certain models. but failed to take into consideration the risks reflected in the real world (The Economist.Issues with Big Data However. which could lead on to                                                                                                                 It is an investment-grade security backed by a pool of bonds. just over 35% of all data needed some form of protection but as private companies and the public sector obtain and generate huge amounts of private information. CDOs do not specialize in one type of debt but are often non-mortgage loans or bonds. Many financiers who claimed to have created easy moneygenerating schemes were actually producing very elaborate. incomprehensible products such as the Collateralised Debt Obligation3. very detailed information about arrests – time and place – were made available to the public through a secondary website called Oakland Crimespotting. Definition obtained from : http://www. California. the website revealed a lot about the city’s police forces such as their strategies and tactics (The Economist. Banks.asp#ixzz2IYaI3tCh 3 IB2420 1025781 7 . Although this was seen as a compliance to making information freer for everyone. big data contributed to an even more popular failure. Even something as simple as your email could be made known to the public. Furthermore. Last year. 2010). which in all fairness required a vast amount of data input. The recent economic meltdown can be easily blamed on the mishandling of data sources. Another issue surrounding big data is data security.

The limit is endless.your identification. IB2420 1025781 8 . and contacts and then on to bank details and medical records. documents.

The benefit to the government is that it reduces the chance of data redundancy and inconsistency by having a single form that relates to only one individual. numerous portions of related data could be linked and intermeshed together in order to create a singular. the agency could just acquire these pieces of information electronically held at the Identity and Passport Service if you already possess a UK passport. authoritative dataset. It is basically an interactive form that can be filled easily online. businesses and future frameworks for public policies.Big Data : The Case of Public Administration Governments are in a very shaky position now with the dawn of big data. it’s virtually impossible to obtain information pertaining to any single citizen from one legitimate source. After the coalition government retracted the Identity Cards Act of 2006. If well implemented. The idea has already been taken on and implemented by another country. Furthermore. Choices policymakers choose about obtaining. the United Kingdom does not have a unitary national identity database. The Australian government produced a document called the ‘SmartForm’. Australia. It has built in data validation checks and calculations and dynamic questioning fields to make the experience as easy as possible for the end-user. big data analytics could potentially have a very positive impact on how the government conducts itself. Government agencies in Australia can take advantage of the SmartForm and IB2420 1025781 9 . utilizing and releasing data will define the population. With the introduction of big data analytics. For example. generations of new technology have stemmed multiple reproductions of the same piece of data. Yiu (2012) proposed the idea that since the Driver and Vehicle Licensing Agency requires your photograph and signature in order to produce your UK driving license.

a strategy to combat rising issues surrounding big data. IB2420 1025781 10 . The consortium started the project by distributing master data to the public organisations for the development of a joint use for data (Sas-italy).obtain data about any individual they require from the SmartForm database. Taking into account the UK’s lack of cooperating government divisions. the region’s head of government management. One of the CSI’s top priorities is to support the sharing of data between all the public entities in order to form a single regional public administration database and increase transparency. (Australian Government Online Business Resource) The Piedmont (Northwest Italy) public administration has also been using big data analytics in order to “plan and develop innovative public services that make life easier for citizens and businesses” as explained by Paola Leproni. Piedmont’s CSI (Consortium for Information Systems) helps public entities within the region collaborate for the exchange of best practices and the optimization of internal processes.

still find it difficult to adopt big data and integrate within their organisation’s strategy. Secondly. “Data-driven decisions tend to be better decisions”. 2013). public or private. but the data at hand implies that it is truly the way forward. 2012). On a concluding note. The scarcity of data scientists is seriously becoming a limitation in certain sectors (Davenport & Patil. However. it’s impossible to say that the decision makers who harness big data to aid them will rise. Decision makers will either have to accept the fact or be replaced by other leaders who embrace it. Langer (2012) reiterates a very important fact that many fail to realize – “human touch is still an important component of how we use big data and balance how those decisions are made” IB2420 1025781 11 . Big data technologies are immensely arduous and there are a very few select individuals who have the necessary skill set needed (Woo. 2012). most organisations lack the mindset required to fully exploit the most value out of big data. Many firms are used to gaining insights through data warehousing and/or business intelligence reports but they also fail to understand that the warehousing model focuses on the wrong time frame as it examines the past rather than big data analytics’ focus on predicting the future (Brunelli. McAfee and Brynjolfsson (2012) also clearly state.Conclusion There is a lot of hype surrounding big data analytics however many organisations.

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