Big Data in Practice

How 45 Successful Companies Used Big Data Analytics to Deliver

Extraordinary Results

Bernard Marr
Wiley © 2016
308 pages
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Rating Take-Aways

7
7 Applicability • Organizations have collected and analyzed data for many decades.
7 Innovation • Big data – used in combination with new and powerful algorithms, machine learning,
8 Style artificial intelligence and cheap storage – changes everything.

• All organizations today, big or small, must embrace big data or get left behind.

• Across industries, some organizations are leveraging big data and analytics successfully.
Focus • In retail, Walmart analyzes data in “real time” to make nearly instant decisions about
what to stock and where to display it.
Leadership & Management
Strategy • Government streams data from biometrics and sensors that can help identify terrorists.
Sales & Marketing
• In entertainment, Netflix collects and analyzes data on everything you watch so it can
Finance offer you more personalized suggestions and recommendations.
Human Resources
IT, Production & Logistics • Rolls-Royce embeds sensors in its jet engines that enable it to spot and fix problems
before they surface.
Career & Self-Development
Small Business • Facebook analyzes unfathomable amounts of personal data to match your profile to
Economics & Politics targeted advertising.
Industries
• Privacy concerns and talent shortages challenge most organizations’ big data strategies.
Global Business
Concepts & Trends

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getabstract

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Relevance
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What You Will Learn
In this summary, you will learn:r1) Why organizations must embrace big data and analytics to succeed; and 2) How
different organizations apply big data, analytics, machine learning and AI successfully to gain competitive advantage.
getabstract
Recommendation
Big data expert Bernard Marr provides a practical, valuable and nearly hype-free reference to the current state of
big data, including predictive analytics, machine learning and artificial intelligence (AI), now in use across many
industries in various ways. He offers 45 case studies from more than a dozen industries to illustrate and describe
how organizations generate, collect, analyze and act on the big data. Marr’s grammatical style and seemingly random
organization of chapters take a toll, however, getAbstract recommends his study of each firm’s unique practices to
business leaders across all industries. Seasoned data scientists may find the material basic, but anyone else interested
in this field will gain a fresh understanding.
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Summary
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A Big Deal
Today enormous data generation combined with powerful analytics, algorithms and
artificial intelligence (AI) as well as cheap data storage, make this the era of big data. Big
data may not last – at least, not as a business term. Given the inconceivable amounts of
data that nearly every organization, across all industries, produces every day, the emphasis
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“Two things…are will move to “smart data.” Companies that use data selectively, analyze them wisely and
fueling this big data apply them to improve their decision making, will gain a competitive advantage over those
movement: the fact
we have more data
that don’t.
on anything and our
improved ability to Big data affects almost every industry and every job. Almost everything you do at work
store and analyze any
data.” and much of what you do at home – web surfing, social media activity, watching TV,
getabstract playing online games, and sending emails and texts – now produces data that multiple
organizations collect, analyze and act on for their profit. More industrial, office-based and
household devices – an estimated “50 billion by 2020” – connect to the Internet, creating
the pervasive Internet of Things (IoT). Every organization, regardless of size or industry,
must embrace big data and analytics to compete and thrive. Now, every business can gain
valuable customer insight and track inventory – whether tangible or intangible – in useful,
applicable detail.
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“Customers can
become data-rich with Retail
a great many options Retail proves a rich, fertile ground for big data. Few organizations match Walmart’s ability
but insight-poor –
with little idea about to conduct real-time analytics mining enormous data streams. This capability allows it, for
what would be the best example, to spot and solve problems in inventory, pricing and product placement, in less
purchasing decision to
meet their needs and than a half-hour, compared to two to three weeks in the past. In 2004, Walmart’s algorithms
desires.” flagged correlations between warnings of a major hurricane and increased demand for
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strawberry toaster pastry, allowing the retailer to stock and sell more before subsequent
storms.

Etsy, an online marketplace for makers and buyers of craft items, captures every action
visitors take on its site. Its analysts seek insight into what triggers a purchase and how

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 to make better “real-time, personal recommendations” to buyers. Like a growing number
of other firms, Etsy makes its data available to almost every employee. Each department
regularly makes experimental changes to the site and analyzes the resulting impact on sales.
getabstract Dozens of new, small changes appear on the site daily.
“Any organization
without a big data
strategy and without Ralph Lauren implants sensors in sports clothing to capture a wearer’s “biometric” data and
plans in place to start heartbeats per minute as well as the number of calories the wearer uses. It offers optimized
using big data to
improve performance exercise programs specific to individual customers.
will be left behind.”
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Science
The European Organization for Nuclear Research (CERN) generates massive amounts of
data from its Large Hadron Collider, which simulates conditions that may have existed at
the origin of the universe. Thousands of analysts around the world watch as “hundreds of
millions” of proton “collisions” take place each second at nearly light speed in the collider.
Only algorithms and super computers can manage this speed and volume to detect the
rare particles – such as the “Higgs boson” – that physicists seek. In global conservation
efforts, sensors, satellites, big data and predictive analytics help scientists track endangered
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“It doesn't matter how animals, plants and ecological systems and assess and predict the impact of pollution,
much data you gather deforestation and human encroachment. Seismologists use algorithms and “predictive
and analyze: It’s what
you do with it that modeling techniques” to analyze data from satellite photographs, sensors, atmospheric
counts.” conditions and past incidents to make earthquake forecasts that are accurate 90% of the
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time.

Entertainment
Netflix combines viewer data with analytics to understand and predict viewer preferences.
Netflix’s big data analytics led it to invest in House of Cards based solely on predictions, and
to use similar analyses in marketing the show. Netflix uses almost 80,000 factors to select
shows and movies. Data fed into Quill, a “natural language generation platform,” churns
out news stories that companies like MasterCard and Forbes, among others, currently
getabstract use. Most people don’t realize that an algorithm produced the published material. The
“It’s not a question of
whether businesses British Broadcasting Corporation uses “facial-recognition technology” to gain insight into
should be using big viewers’ emotions as they watch its programs, allowing it to adjust content according to
data but when and how
they should be using
viewer reactions. Caesars Entertainment has collected data on casino visitors for almost
it.” two decades. Today, it combines predictive modeling and “automated, targeted marketing”
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to personalize every visitor’s experience and maximize guest spending.

The Walt Disney Company spent nearly $1 billion in 2013 to install sensors throughout its
Florida theme park. This enables it to track more than 120 million annual visitors, capturing
their movements in the park, how long they spend in lines, and what they buy and eat.
Guests who opt to wear Disney’s “MagicBands” can plan and customize their vacations
while Disney uses the data to personalize their experiences and manage its operations.
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“Reporting the most
essential and valuable Video game makers Electronic Arts and Zynga capture everything players do online to
insights your data
contain is a vital part
optimize games and tailor them to individual player preferences. Like Etsy, Zynga makes
of the analytic process its data available to all employees, allowing about 1,000 ongoing simultaneous experiments
and requires specialized within live games and letting different products incorporate practices from other games.
communication skills
– both in humans and
machines.” Manufacturing
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Embedded sensors and chips connect devices other than computers to the Internet
continually adding to the Internet of Things (IoT). Firms like Rolls-Royce use the IoT to
capture data from their products as customers use them. Rolls-Royce’s jet engines transmit

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 real-time data on “every tiny detail” of their operations to analysts. Then, the analysts use
algorithms to predict maintenance needs before the engines exhibit problems discernible to
humans. John Deere aggregates data from sensors attached to its heavy equipment, which
farmers use worldwide. Deere analyzes the data and shares it with farmers online – offering
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“Computers...aren’t insight into a range of problems, including the best mix of crops to plant in specific places
capable of teaching and at certain times, and how to improve fuel conservation. The portal offers predictive
themselves anything.
We have to work it out maintenance information, allowing just-in-time delivery of replacement parts for tractors
first and give them and other farm equipment.
algorithms to follow.”
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Sports
The IoT also affects sports. In Formula One Racing, for example, sensors in cars produce
real-time data about microscopic mechanical faults, detailed “driver performance,” and
more. When the driver enters a pit stop, the crew knows exactly what to fix to get the
car back in the race faster. In 2012, driver Sebastian Vettel crashed during the Brazilian
Grand Prix. The F1 championship title was at stake. Vettel didn’t need to win the race, but
he had to finish with enough points to secure the championship. Using data from the car
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“Big data in health with predictive modeling, engineers pinpointed the precise fixes they had to make to enable
care is still in its Vettel to finish the final 70 laps and win his third consecutive title.
infancy, and there
remains a lot of hype
around the possibilities, Cyclist Sky Christopherson monitored each member of the US Olympic Women’s Cycling
sometimes at the
expense of tangible Team prior to the 2012 London Games. Data on their sleep patterns, diet, training habits and
results.” various biometrics allowed coaches to customize their training and alter their sleep habits.
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The perennially disappointing team won a silver medal.

Small Business
Pendleton & Son Butchers in London faced a big commercial threat when a large
supermarket moved into its neighborhood. Using sensors in its store windows, Pendleton
tested how passers-by reacted to various experimental displays, assessing their likelihood
of entering the store. The data allowed Pendleton’s owners to optimize their displays. It
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revealed that the store had an opportunity to stay open after normal business hours to serve
“No matter what job late-night pub goers.
you’re in and…what
industry you work in,
big data will transform Though not technically a small business, Dickey’s Barbeque Pit, a chain of more than 500
it.” restaurants across the US, captures and aggregates sales data from cash registers from the
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use of loyalty cards and surveys. It analyzes the data three times each hour to help its stores
make immediate, better decisions about inventory, promotions and actions in light of many
other key performance indicators.

Health Care
Doctors and nurses take handwritten notes and keep records in a wide variety of formats.
The nature of this “unstructured data” makes big data analysis difficult. To enable
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“Data is improving our analysis, “optical character recognition” software structures the data. Then, algorithms and
ability to understand machine learning empower personalized medicine and, by aggregating the data, generate
and anticipate the
effects human activity
epidemiological insights.
has on the global
wildlife population, and Government
how those changes will
inevitably come back to US Immigration and Customs developed its AVATAR kiosk system with sensors and
bite us.” cameras that measure travelers’ movements and expressions. In combination with an
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automated agent who asks questions and simultaneously checks travelers against profile
databases, the system detects dishonesty and flags suspect profiles.

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 The US Marine Corps uses a system that “synchronizes” and analyzes data from multiple
sources in real time to predict attacks by improvised explosive devices and to detect those
who build the bombs. Transport for London utilizes a “smartcard ticketing system” to
collect data about customers’ use of all manner of public transport, to improve flows and
alert ticket buyers to upcoming problems.

Information Technology
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“Everything we do The IT industry leads in the use of big data in many ways. Facebook may have the largest
in our increasingly collection of personal data ever amassed. LinkedIn has more than 400 million members,
digitized world leaves a
data trail.”
each with a detailed business profile. Facebook and LinkedIn use their anonymized user and
getabstract member data to match advertisers to the precise audience they want on factors that range
from demographics and income to taste in music and movies. LinkedIn matches employers
to job seekers using similar analytics.

Microsoft leverages its enormous reach to collect data from everything its users do in its
Windows 10 operating system and how long they do it – including what other software they
use. Microsoft applies the data to improve its operating system and, potentially, could use
it to link advertisers to targeted Windows users. Nest uses sensors in its home thermostats,
fire alarms and security systems to optimize homeowners’ energy use and to send fire and
security alerts.
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“We are witnessing
a movement that will Watson, an IBM AI technology, learns and improves continuously by digesting enormous
completely transform amounts of data and using algorithms and machine learning to process it. Watson works in
any part of business
and society.
health care to diagnose cancer, and is also useful in fields as varied as finance and crime
getabstract prevention. It represents the emerging and burgeoning field of next-generation AI that has
the potential to bring sweeping change. Google processes inconceivable amounts of data
through machine learning and advanced AI to maintain its massive lead in online search.

The Tools
An enormous range of database, programming, analytical, machine learning and AI tools
make up a robust market for the big data industry. A few, like Hadoop, appear in the suite
of tools used by nearly every organization. The storage use of Amazon Web Services is
getabstract widespread. Most companies use a variety of open-source and proprietary tools in their data
“Humans may not
recognize that a certain science operations.
pattern of activity in
the data correlates to
a particular likelihood Obstacles and Challenges
of an event taking Two primary challenges prevail – privacy and talent. Facebook, Microsoft, the US
place. But if there
is a correlation…a
government and nearly everyone else must balance data privacy issues with the benefits of
computer will be able to personalized services and targeted advertising. The competition for talent presents a major
spot it.” challenge for every firm that wishes to collect and analyze big data. Despite the potential
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that Microsoft and Facebook, for example, have to invade individual privacy, consumers
have so far shown willingness – even eagerness – to use their tools and give up privacy in
exchange for the benefits. Talent shortages may resolve themselves as more people enter the
field of data science and analytics. Wages are spiraling, and many firms find they can solve
data challenges only by using crowdsourcing services and by running public competitions.
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About the Author
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Bernard Marr consults, speaks and writes on big data and analytics.

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