Big data and the art of winning in business

Big data appears to be among the big buzzwords of the moment. While there's plenty of hype around the topic, there does seem to be an emerging consensus that companies that can harness big data will gain important competitive advantages in their industries.

In fact, Gartner, the big information technology research and advisory company, titled a September report on the topic "Big Data Adoption in 2013 Shows Substance Behind the Hype."

Just what can big data do for businesses, and for logistics and supply chain management in particular? Although sports analogies are overdone, I can't help but make one here. As I read about big data and how it might be used, I am constantly reminded of Michael Lewis's terrific book Moneyball: The Art of Winning an Unfair Game, which looked at how the Oakland Athletics built competitive teams despite a relatively small budget through the use of detailed statistics on players. The gospel has spread, and now many teams have data specialists on staff. Field managers can pull up details on, for instance, how well a particular hitter hits a particular pitch in a particular spot in the strike zone late in a sunny day game at home—and if he does hit it, where the ball is likely to go. Happily for fans, the pitcher still has to pitch, the hitter can still confound predictions, and fielders remain human, keeping the drama in the game. For businesses considering how to use big data, though, the baseball analogy demonstrates both the potential and the pitfalls. The best pitch can still get hit out of the park.

Using data has long been important to making good business decisions, of course. Here at DC Velocity, we've embarked on our 11th annual research on metrics in the distribution center in collaboration with the Warehousing Education and Research Council, Georgia Southern University, and Supply Chain Visions. (Look for the results in our May issue.) But big data is fundamentally different in scale and scope from most of the data used in business applications. Businesses have long struggled with how to turn massive amounts of data into actionable information, and big data offers potential to exacerbate that problem by an order of magnitude, but with modern analytical tools also offers potential for substantial business gains. Richard Sharpe, CEO of Competitive Insights, has begun exploring how on a blog he writes for DC Velocity, which you can find on our website, and I recommend following it.

But not being a data maven myself, I go back to the baseball analogy: If you know which players are likely to score the most runs, you're going to win games.