This is the second part of an interview conducted with Nilan Peiris, Chief Marketing Technology Officer at HolidayExtras. He spoke to us for half an hour last week on what he views as the key ways in which Big Data is going to change business strategy and structure. To view the first part of the interview, click here, if not read on for more insights from Nilan, including his predictions for big data in 2012.
You mentioned breaking down the siloed data model, is that an executive problem or a technical one?
It's a really good question. At the enterprise level when you've got an IT team of 40,000 or a workforce of a million I've not seen the solution so I can only talk about it from my experience with a team of 150 people. We run multiple reporting lines into our executive board, which means that the most appropriate executive director is used on the right task. This ensures that instead of the commercial team, for example, building its own technical solution for managing yielding of prices, they are able to work directly with the technical director and the technical teams in order to make that happen. To get that point you need high levels of trust and understanding of the joint plan and the capabilities you are prepared to invest in internally.
Because of a lot of analytics technology is new to the market, how important is it to prove to your board and management team return on investment?
I don't actually believe in return on investment as a tool. For me I look to run projects that deliver more than Â£100,000 and if they are not doing that then there is a hurdle rate at that level. I'm prepared to invest and sink cost to trial ideas that are aligned with my strategy but I don't believe in investing a huge amount of time trying to work out how much things are worth before you sign and launch them.
Can SMBs really benefit from Big Data as much as the large multi-nationals can?
I would actually challenge whether big organisations are actually leveraging Big Data. The two biggest opportunities for me when it comes to Big Data are customer acquisition and monetisation/conversion. So what I mean by that is: how many travel companies are out there looking at stuff getting kicked off the Twitter firehose and Facebook profiles to figure out where their next leads are? How many companies are building eco-systems around that traffic and selling it on to target buyers? None! There are a few people beginning to dip their toe in the water there but there really isn't a lot of traction in the market. The next area is in monetising customers. We're still in the era where companies hold on to their email addresses and their total customer histories and try and drive customer lifetime value out of that. That's really interesting but all that data is out there on the internet in one of your customer's social footprints. How well have you understood that to help you figure out what product you should aim to try and sell into that customer next time they give you a call. I see that being a real opportunity for growth and I can't see anyone chasing that down well enough.
Do you think we may move into a world where data sharing between organisations may become a good way to help each other to grow?
There's a sensitive but exciting project that I'm running at the moment where we are beginning to explore that within the travel industry. I can't talk about it by name but I can talk about the nature of it. It involves sharing customer data to enable us to help our partners in the space. What I find is that the single biggest challenge for that is the parochial CMOs who define their role by the amount of customer data that they have and the Commercial Directors and Chief Executives are really missing a trick by not dismantling that wall around their data in order to enable them to grow their profits and focus on what is core to their business. So I see huge cultural barriers, I see huge existing barriers around how the status quo is at the moment and people have built up fiefdoms and walls around their data. I absolutely see value in dismantling them. I'm not sure when that will happen.
Is it also a case that customers are not willing for organisations to whom they provide data to share that asset?
I'm of the opinion that in 10-15 years time privacy will be the kind of thing that our children will look at us and say â€˜what was that all about?' If you look at the next generation now you can see the ease and comfort with which they share and publicise information on the internet and don't really mind how that is used from an advertising, targeting, re-targeting perspective. There is obviously a complete black-and-white between that and your medical records, that and your credit card information. That is obviously sensitive data and should be continued to be treated in that way. But your social footprint and how that is leveraged by companies to be more useful to you, I hope that we are moving in a direction where people are much more comfortable sharing this stuff and understanding the value with which companies can use that to give them value back.
What will 2012 hold for Big Data?
My big three platforms around Big Data are: infrastructure layer, the aggregation layer and the analytics layer. None of these layers have hit commoditisation, few have been productised yet. So you will begin to see the commoditisation at the infrastructure layer with players like Amazon and Google beginning to take away the very hard problem of storing this data to disk. The aggregation layer, I believe you will begin to see the very first company beginning to really demonstrate how you can pull this giant data that you stored and throw it up against your existing data sets or against other data streams. I think that people such as DataSift will get to market with products that enable customers to that but they really are the very first innovators in that area. In the analytics space there will be a lot of noise, with people saying what they did after they did it. There will be no development on a turn-key solution to customer acquisition, I think that's a long way away.
What is it about Big Data World Europe that you are really looking forward to?
I think the line-up is incredible, I think Terrapinn have done a fantastic job in getting some of the thought-leaders in this space over to the UK to show where they think the industry is going.
If you're really interested in this topic and are looking to move your company with Big Data, then click here to learn more about Big Data World Europe 2012.