Paradigma Quant Creativity www.paradigmaquant.com August 2015

BIG DATA FOR BIG FISHES

!What can Big Data do for you? !In the era of information, in which humans, smartphones, tablets, and computers interact

on a daily basis, a new player has entered the game field its name is Big Data and it

is here to stay. Big Data is something new, something interesting, something promising,

but also some times, something cryptic and enigmatic. Why did Facebook payed over

19 billion USD in 2014, for the messaging service WhatsApp? Why can Google predict flu

trends better than any medical service in history? These are questions that pop up in the

minds of organization managers, for which it is difficult today to read a newspaper,

attend a conference or meet a consultant who is not talking about Big Data. The

answer to these questions is that it is all about the data, the Big Data that is behind

services like WhatsApp or Google.

The analysis of Big Data can reveal a lot of information about one owns environment,

and since information leads to knowledge, Big Data can help organizations to better

manage their resources, to reduce costs, to increase revenue, or to launch better

products or services. However, the concept of Big Data is so broad that it is difficult to

asses what really Big Data is, and how an organization can benefit from it. For this

reason, we have launched a series of articles named Big Data for Big Fishes, in which

we will try explain what Big Data is and how a manager can

benefit from it. Specifically, the purpose of this article series is to

provide the readers with a definition of Big Data, make them

comfortable with it, let them gain sufficient tools to understand the

current discussions around this topic, and help them to understand

how their organizations can benefit from it.

1Big Data for Big Fishes

The analysis of Big Data can reveal a lot of information about the organizations environment.

Paradigma Quant Creativity www.paradigmaquant.com August 2015

Let us understand what Big Data is.Big Data is a concept used to describe massive data sets that

contain a lot of information about a lot of individuals or products,

and that cannot be analyzed by means of traditional software,

such as excel sheets or normal databases. Instead, to analyze

these massive data sets and to gain insights about one owns

environment, mathematical models and specialized software is

needed. These massive data sets have only started to exist

recently, due to the advances in technology that have helped

organizations to keep track of the mentioned data and to store

them in a safe manner. Moreover, the daily interaction of humans

with social networks, online stores and internet searching engines,

have fasten the data generating process. The result of this fast and now constant big

data generation is that today, organizations are (or can be) confronted with tremendous

amounts of data that can reveal valuable information about different aspects of their

activity.

Hence, we define Big Data as the combination of massive data sets that can only be

analyzed by means of algorithms and advanced statistical software, to reveal

actionable and measurable findings that contribute to a better management of an

organization.

How to generate value form Big Data.The given definition about Big Data encrypts two essential ideas. The first idea is that

the massive data sets can only be analyzed by means of advanced statistical software

and algorithms that help the data analyst to find the information hidden in the data. The

second idea is that the information hidden in the data must be translated into

actionable findings that can help managers with specific and measurable actions to

better lead and manage their organizations i.e. the discovered information is only

valuable if it translates into something actionable that managers can use for specific

actions, better product design or more efficient resource allocations.

As an example of how Big Data is helping organizations,

we could mention the insurance companies that are using

the data of associated mobile phone companies to track

the driving habits of its potential clients to optimize their

polices fees (habits such as driving during the day or the

night, exceeding the speed limits, driving a certain number

of km etc.). Another example of the value generation

through Big Data is the management of the harbor of

2Big Data for Big Fishes

Hence, we define Big Data as the combination of massive data sets that can only be analyzed by means of algorithms and advanced statistical software, to reveal actionable and measurable findings that contribute to a better management of an organization.

Paradigma Quant Creativity www.paradigmaquant.com August 2015

Hamburg, in which the storing space of materials, the routes of the containers through

the harbor, and the ship-loading process, are being optimized in a efficient way thanks to

the analysis of Big Data, incurring in high monetary savings for the harbor.

What can you take home from this introduction?

Having understood the definition of Big Data and the two basic ideas that lay behind it,

one can see that Big Data has two basic important aspects. The first, and nice aspect

about it, is the fact that thanks to Big Data and its adequate analysis, managers can

nowadays analyze a lot of information about everything that happens in their

organization and its environment. The second, but complex aspect about Big Data is

that generating valuable information from these massive data sets is a difficult task that

requires technical abilities and enough knowledge to ask the right questions and decrypt

the hidden patterns that lie in the data.

In the next article, we will deepen into the value generating process, explaining how it

actually happens, and how managers can plan and execute their first Big Data project

within their organization.

About Paradigma Quant Creativity

Paradigma Quant Creativity is a young consulting firm that combines solid quantitative

data analysis with creative approaches, to come up with pragmatic solutions to its

clients needs. !Visit: www.paradigmaquant.com

Contact: info@paradigmaquant.com !Sources

- Albert Solana & Gens Roca, Big Data for Managers. Empresa Activa, Barcelona 2015.

- Google, Flu Trends 2015. Stable URL

- Parmy Orson. Facebook closes 19 Billion $ deal with WhatsApp. Forbes 2014. Stable URL

- Martin Mller. Living by the Numbers: Big Data Knows What Your Future Holds. Spiegel

2013. Stable URL

3Big Data for Big Fishes