Large South African corporates lag far behind when it comes to the utilisation of big data analytics. This is due to a lack of understanding at an executive level of the competitive advantage big data analytics brings in enabling companies to respond to data collected in real time.
So says Adrian Wood, sales and business director for sub-Saharan Africa at Hitachi Data Systems (HDS).
According to HDS, big data analytics gives companies the ability to analyse structured and unstructured data in real time, and to make business-relevant decisions based on that analysis. Analytics would primarily be used by the likes of telecoms operators, retailers and banks, he says.
However, local research conducted by Strategy Worx on behalf of HDS suggests that while many of SA's large corporations have the hardware infrastructure in place, the CIOs within those organisations generally do not use big data analytics or systems in any substantive way.
To highlight the importance of big data analytics, Wood uses the analogy of a telecoms company releasing a new product set into the market, which encounters stiff criticism in the social media sphere. "Big data analytics would give the telecoms operator the ability to analyse social media responses in relation to the product, as well as the real-time internal data, such as the uptake of the product, the effect on the call centre, and other financial data.
"Given the siloed nature of the operations of many corporates, these are conclusions that are often only drawn several months down the line," he says.
Steven Ambrose, Strategy Worx CEO, says the research showed that, in many cases, while South African CIOs were aware of big data analytics and the trends around it internationally, they did not understand the potential impact it could have on their businesses.
"Unfortunately, CIOs and IT operations are often seen as cost centres within large corporates in South Africa, and as a result, local CIOs aren't always thinking strategically when it comes to the use of technology like big data analytics.
"Furthermore, the historical lack of competitiveness in sectors like telecoms, banking and retail, together with the lack of broadband penetration locally, means businesses have not been exposed to the full impact of their customers' responses to their products and services to the same degree that UK corporates might be," he says.
However, the customer movement within sectors like banking and telecoms is showing that consumers are switching service providers, which means competition is increasing in these sectors, and businesses need to be able to analyse trends and make decisions far faster than they have had to in the past. Real-time analysis of data is becoming a major differentiator and business resource.
Wood says it is somewhat surprising that the strategic importance of big data analytics has been missed. Large local corporates instead place importance on up-to-date data and base decisions on this data for accurate, measurable outcomes. This contrasts with the UK research, where just over half the sample interviewed make critical decisions based on old data, which is poor practice.
"Instead, large corporates locally use business intelligence systems and data specialists to analyse current structured and unstructured data. BI systems are focused on line-of-business solutions with a small amount of understanding of customer behaviour based on historical activity," he says.
As a result, Ambrose says local corporates are reactive to consumer behaviour and unable to make strategic and timeous decisions to change tack when a course of action is proving detrimental to the business.
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