<img src="https://ws.zoominfo.com/pixel/kZxG1sNctrruFoZSPoVD" width="1" height="1" style="display: none;">
Contact Us
Book A Demo
Menu
Book A Demo
Contact Us

It’s a New Year. Will 2013 be the Year of “Big Data”?

Big Data AI img

It’s said that death and taxes are the only two things we can count on in this life. The information technology industry, however, seems determined to add a third item to the list: that a new tech buzz phrase will burst on the scene every few years. At present, this term is “big data.”

Big data is hardly a new concept, but timing is everything. With the collision of social media and web content with enterprise information, the term has been redefined. I suspect that 2013 will be the year big data breaks out. Much the way cloud computing broke through in 2010 and 2011, big data has become perhaps the Big Tech Topic not only in the business and IT press, but also in the general media.

I’ve been reading and thinking a lot recently about big data and what it means for risk managers, the insurance programs they manage and the role risk managers will play in the dawning era of big data.

Mercifully, we’re still in the early days of the big data evolution. It’s not too early, however, for risk managers to start thinking about when and how they’ll board the big data train.

Let’s start with a definition of big data. I like Gartner’s one-sentence definition:

Big data in general is defined as high-volume, high-velocity, and/or high-variety information assets that require new forms of cost-effective, innovative information processing to enable enhanced decision making, insight discovery, and process optimization.

The Gartner definition focuses—rightly, I think—on the opportunities inherent in big data; however, according to the McKinsey Global Institute, big data will demand that businesses pay attention to it:

Leaders in every sector will have to grapple with the implications of big data, not just a few data-oriented managers. The increasing volume and detail of information captured by enterprises, the rise of multimedia, social media, and the Internet of Things will fuel exponential growth in data for the foreseeable future.

McKinsey’s 156-page report, entitled “Big data: The next frontier for innovation, competition, and productivity”, is one of the most comprehensive and well-regarded reports on the topic. Even doing what I call the “risk manager’s skim” (a skill unique to risk managers, who spend hours reviewing and checking policies), it is an excellent resource for anyone wanting to get up to speed on big data and how it is transforming virtually every sector of the world economy.

I should note that the McKinsey study says little directly about the impact of big data on organizational risk management and insurance programs. My frequent discussions with risk manager clients and prospects have, however, helped me to better understand their particular concerns. When these parties ask my opinion on how to get up to speed on big data, I boil the conversation down to three elements:

  • What is the single most important thing risk managers need to know about big data? To me, perhaps the most promising aspect of big data is the potential to identify and make use of the highly valuable—yet unnoticed—data that already exists within virtually every organization’s databases. This data, properly leveraged, can tell risk managers a great deal about their risk management and insurance programs, their operations, their employees and how their employees interact with each other and their customers.
     
  • What should risk managers do now? Simply spend some time thinking about the proposition that big data has come, or will come, to your organization. It may come under a different name or with a different focus, but it will land at your door some day. Therefore, begin reading up and studying now. There is no need to become an expert; however, much like Sarbanes-Oxley and enterprise risk management, big data projects depend on risk management, and you should know enough to raise your hand when you hear that the organization is pursuing big data.
     
  • What should the risk manager’s organization be doing now? The quote from the McKinsey report, cited above, makes it clear that effective big data initiatives require a true enterprise-level effort. At this point, organizations should be identifying the internal and external resources and partners who can and will help them locate, identify and extract hitherto neglected data; examine the data, both in its constituent parts and in the aggregate; identify previously unseen trends; and address those newly identified trends. I see risk management data as essential to the success of any big data project. I do not believe that risk managers the world over will be leading enterprise-wide big data efforts; rather, risk managers will be vital contributors to the enterprise project, both in terms of data and perspective.

This blog post is my first stab at collecting my thoughts and sharing them in a way that will, I hope, make big data approachable—even interesting—to risk managers.

The next time I return to this topic, I’d like to consider the crucial role data analytics plays in this story; after all, drawing more—and more relevant—insights from a big data strategy should be one of the key goals of a big data strategy.

Your comments and thoughts on this matter are appreciated!

tom wimberly

Tom Wimberly

Connect with Tom: Email | LinkedIn

RMIS Guide

Jan 16, 2013

 | Originally posted on 

Subscribe by Email