The risks and rewards of big data
BIG data is becoming critically important to all businesses – both in terms of analysing internal performance data to make informed decisions and in understanding who the customer is and what they want.
The collection of customer data started in 1995 with Tesco’s Clubcard and has since evolved into the mining of that data to further improve and personalise the customer experience. But with the ownership of a customer’s personal data comes responsibility.
“From a security point of view in the digital age, there is nothing that will destroy a brand more quickly than a lack of security,” says Cain.
“People rely on Amazon and Paypal – they have all our information. That provides a seamless customer experience but it would only take one breach of security and we would all very quickly think twice about that.”
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He says businesses across all sectors are talking to KPMG about securing their data and that, following recent high profile cases in the news – most notably TalkTalk, it is suddenly on the board agenda more than ever.
“There are those that have had a bad experience and are shutting the door once the horse has bolted. But more and more are talking to us because they don’t understand what they need to do in this space. They know that they don’t know and want us to work with them to identify what they should put in place,” he says.
For many businesses investment in technology has until now been about
helping to cut costs and drive efficiencies whereas Peter McLintock, partner at Mills & Reeve, says that in the last year businesses have at last been saying ‘I need to grow’.
He says: “In the Midlands technology is driving a surge in advanced engineering and manufacturing techniques. It is an important part of how the economy is readapting and becoming less reliant on the service industry.”
He gives the example of a scrap metal client, which implodes metal objects using machines called fragmentisers which sorts the component metals and parts into different skips.
“It means the scrap can be sold at raw material price and there is hardly any waste. Technology is changing how things are done,” he says.
Yet it can be hard to know what the right investment is in order to garner growth; what will work and ultimately drive the business forward?
A new technology is not always proven, particularly if it is truly innovative – but that is how breakthroughs occur and new markets are found.
“There are a lot of new ways of doing things that will be adopted in the near future – there are surges because a lot of things are held back – take the technology on a smart phone, that is held back by
battery power,” says McLintock.
A technology investment should have a clear goal in mind that is clearly linked to the overall strategic goals of the business.
“Do you want first mover advantage or is it better to be a follower?” asks Cain. “My perspective is to think ultimately about what it is you are trying to achieve and then look at what technology can do to assist with that.”
When it comes to selling a business though, those that have adopted a new technology quickly have a very good chance of attracting tomorrow’s price today.
McLintock concludes: “From a deals point of view, other businesses will pay a price for a business with advanced technologies because they see that they can take that technology into their own business – it becomes a strategic acquisition, not a nice to have.”
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