Transparency and the Information arms race

You are going to be spending proportionately more of your IT budget on security than you have previously spent or ever wanted to spend.  Why?  Because you and everyone else on this planet is engaged in the still early stages of an escalating information arms race, that, while you didn’t ask for it, neither can you avoid.  This escalation is being driven by two recent IT phenomena:  exploding connectivity and transparency.

An article in the March 2015 edition of Scientific American by Daniel Dennett, professor of cognitive science at Tufts, and Deb Roy, director of the Laboratory for Social Machines at MIT, expounds on this idea by linking it in a wonderful analogy to a hypothesis regarding the Cambrian explosion which occurred on this planet 542 million years ago.

fieldmuseumchicago_fullsize_story2The Cambrian explosion saw, in a mere geological instant, life on Earth move from single to multicellular organisms, and with it the emergence of all the varied body plans (phyla) we see today, from arthropods (lobsters) to mollusks (clams) to echinoderms (starfish) to chordates (sharks).  Prior to this, life had existed on Earth for over 3 billion years as nothing more complex than single-celled bacteria or algae, and then, in the blink of an eye over a span of only a few tens of millions of years, 34 of the 35 separate animal phyla arose from the relatively simple amoeba-like creatures of the day.  Why the sudden change?

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The new map of global manufacturing

Many factors go into your strategic global business decisions, from the physical placement of factories and distribution centers, to your choice of suppliers and partners, to your target markets and the business model itself. Businesses have a choice of fundamental global go-to-market investment strategies, from direct foreign investment on the one end, to export through distributors on the other, and a variety of joint ventures, licensing and partnerships in between, with many firms adopting the entire range depending on the maturity of their relationship to the target market. These are typically decade-long commitments to hard-to-unwind investments in not just plant, property and equipment, but talent, training, infrastructure and relationships as well.

map1

For several decades now we have operated under a simplified conception of low-wage versus high-wage countries and labor markets, typically with Latin America, Eastern Europe and most of Asia lumped into the low-wage category.

This worldview, however, is now out of date.  Would it surprise you to know that China is now roughly on par with the U.S. when it comes to total manufacturing costs, to include not just wages but productivity, energy costs and currency values as well?  That Brazil is now one of the higher cost countries, or that Mexico could be cheaper than China? Read More »

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Ye Olde information overload

There’s no such thing as information overload - there is only filter failure”.  ~ Internet scholar Clay Shirky

Information overload is not just a recent phenomenon, it entered into human experience in the middle of the 15th century with Gutenberg and his printing press, and we’ve been devising ways to cope ever since.  Today, more books are printed in a month than can be read in a lifetime.

filter 2And that’s just books – every day we create approximately 3 exabytes of data (that’s 3 million terabytes for those of you keeping score using last year’s counting system).  Every second, 3 million emails are sent, 50,000 Tweets are tweeted, and 2 hours of cat videos are uploaded. Every.  Single.  Second.  (in the time it took to read this far, you just missed 3,000 cat videos)  If you’ve only got 100 unread emails you’re still an amateur.

So how do we cope?  We do what nature does – we filter.

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Good habits for big data

Begin with the end in mind” - Habit #2 from Stephen Covey’s ‘Highly Effective People’.

thisideamustdie_brockmanThe Edge Foundation is based on the premise of: “To arrive at the edge of the world's knowledge, seek out the most complex and sophisticated minds, put them in a room together, and have them ask each other the questions they are asking themselves.”  Each year they pose to their illustrious contributors their annual “Edge Question”, after which John Brockman, editor and publisher of Edge, gathers together the various responses and publishes them in book form.  The question for 2014 was “What scientific idea is ready for retirement?”, with the replies recently published as “This Idea must Die”.

The nomination from Gary Marcus, cognitive scientist at NYU, for an idea whose time has come was ‘"big data" (Already? We hardly got to know you, big data).  Marcus' argument wasn’t that big data has become unnecessary, but that it’s quickly become a case of putting the cart before the horse.  Data has its place, but that place is AFTER you have formulated a hypothesis or theory about a problem you are trying to address.   With a theory in place, you then devise an experiment to test that hypothesis.  The most important property of the data at this stage is that it be relevant to the problem / experiment at hand, and if so, then the more the merrier.  But if not, well, as Marcus puts it, “Big data should not be the first port of call; it should be where we go once we know what we’re looking for”. Read More »

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Big Variety: The real value in Big Data

Forget about Big Volume, for my money the real value in Big Data comes from its variety.  Why? Because just as there is “Value in the Network” when it comes to your business ecosystem, your data can be "networked" for value in much the same way.

Before we dive into the business implications of Big Variety, consider this case from the natural sciences – the discovery, development and eventual acceptance of plate tectonics.   First proposed as the theory of Continental Drift by Alfred Wegener in 1912, it was not until the 1960’s that it was fully accepted based on the overwhelming data-driven evidence acquired across a wide variety of fields:

  • FossilsGeography – As early as 1596 the Dutch cartographer Abraham Ortelius noted the remarkable fit of the South American and African continents, and even suggested that “the Americas were torn away from Europe and Africa . . . by earthquakes and floods”.
  • Geology – In direct support of his theory, Wegener remarked that the locations of several unusual geologic structures could be found on matching coastlines of South America and Africa.
  • Paleontology - Snider-Pellegrini noted that the locations of certain fossil plants and animals on present-day, widely separated continents would form definite patterns (shown by the bands of colors on the above map). Wegener further highlighted the discovery of fossils of tropical plants (in the form of coal deposits) in Antarctica led to the conclusion that this frozen land previously must have been situated closer to the equator. Other mismatches of geology and climate included the occurrence of glacial deposits in present-day arid Africa.
  • Bathygraphy – Not only did post-WW II sonar reveal the extent of the Mid-Atlantic ridge circling the planet under the ocean surface, detailed analysis of the data indicated a narrow gorge precisely along the center crest of the mountain range where the plates were separating.
  • Oceanography – Seafloor mapping using magnetic instruments revealed a pattern of alternating magnetic striping on either side of the mid-ocean ridge.
  • Seismology - Earthquake-recording instruments enabled scientists to learn that earthquakes tend to be concentrated in along the oceanic trenches and spreading ridges.

It took putting all this data from these disparate fields together to develop a plausible mechanism for what came to be known as plate tectonics and thus finally vindicating Wegener.  Big Variety preceded Big Volume by half a century. Read More »

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Relationship status - Connected; Analytics for Agency

“When it comes to the Internet of Things, the future clearly belongs to the Things”. I made this brash statement in a previous post (“Cloud encounters of the Fifth Kind”) referring to machine-to-machine (M2M) being the fastest growing component of non-human traffic on the Web. I say “brash” because that sweeping generalization overlooked one other factor – the human factor.

always-connectedbFor those on the technology / data / IT / manufacturing / device side of the IoT, the conversation is in fact typically about the THINGS.  My colleagues from the services, financial, media, telecom, retail and health care sectors, however, largely couldn’t care less about such THINGS - what’s important to them is the Customer.  From their perspective it’s not primarily about smart devices or connected cars – it’s the connected customer/consumer that matters.

What does the connected consumer want out of being connected?  Read More »

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Charles (Dickens and Darwin) and continuous improvement

Whales"You show me a successful complex system, and I will show you a system that has evolved through trial and error."  ~ Tim Harford

TED Talk link:  http://www.ted.com/talks/tim_harford

 

 

Karl Marx died thinking that the first communist revolution would occur in Great Britain, driven by the long hours and unsafe / unhealthy conditions in the factories, and the rampant urban squalor and poverty so memorably illustrated by Charles Dickens.  Pre-industrial, agrarian, peasant Russia would never have even made his list of potential candidates.

With hindsight and a more robust economic theory to guide us, it seems pretty clear now that pre-War England was economically complex beyond the point of no return for anyone to have seriously entertained installing a centrally-controlled economy, and probably had been so for more than a century, ever since Robert Walpole, Great Britain’s first Prime Minister, single-handedly invented the modern state financial system.

On the other hand, his megalomanic psychopathology aside, it’s easy to see how Stalin, with no history of having lived or worked within a developed, industrial economy, could have imagined it entirely possible to centrally control his newly/barely industrialized, still largely agrarian post-War economy, hence his succession of failed five-year plans.

The same can likely be said for the large, modern corporation – that it too is largely past the point of no return when it comes to centralized control.  I made a point in this previous post (“Metrics for the Subconscious Organization”) that your business “functions day-after-day, minute-by-minute, without your active control or even your conscious knowledge – this is an organization that has long since learned what to do and pretty much runs itself.”

How does a large commercial organization manage to coordinate itself so well? Read More »

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Creating value on the IoT – It ain’t about you

The Internet of Things is going to be driven by innovative business models as much as by innovative technology.  In order to ground the following discussion, I found it helpful to create this visual depiction of the IoT that defines and distinguishes the key elements that enter into these business models.  My simplified definition includes these six elements:

  1. The network backbone
  2. A server
  3. Smart devices, which I define as configurable, IP addressable devices permitting two-way communication
  4. Sensors, which although IP addressable, are not significantly configurable and allow for only one-way traffic back to the server
  5. That data generated by these elements which travels over the network
  6. Third party / cloud connections to the network; in other words - everything else

IoT2

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Diagnosis: Your data is not “normal”

“Let’s assume a normal distribution …”  Ugh!  That was your first mistake.  Why do we make this assumption?  It can’t be because we want to be able to mentally compute standard deviations, because we can’t and don’t it that way in practice.  No, we assume a normal distribution to simplify our decision making process – with it we can pretend to ignore the outliers and extremes, we can pretend that nothing significant happens very far from the mean.

Big mistake.

There are well over a hundred different statistical distributions other than “normal” available to characterize your data.  Let’s look at a few of those other major categories that describe much of the physical, biological, economic, social and psychological data that we may encounter as part of our business decision and management process.

Risk%20mgmtThe big one when it comes to its business impact is what is commonly known as the “fat tail” (or sometimes, “long tail”).  These are Nassim Taleb’s “Black Swans”.  In the real world, unlikely events don’t necessarily tail off quickly to a near-zero probability, but remain significant even in the extreme, and as Taleb points out, become not just likely over the longer term, but practically inevitable.  It is these fat tail events that leave us scratching our heads when our 95% confident plans go awry. Read More »

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Transformations – Personal and organizational

A new year, and with it comes reflection and resolutions.  While few resolutions are actually kept, change comes anyhow.

freytag2I was reminded recently of a conversation I once had with a high school classmate who I had hardly seen since graduation.  We were discussing a third person, and my friend’s comment to me was: “I didn’t know him very well.  And for that matter, I can’t say I know you very well now, either.”  She was of course making the point that, with time, we all change.

And thank goodness is all I can say. Read More »

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