Big Data ROI: a big pet peeve


I have a love-hate relationship with Twitter. I love the spontaneity of it all and the ability to connect with new folks. On the other hand, though, it's exceedingly difficult to summarize a cogent argument in only 140 characters.

Now, don't get me wrong. I don't look for arguments, especially with complete strangers. I'm not trying to make any enemies. However, in the course of my normal tweeting, I recently got into it with @SteveHuffmanCIO over Big Data and ROI. From HootSuite:

Here's the rub with Big Data: No consultant, software vendor or CXO can predict with any degree of certainty the reasonable return on investment to be gained from Big Data. This might be a tough pill for many to swallow. After all, if there's no ROI  to be expected with any business or technology "initiative," then why do it?

Simon Says: Don't Think of Big Data as an Initiative

Two responses here.

First, I argue in Too Big to Ignore that Big Data should not be considered an initiative. If done right, Big Data can change - nay, improve - the very fabric of an organization. What's the ROI of routinely making better decisions? Innovating faster? Gaining new customer and employee insights? Can that be quantified?

But let's put aside that argument for a moment. Think about the actual costs involved in making Big Data happen:

  • hiring data scientists
  • contracting consultants
  • purchasing and deploying new software and hardware

What's the expected return of deploying Hadoop, a NoSQL database or some other Big Data solution? There are just too many factors at play to expect an ROI of 14.4% - or whatever. Rare is the Big Data "project" that can precisely quantified in advance, and I shudder to think of a CEO who won't go down the Big Data road because the exact costs and benefits cannot be predicted well in advance.


What do you think about the ROI of Big Data?


About Author

Phil Simon

Author, Speaker, and Professor

Phil Simon is a keynote speaker and recognized technology expert. He is the award-winning author of eight management books, most recently Analytics: The Agile Way. His ninth will be Slack For Dummies (April, 2020, Wiley) He consults organizations on matters related to strategy, data, analytics, and technology. His contributions have appeared in The Harvard Business Review, CNN, Wired, The New York Times, and many other sites. He teaches information systems and analytics at Arizona State University's W. P. Carey School of Business.

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