A number of companies are diving in to the analysis of big data to help with their business operation decisions. Data analytics providers such as Oracle, EMC, SAP, IBM, SAS and Teradata are all targeting the smart grid as utilities enlist help to deal with the significant amounts of data that the new technology is creating.
It is becoming clear that the return on investment from analyzing and gleaning business insight from big data is outweighing the initial cost by far. However, the growth of data analytics in the utility industry has a far way to go. Oracle surveys found that in 2013, only 17% of North American utilities are “completely prepared for the influx of big data”. Although this figure is rather low, it is an improvement on the 9% result from 2012. This shows that data analytics is still up against some serious challenges. We covered this in our article Data Analytics Still Faces Obstacles.
Data tide is turning
Despite various challenges, it is evident that organizations that treat information as an asset are significantly rewarded from a budget perspective and are becoming market leaders. This is according to Gartner managing vice president Ian Bertram. He adds that while data is known today as "big data", it will become "data as usual" by as early as 2015.
Gartner also believes that by 2016, 25% of business analytics deployments will be in the form of subscription to the cloud, including the business analytics platform and software as a service. Our article Data Analytics-The Cloud Killer App for the Smart Grid discusses this development in detail.
Responsible data analytics
While businesses are starting to realize the importance of data analytics, it is important for them to understand the complexity that surrounds it.
Gartner vice president of research Frank Buytendijk warns that businesses need to understand the challenges involved with big data. He mentions that organizations must know how to get optimal value out of the data, they must employ strategies to support effective analytics, and appropriate skill sets should be employed to get the most out of the data.
It's also essential that businesses stay in control of the technology they use to analyze data because there is a very thin line to cross before a consumer’s privacy is invaded.
In addition, “easy-to-use” tools do not mean it leads to better decisions. If a company does not know how to use the results of the data correctly, it can lead to spectacular failure. Gartner predicts that by 2016, 25% of organizations using consumer data will face reputation damage due to inadequate understanding of information which can result in some serious trust issues. Consumers may be inclined to leave a utility as a result. To regain trust is not easy. It is therefore essential that things are done properly the first time around. Alain Bollack, Director of Global Power and Utilities Centre, Ernst & Young, in an Engerati webcast Creating a Customer-Centric Utility to Drive Value and Profit, discusses how to win back customer trust.
Gartner research director Lisa Kart agreed, saying that while the future of making business decisions using data is not black and white, there are benefits. It can lead to more flexibility, better results, and greater conversations, especially when there is transparency and the data is shared across a business.
Ms Kart warns, "Just don't go overboard, and make sure there's an escalation process in the case of the analysis the computer makes; make sure there's a manual override, and know when to pull the plug on technology."