Eldon-Online

"Big Data" - Big Help or Big Problem?

You just cannot be in business today without hearing the term "Big Data". Mind you, I blame the management consultants for producing yet another snazzy buzz phrase to tease their clients. To be clear, I am not against buzzwords just as long as they are relevant and convey the appropriate meaning. The "C-Suite", for example is pretty reasonable shorthand for the senior people in a company whose titles start with the letter "C" - Chairman, CEO, CFO, COO and so on. But this "Big Data" is leaving me somewhat cold by its ambiguity, and the real problem is that it has hit the C-Suite.

I heard a Chief Executive recently talking about the fact that he would in future have all the management information his company needed because they had embraced the idea of big data. He could save huge amounts of money because he would no longer need hordes of people like analysts in his back office, nor would he need to employ expensive management consultants. And because he had so much information he would be miles ahead of those companies that didn't understand big data. He was quite affronted when I suggested that big data might not be quite as much of a panacea as he was obviously thinking - and I spent the next 30 minutes discussing with him the merits - and otherwise, from my perspective! I hope I at least persuaded him that he might want to be asking quite a few more questions before he embraced it any further.

Don't get me wrong. I truly think that big data can be of enormous help to businesses - as long as it is understood and, even more importantly in my view, then used properly!

There are of course many people who know what big data is all about, (particularly at the working level) but for the less technically or business minded readers of my blog, let me just try an explanation. 

Simply put, imagine the biggest reference library you have ever seen or can imagine, and multiply the size by at least ten times. Big data is like that. It is a collection of data so large that it becomes difficult to find what you are looking for by using traditional methods of database management. As a result, work that was previously being done by using analysts is now being handled through creating a series of algorithms that "interrogate" the data and spew out the information you need. Or you think you need. This, for the business community, could be used to spot business trends, seek out inefficiencies, and provide clues to current customer behaviour - leading perhaps to future trends (of course only as long as the conditions existing today remain unchanged!) Sounds good, doesn't it? And it is a big help.

So far, so good - but with the huge mass of information you are receiving who handles it, who "interrogates it", and who is then responsible for creating company strategy?

But there are a few basic things to remember here. Firstly, is all the information you think you need actually necessary to make some decisions, or are you just accumulating information that is of little real value? Secondly, who is creating the algorithms to interrogate the big data to provide the results? Until computers can think for themselves (and yes, I know it's coming), you will still need people to create the right algorithms. People who know the business, and therefore have the ability to ask the right "questions" Remember that old saying from Economics Nobel Prize Laureate, Ronald Coase (who by the way is 102 years old), who said "Torture the data, and it will confess to anything!" Quite!

From my point of view it is surely valid for consultants to be pushing big data as a concept to companies, but there is probably a better case to be made for those consultants who can successfully help in the creation of appropriate algorithms, in other words creating the right questions, and the subsequent interpretation of the answers. Heaven help many Boards of Directors if they are left to understand this stuff on their own. And yes - that includes me!

While we live in an increasingly technologically driven world, the users of that technology still only operate with human brains - which frankly have their limitations. So until we catch up, corporations need to realise that big data aside, much of the "little data" they have is still sufficiently powerful to enable them to do a better job for their clients, and therefore their businesses, than they are doing at present.

As one of my sons pointed out in a comment recently, how is it that a financial institution with whom he has had a relationship for 30 years still addresses him by mail as "Dear Valued Customer". They will have enough clues to realise that he is now married, since he has a joint account, should have an idea that he has children as they have accounts of their own, and with this should know - and be able to customise easily, suitable offers to him. We have the capability to do all this stuff today on "little data". 

Other organisations do it - witness the slightly embarrassing story that came out of US retailer Target. (Do have a read - it's worth it, and it provides a lesson in what you can do today!)

So before we get hung up on big data, make a start by using more effectively the "little data" you already have.

But as for "Big Data"? - Sure, go for it and use it successfully but make darn sure those people in the Boardroom know what it's all about if they are being asked to commit millions of shareholder money in whatever currency into technology that might pay off - but might not if you don't use it properly! 

You've Heard Of The Three "R's"? ... Read On

What does the phrase "the 3Rs" mean to you? Chances are, depending on your age, you will recognise it as relating to a comment coined in the late 1700s, when Sir William Curtis referred to them as: Reading, Writing and Arithmetic. (No, I was not around at the time before you ask!). But even if you didn't know the phrase before, I am sure you will have picked up the irony of the fact that they don't all start with an "R". But they sound as if they do!  Nearly. 

So, moving swiftly to the 21st Century, I have an alternative version - not of "R"s, but "U"s - although sadly two of them do start with the letter "U" - but then we're not all perfect.

I refer to Unemployment, University and You.

First of all, what I am about to write is less likely to appear as an issue in Asia for some time to come, but then who knows..., particularly if unemployment becomes a more serious matter than it is already. The pressure on educating children in Asia has become quite obsessive and stressful to both children and parents, all in the hope that a great education, as long as you get into the right university in some countries, will lead to the best jobs. That is, as long as there are sufficient jobs to go round. But if not, then what happens?

Let me try and make some sense out of where my line of thinking is going. Succinctly.

In case you think I am having a go at universities in particular, but education in general, let me state categorically that education first and foremost is essential. A well educated world, starting with the children, are generally less likely to be proponents of war. If we neglect our duties to educate everyone, boys and girls, every race religion, beliefs, and colour, we are setting a bonfire that someone will light at some stage in the future.This is something acknowledged by a variety of leaders, many of them presiding over poorer countries or at least living in their shadow. Although this will take a long time, generations indeed, to achieve, it must nevertheless be undertaken.

In this Blog, though I am dealing with something more immediate. I am focused for the present on well-educated children who are joining a real world where there is a lack of jobs, and a growing phenomenon in the West by some potential University entrants to try and beat the system. 

Simplistically, you earn good grades to secure a good University place. You work hard for three or four years to come out with a good degree. But you emerge into a market where jobs are hard to come by - and you have a pile of debt.

 

Unemployment in developed and developing economies is not a new phenomenon, but in many places it is too high and is stubbornly refusing to come down significantly. When you add to this the increasing use of technology in many workplaces, the cost of paying people, and therefore the substitution of jobs by "robots", you have a situation that is not going to add many jobs any time soon. But please remember I am being quite general here. I am not talking about the important specialisations such as the medical profession although even that over time will surely be taken over by technology. With unemployment in the USA and the UK both over 7.5%, France and Italy over 10.5%, Spain and Greece at a staggering 27% - and others, there are no "quick fixes". Factor in the demographics of the unemployed by age and you have a good number of young people making up a large percentage of the numbers.

So you come to the question of how are people getting round it. Easy. They are opting not to go to University!!

Now, if you speak to many people especially in Asia such an idea is almost heresy. (Heresy, as in any belief or theory that is strongly at variance with established beliefs or customs). And some Western friends are also somewhat sceptical that opting out of University is likely to work, but here's the thinking.

If you work hard at school and get good results, to the extent that you would have been offered a place at a decent University, you opt instead to go look for a suitable employer and immediately enter the work force. If you are lucky enough to find an employer of course. And heer we are back to the old system of learning on the job. You start the process of taking any relevant professional exams which, given a fair wind you should complete in 3 years. Then, when your peer group graduate from University straining under the burden of having to repay a large student loan and apply with the thousands of other graduates at the same time to your company for a job - guess what? They already have on their payroll a trained, qualified, bright committed employee (who is doubly happy because they have no debt!) Possible? Why not?

If employers get creative and open their doors to potential advancement for early joiners - rather than only fast-tracking University graduates - then I see the potential.

So, what is the You part of this? Well it can be you as in the potential University entrant trying to decide on a pre-emptive course of action to avoid the debt and unemployment trap, or it could be you as in a potential employer looking for talent early on in the workplace and not believing that only University graduates are the ones who can do a better job because they are supposed to be intellectually superior - or some such nonsense. 

Mind you, as someone who left school at the age of 16 I suppose I might be slightly biased, and I used to feel a little disingenuous when trying to convince all my children they needed degrees to even get an interview!!

And You relates to every one of "us" really who is in a position to be open-minded about such a radical change, and also to do your bit to ensure we work towards an educated world.

New on the Menu - Rat of Lamb!

Oh dear! There I was, just about to settle down to write a really exciting Blog either on why University candidates are opting out of going to Uni, or a small note on "Big Data" - the consultant's latest buzz word that is sweeping through a Boardroom somewhere near you when, hard on the heels of my last Blog about food - and China's aspirations to ensure its future food supplies from other parts of the world - along comes a tale (tail perhaps?) of skullduggery in the mainland's kitchens. 

In case you missed it, recent news reports from China have highlighted the seizure of a gang that has been selling rat, fox and mink meat in the Eastern part of China - passing it off as lamb and mutton. Now I have never knowingly eaten a "joint of rat", but I don't care how much gunk and preservative you put on it surely a rodent would have a different taste and texture from what you were expecting? I would have imagined rat to be sort of stringy, even if it was thinly sliced - and surely the purchasers or users of the raw item must have ... well, smelt a rat when they saw the meat? 

China, of course, has had a run of scandals in the last few years over food items that have been tainted. The most notorious being tainted milk. This has led to such concern in China that demand for powdered milk from places like Hong Kong and, I am told, even London has led to a restriction on the amount of powdered milk that can be bought by mainlanders in those cities to take back to China. And then there were the thousands of dead pigs floating downstream into Shanghai a month or two ago, having been dumped in the river. And there are other examples ... all of which make the United Kingdom's "horsemeat for beef" scandal look rather tame by comparison.

For the genuine storekeeper, restaurateur or whatever, don't you think they would know that a rat is a small rodent that feeds from old food and smelly bins, and carries fleas (amongst other things!)? Sheep, or more specifically lambs on the other hand, are soft and cuddly fluffy animals that mostly eat grass! If you can easily get the two mixed up then I would guess you are in the wrong business.

That said there was always the rumour being circulated amongst Westerners that Chinese people would eat anything that had its back to the sun. This neatly prohibited cannibalism because most of us walk upright. But judging by some of the things I have eaten over the years, that would not be considered totally normal to Western tastes, I think that the saying may be pretty accurate!

All of which leads me to attach a drawing courtesy of a good friend wth a gift for cartoons, and with apologies for "amending" what has become a well known saying emanating from China,

But the serious message is clearly this. In a country where the vast majority of people eat to live rather than live to eat, playing around with people's food is not clever, given the potential consequences. And when it happens too often, with different food items, and the public begins to question what the Government is doing about it to provide safeguards, and the social networks start buzzing, there is a serious risk of unrest. Weibo, the micro blogging service in China has something like 500 million registered users of which around 10% are active on a daily basis. If 50 million people start complaining, you get some idea of the impact a site like this can have, for good and bad! Really the ball is now very firmly in the Leaderhip's court, and I hope that demonstrable progress can be made to improve this situation.

I have for a long time said that I am much more concerned at the impact of social unrest in China than I am about things like the economy. And if people are afraid to eat what is put in front of them for fear it is tainted, they will get angry. And guess what comes next .....

So, maybe some ratatouille with the rat of lamb?

 

"Where The Sun Never Sets" - Under New Ownership?

You may or may not be familiar with an often quoted phrase that reads "the Empire on which the sun never sets". The phrase was attributed to a writer in 1821 who was describing the extent of the British Empire as being a nation where at least some of their interests were in daylight at any given point in time. The origins of the phrase, historically, go back much further than the 19th Century of course.  The Persian King Xerxes is said to have used a somewhat similar expression before invading the Greeks in the 3rd Century BCE. And in the modern era around the 16th and 17th centuries the phrase was applied to the Spaniards and the Portuguese. But are we about to witness a new "owner" for the phrase? China!

In this sense I do not mean that China is intent upon invading various countries around the world and imposing their rule on them, in the manner of the Europeans, but it follows a similar pattern as China searches the world for resources.

It doesn't matter which newspaper you read in whatever country, or which conference you attend on whatever subject, there is often an underlying "sameness" in the topics that are top of mind in discussions, and they reflect our world today and the future. The sort of thing that I am working with colleagues on at present as we try to look forward, and which apart from issues such as technology, demographic change and the rise of state-directed capitalism (okay, economic nationalism) also looks at the "war" for resources. And where China is concerned it is this last element, resources, that is giving rise to their possible accession to the role of being the country with interests that will be in daylight for 24 hours.

The forecasts come at you from all directions. Diets in China are changing rapidly, and as a result there is a greater demand than before for foods that would not normally have been a part of the staple diet. The demand for meat, for example, is growing rapidly meaning that water resources and feed for the cattle is needed. And in relation to cattle feed, more than 60% of the world's soya bean production is going to China. And then there is food consumption generally. Recent figures I have seen suggest that already more than 30% of global rice production, 25% of the world's corn and 50% of pork products are being exported to China.

The urbanisation of China has meant the conversion of agricultural land to use for building, resulting of course in the decline of land available to feed a growing population. No problem you say, China is a vast country and has lots of land, but only about 15% of China's land mass has been suitable for agriculture, mostly in the eastern half of the country. Even in 2008 the China Daily was reporting that arable land was barely above the critical minimum. so, with the reduction in that land, the population growth, the diminution of water supplies and a population with changing tastes for food, no wonder China is looking around the world for sustainable supplies of food.

And where are they looking? Try Africa for starters. Nations that have arable land which is underdeveloped, relatively small populations and an appetite for an infusion of development funds. Step up, China (and places like Qatar, as well).

Cooperation agreements have proliferated between China and African nations which will help China to secure food supplies for some time to come. The unknown elements that exist with these agreements include how long it will be before the African countries decide that China is taking too much of their natural resources - in this case food. Or a change of African Government decides that previous deals were "unfair" and want to renegotiate new deals. And if China has done nothing to reverse its own land shortage, and therefore has to pay up, it could be held to ransom but that's a longer term story.

Africa is not the only continent that attracts China. In Latin America, both Argentina and Brazil in particular have attracted Beijing's attention, although there is a little more scepticism about land purchases by foreigners in both countries. On that continent you find flights going to all corners  of the region carrying Mainland Chinese on a mission. People ranging from the agricultural industry to their Bankers, singlehandedly searching out the best deals.

Of course it's not just food, it's other commodities too - minerals, high grade coal and, of course, oil. Do you ever wonder why China is not so enthusiastic about intervening in Iran or Iraq? They see a resolution to these issues as being better solved by diplomatic and political means - not by war, with which actually I agree, but their main eye is on the oil. Did you know that if car ownership in China ever reached the same levels per household as America, China would consume the total global annual oil supply to run them?

Just to keep itself fed, running, and earning money China is going to need to be everywhere. As a buyer of goods including raw materials and food, as a supplier of manufactured goods and services, as tourists, as consumers of products.

They will be doing business 24/7 on some continent or other. And it's going to involve the continents of Africa, the Middle East and Latin America like never before, ultimately creating a new trading region that will potentially put the West on the sidelines.

I think the title has moved on - a bloodless coup!