Data used to full potential is the new Oil !
Rathin Vyas (ENERCO Energy)
CEO & Co-founder @ ENERCO Energy Solutions LLP | Solar Power | Renewable Consulting | Smart Manufacturing
“Data is the new oil”
- Clive Humby, UK Mathematician, 2006
I am sure you have heard this one before - No? Welcome to the digital age, you will hear this quote more frequently in the coming times than Sunny Leone, one of the most googled celebs in India in 2018 and 2019 (till August 2019), surpassing all other celebrities including Narendra Modi. (We Indians have got our priorities right, don’t we? ?? )
We are surrounded by data all around us at the click of a button. Facebook, Twitter, LinkedIn, Instagram, Whatsapp – are common apps we use on a day to day basis. Or perhaps for someone extremely enthusiastic who is active on a minute to minute basis, especially true with stock or currency traders, news reporters etc. One could wonder and ask how on earth could something so commonly available be compared to Oil? Is the quote “Data is the new oil” just a hackneyed phrase or is there something more than what meets the eye? Let’s dig deeper.
Crude Oil is a rare earth resource which puts it on a pedestal. To extract oil and to refine it to make it good to use, crude has to go through processes. Heaps of dirt and unwanted materials are removed by specialized means, tools, miners, engineers and processes. The only subtle difference between oil and data is that that for the latter you do not need to travel to the specific data rich locations – you can get it where you are, right here, right now. It is also not necessary that even if you have oil reserves you got it right as you would see towards the end of this post how an oil rich Nation is not in the best of financial health. As you would see it is not just about getting the right data it is also about putting it to the right use.
Back in 2017, IBM estimated that we are creating 2.5 quintillion bytes of data every day. A quintillion has twice the number of zeroes of that in a billion., and this was 2017. With ever-growing number of internet users, social media users, IoT projects, connected devices (smart homes, smart healthcare devices, smart factories, connected cars etc.) this number is only going to grow exponentially. We are creating data at a mind-boggling speed. All google searches, tweets, videos uploaded on youtube, facebooks posts, LinkedIn comments etc. all form a part of Big Data. Wikipedia defines Big Data as data which is beyond the processing power of commonly used software tools to capture, curate, manage and process within a tolerable elapsed time. There is a Big Data revolution happening right in front of our eyes. Majority of this data has been created recently thanks to digitization and use of new age technology devices.
“90% of present-day data has been created in the last 3 years”
- Smart Industry Conference, 2019 (Pune, India)
So now that you know data is all around us, it is a boon to know what is good and what is not. There is a lot of noise (similar to dirt or unwanted materials in case of oil) which have to be filtered out before data starts making sense. Winning (or perhaps in some cases survival) in the digital age is largely dependent on this noise filtering. On a personal level the new generation goes on digital detox as a vacation or a break from social media– to cleanse themselves as unfortunately we cannot have data analysts or scientists for personal management (Digital Detox has been a recent rising trend in September 2019 - 2nd peak since the highest in August 2016). The good news however is that Companies do have the wonderful option to take services of skilled data scientists and data analysts who can mine through enormous amounts of data and feed it to a machine to make it useful and insightful.
Did you ever wonder why do you keep seeing traveled related advertisements (like above) about flights once you search on a mobile travel app or just made a google search for the same? Or have you ever seen an advertisement of a website on Facebook when you just visited that site for the first time. Are these mere coincidences? Someone is certainly using your data and boy are they making a good use of it for themselves! This is a very simple application of data for target marketing. Technically it could be a cookie or a mobile app setting which tracks your browsing habit through a cookie or application setting. No wonder Facebook is free. Looking at it from the other side, you are giving access to your data to Facebook for free. By the way, Facebook is one of the most googled words in the USA. Talk about data privacy. Another interesting aspect - Facebook recently changed it's slogan. Could this mean Facebook could become a chargeable service? Imagine you pay to Facebook and give your data for free as well. I am logging off !
“Facebook is free, and will always be” – Slogan on FB login page in July 2010
“It’s quick and easy” – Slogan on FB login page changed in September 2019
(You read it here first ! )
Recently, I was gathering data for a customer’s IIoT Project and as part of the IIoT process study, asked the production manager about the decision-making process in the Company and it was the usual answer HiPPO – Highest Paid Person’s Opinion. In a nutshell he meant that the CEO calls the shots at all levels and well the decision could be data driven or based on his experience (opinion, gut feeling, hunch etc.) With the present data setup I could easily sense that the most of the decision was purely on opinion. Wow ! Do we really have nothing else? In the digital age we are better off making data-driven decisions at all levels. Could this “HiPPO” have been the case with Automotive Companies in India? Maybe. It makes me wonder why none of the big Automotive companies, who were on an expansion spree for capacity enhancement till 2018, could predict the imminent slowdown which was staring at us right in the face. Wish they had someone like the hedge fund manager Michael Burry from the movie “The Big Short”. Michael Burry was one of the first investors to recognize and profit from the impending subprime mortgage crisis in the USA and the movie is a true story based on him and others like him who got their data-driven predictions on the crisis. Alas not every Company could have someone like him, but every Company has access to enormous amounts of data which could be put to right use.
In the data context the quote by Einstein simply means that right data is not only important but is a basic requirement for everything to make sense. Insights from the data are far more important than the raw data itself. This is where data scientists and data analysts play a key role – similar to the skilled manpower required in our oil extraction example. Reframing our original and overly used phrase I like to put it as “Data used to full potential is the new Oil !”. A Company can benefit by massive amounts of data that it has been creating and will create in future. It can additionally rely on other reputable data sources such as market research data for better insights to improve productivity and predictability. With multitude of data-driven insights businesses are becoming more intelligent and will continue to do so. Jobs? Majority of them would become redundant or irrelevant.
Technology will replace 80% of the doctors
-Vinod Khosla in Sep 2012
Vinod Khosla is a renowned billionaire venture capitalist and he went ahead and made the above bold statement. Only time will tell if this happens or not., but in the technology world, we need to think like James Bond – “Never say, never !”. I am assuming he had access to certain data points which we don't.
Coming back to the oil example., did you know that Venezuela has the highest oil reserves even higher than Saudi Arabia. Yet the economy of Venezuela is in doldrums for the last several years. What does this imply in our data example? Drawing parallels in the data context, being one of the early adopters you might have taken the 1st step in data gathering but are you using the data right and to the full potential? Look forward to your views.