Big data is often seen as an opportunity for business development and growth. However, in one survey, executives at the world's major companies also see data mining and analytics, aka "big data," as one of the leading threats to their business models as well.
These observations come from a new survey of 300 executives released by Deloitte, which looked at how they are handling strategic risks, and what those risks are. There has been some evolution of perceived risk factors over the years, as the economy changes. Back in 2010, brand and economic trends were identified by senior executives as their leading strategic risks, but they are less so now.
When asked which technology enablers or disruptors they believe may threaten their business model, 47 percent cite social media, and 44 percent list “data mining and analytics.” In response, almost all executives in the survey, 91%, say they have changed their business strategies since the emergence of these new ways of doing business.
Why is social media see as a strategic risk? The biggest fear is damage to corporate reputation that may arise as a corporate gaffe, revelation or bad product review makes its way across the networks. “The time it takes for damaging news to spread is quicker, it goes to a wider audience more easily, and the record of it is stored digitally for longer," says Henry Ristuccia, Deloitte's global leader of governance, risk and compliance.
Companies identified data mining and analytics, normally seen as beneficial to a business, as the second most concerning technology threat. “Some may find it surprising to see analytics and ‘Big Data’ in this list. Companies recognize the potential of this data, but appear concerned about how to grasp it properly. The key question is how to examine the data to find meaningful and relevant takeaways for business strategy,” says Ristuccia.
Or, it could be that many business leaders don't quite understand big data and how it relates to the business. All the discussions about unstructured files, Hadoop, data modeling, and quantitative and statistical analysis may be making many executives squeamish.
Additional risk areas on the rise include mobile applications (40%), cloud computing (38%) and cyber attacks (36%).