August 6, 2013

On value, hype and zettabytes: A big data Q&A with Professor Tom Davenport

by Director, Public Relations, Amadeus North America

tom davenportWeeks after the launch of “At The Big Data Crossroads: Toward A Smarter Travel Experience,” the Amadeus-sponsored report has garnered thousands of download requests as well as significant media coverage.

So I sat down post-launch with the report’s author, Professor Tom Davenport, Visiting Professor of Analytics, Harvard University, for some additional insights on what continues to be the much-discussed, often-hyped topic that is big data.

1. What finding surprised you most while working on the Amadeus-sponsored report?

I was surprised at how long it is taking for airlines, hotels and other industry players to put together all the information about customers into a comprehensive view. I was impressed by a British Airways project called “Know Me” that is addressed at compiling and acting on diverse customer information. But I haven’t heard of similar projects at other organizations, and this type of application is at the heart of the customer experience.

2. Compared to other industries, where do you think the travel industry ranks when it comes to embracing big data?

The travel industry — at least outside of the online travel agency and travel data components, which are pretty sophisticated — is not in the lead overall. For the most part, it is behind retail and financial services. Their big data projects are more numerous and further down the road toward implementation. The travel industry is probably ahead of, or at least even with, some other consumer-oriented industries such as telecommunications. Telecom is another industry that has a lot of information about its customers, but hasn’t historically done a lot with it to improve the customer experience.

3. What is unique about the travel industry, versus other industries, when it comes to big data?

It is perhaps more fragmented than other industries. When you think about the fact that most long-distance journeys from one place to another involve multiple modes of transport — you have to get to and from the airport when flying, for example — one would hope for the ability to coordinate travel information across these fragmented components. But we don’t have information standards or formats that would allow that yet. There is more coordinated information across transport modes for a package than there is for a passenger.

4. What do you think is the most misunderstood aspect of big data?

Its relative novelty is misunderstood in a couple of ways. Some argue that it’s completely new and revolutionary. The more skeptical say that it’s been around for a long time and it’s all hype. It is true that in several industries, including travel, we have had massive quantities of data for a long time. But I think there are also some important new types of big data — from social media, sensors, voice and images, and the Internet in general. That at least makes it an important evolutionary change for the travel industry, and one that companies need to address if they’re going to be successful. There is of course a lot of hype, but I think at least some of it is justified — there is an enormous opportunity for business value here.

5. What statistic about big data do you think is the most mind-blowing for people when they hear it?

A couple of very sobering factoids (from an IDC study last year) are that the world used over 2.8 zettabytes of data (that’s 2.8 trillion gigabytes) in 2012, but only half of one percent of that data is analyzed in any way. That suggests that we have a huge task ahead of us to start analyzing the data and getting value from it. Not all of it will be useful — the study estimates about 25 percent has potential value — but whatever the number, we are only scratching the surface of what’s possible.

6. Do you have to be a big company with deep pockets to benefit from big data?

The good news is that big data doesn’t have to be expensive. The data is inexpensive or even free in many cases, since a lot can be scraped from the Internet or existing customer relationship systems. The software is primarily open-source. The hardware is usually a cluster of commodity servers. The only thing that is expensive and rare is the human skills to wrestle with and analyze the data. The good news there is that many universities are beginning to churn out graduates with these skills, so there won’t be a shortage for too long. Finally, in smaller businesses what is often also lacking is the imagination and desire to create big data projects. That has been their greatest handicap.

7. What type of jobs do you think will be created in the travel industry because of big data?

There will be a large number of “data scientist” roles of various types — some with a very high level of computational skills, some with high analytical skills, and some with the ability to translate it all into business opportunities. You would like to have all these skills in one person, but I don’t think that it’s likely. The best you can hope for is a team of data science-oriented people who all respect each other and work together.

8. What do you think is the most critical takeaway for the future that the travel industry needs to know regarding big data?

The two big problems are a) getting the right people to do the work; and b) developing an understanding of the opportunity by senior executives and decision-makers. You will probably have to start with the second problem in order to justify recruiting and hiring people. So, therefore, I would have to say that educating senior managers about big data is the most critical task. That was really what we were trying to do with this research study and report, so I hope it helps!

More on big data from Amadeus

1. Understanding the big data crossroads
2. At the Big Data Crossroads: new report available for download
3. Hervé Couturier discusses our recent big data report

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