Advertisement

Blog

Measuring the Value of ‘Big Data’ in the Supply Chain

I recently came across the term “big data” to describe the information sites such as Facebook collect from subscribers and users. It came up in a conversation regarding Internet security, and I had a mixed reaction to it. As a consumer, I am increasingly concerned about the information that is collected and recorded about me and my habits. As a business journalist, I see the value of collecting this data and, in fact, realize there is a significant dollar value attached to it.

The Wall Street Journal today reports OnStar will soon be collecting and sharing data from vehicles that contain OnStar equipment, even if the owner of the car isn't an OnStar subscriber. That data will be shared with other vehicles and with law enforcement, the company told the WSJ:

    Why is OnStar doing this? “We're looking at future services that we might introduce,” said Vijay Iyer, a public relations official with OnStar. “We want to make sure we get our vehicles and hardware ready now and be as transparent with our customers as possible before that.”

I'll give OnStar credit for the disclosure and admitting to the fact this is in large part an R&D and marketing move.

I've informally reached out to companies in the supply chain to understand the business aspect of big data. Companies are generally reluctant to discuss this because their need and use of this data are considered confidential. This is consistent with my experience in the supply chain. Distributors, in particular, collect data to share with both suppliers and customers. Suppliers receive information such as point-of-sale (POS) — customer names, and how their product is used. Suppliers can then allocate sales and engineering resources to the appropriate markets. Customers receive suppliers' product roadmaps, end-of-life plans, product specs, and lots of other stuff that help them in component selection.

Distributors also protect data, such as how much product one customer is buying or which EMS that product is shipped to. That's been SOP in the channel for as long as I can remember.

The security aspect of big data that most concerns companies is the misuse or misappropriation of the information. Hackers stealing credit card numbers is a prime example. But I see a difference between information I freely provide versus information I don't know I am sharing.

When I key in my credit card number on an online site, I know the risks. What I don't know is whether my buying habits are being scrutinized (they are), who or what is scrutinizing them, what it is being used for, and what the result may be. (Usually it is an email trying to sell me something.) I understand I can opt out of a lot of things, my PC and network have tools I can use, there are policy and practice guidelines on every service I buy or subscribe to, and there are numerous ways to protect myself. I'm not even going to get into a debate of whether this is right or wrong: it is what it is.

Here's my question to the industry: anecdotes, research, and reports tell us that customers want “ease of use.” To me, that includes skipping through the pages and pages of disclosure forms and privacy statements that come up every time the iStore changes something, Adobe wants me to update my software, or I subscribe to a service.

To the purchasing audience: Are you concerned about the issue of big data every time a PO goes out? To suppliers and distributors: Do your customers know every bit of information you retain from them? And to sales and marketing people: How useful is this information, and how do you measure the value? I think we could have a great discussion about this and collect — for all to see — a lot of great information.

13 comments on “Measuring the Value of ‘Big Data’ in the Supply Chain

  1. AnalyzeThis
    September 21, 2011

    … so I'll just focus on the, “Do your customers know every bit of information you retain from them?” query.

    My answer would be, “no, of course not!” And I think it would be rare indeed to find very many sophisticated, technology-focused businesses that could honestly answer “Yes” to this question.

    Now all that being said, even if you did provide very easy-to-use and detailed opt-out instructions and information collection notifications, that doesn't guarantee that costumers would truly know that we're collecting information from them. It's very easy to just gloss over these types of things. For example, it's insanely common for people to just automatically accept the terms and conditions of anything they do online blindly, without even glancing at what those T&C's entail. I know I'm guilty of that myself!

    But I do agree: clearly there is consumer demand for easy-to-use privacy and data control. And I think implementation of such policies would not be as harmful to the business as many may think, because I'm convinced — if they trust your company — the majority of users honestly do not care very much about these issues (as long as the data collected is not used to annoy them later, or intensely personal).

    Anyhow, it'll be interesting to see where this discussion leads. Like you said, I think it's best if we avoid the ethical  debate of whether it is right/wrong to collect such information, however.

  2. SunitaT
    September 21, 2011

    But I see a difference between information I freely provide versus information I don't know I am sharing.

    @Barbara, I agree with your opinion. But I am not sure if companies would be willing to share the info how they are going to use the data they are collecting. So I guess the best way for the customer is to avoid sharing the data which he thinks is risky to share.

  3. Barbara Jorgensen
    September 21, 2011

    Dear readers: I just received this directly from OnStar regarding their data policy. I look forward to further discussion on the topic.

    OnStar Statement Re:

    New Terms & Conditions

     

     

    The following statement can be attributed to Joanne Finnorn, Vice President, Subscriber Services”

     

    “OnStar has and always will give our customers the choice in how we use their data. We’ve also been very open with our customers about changes in services and privacy terms.

     

    “Under our new Terms and Conditions, when a customer cancels service, we have informed customers that OnStar will maintain a two-way connection to their vehicle

    unless they ask us not to do so. In the future, this connection may provide us with the capability to alert vehicle occupants about severe weather conditions such as

    tornado warnings or mandatory evacuations. Another benefit for keeping this connection “open” could be to provide vehicle owners with any updated warranty data or recall issues. 

     

    “Of course, if the customer requests us to turn off the two-way connection, we will do as we have always done, and that is honor customers’ requests.

    “Our guiding practices regarding sharing our subscribers’ personal information have not changed. We are always very specific about with whom we share customers’

    personal information, and how they will use it. We have never sold any personally identifiable information to any third party.

     

    “Keeping the two-way connection open will also allow OnStar to capture general vehicle information that could be used in future product development.

    “We apologize for creating any confusion about our Terms and Conditions. We want to make sure we are as clear with our customers as possible, but it’s

    apparent that we have failed to do this. As always, we are listening to our subscribers’ feedback and we will continue to be open to their suggestions and concerns.”

     

     

  4. Ryan for OnStar
    September 21, 2011

    Hi, I'm with the OnStar team.

    In addition to the statement you posted here we put together a video to be clear and transparent regarding our business practices.

    http://bit.ly/onstarTandC

     

  5. Daniel
    September 22, 2011

    Barbara, pre market study before launching the product is a common phenomenon in market. But I think most of the pre market studies are conducting by third party agencies and they are selling the samples and data’s to product based companies. This may help to customize the product based on customer requirement.

  6. prabhakar_deosthali
    September 22, 2011

    As long as the BIG DATA provides answerrs to the question “how many” and not “who”,  it should be left to the companies how they use that data . The companies supplying the Data should convert it to annonymous form so that there is no breach of privacy.

     

    For product companies analysis of such data is very important to decide on the future strategies and for product marketing companies it is important to know the effectiveness of their campaigns

     

    Like in the control systems the “closed loop” systems perform better than the “open loop ” systems, same way for a consumer market to be profitable for both the produccer and the consumer , the analytics with the “BIG DATA” are important loop closers.

  7. Eldredge
    September 22, 2011

    Barbara,

          I am glad to see OnStars policy, and I hope they maintain that stance. One issue that comes up, however, (and this is not an OnStar specific issue) is that, when companies collect these types of 'big data', and find other sources of income for using that data, how loyal will they remain to the original data owner when the new use becomes lucrative? The entity that compiles the data has total control.

         Your article should yield a lot of interesting discussion – looking forward the the dialogue.

  8. Ariella
    September 22, 2011

    Thanks for the update, Barbara. It's not completely clear to me whether or not this data can and will be used against individuals in disputes with insurance companies or with the law if the individual does not say s/he objects to the connection.

  9. Houngbo_Hospice
    September 22, 2011

    @Ariella:

    It's not completely clear to me whether or not this data can and will be used against individuals in disputes with insurance companies or with the law if the individual does not say s/he objects to the connection.

    That is genuine concern. They will probably say that nothing like that will ever happen. Their Terms & Conditions state that if they ever decide to share data they would share it  anonymously , whatever that means.

  10. SunitaT
    September 23, 2011

    Like in the control systems the “closed loop” systems perform better than the “open loop ” systems, same way for a consumer market to be profitable for both the produccer and the consumer , the analytics with the “BIG DATA” are important loop closers.

    @prabhakar_deosthali  that is an intersting analogy. I agree with you customer feedback is necessary but then companies should make sure that data is held securely and that data is not misused. If customers are taken into confidence that the data they are sharing is   secure they wont mind  giving their feedback.

  11. t.alex
    September 24, 2011

    Social networking tools like Faceboom pose certain risks. Users sometimes voluntarily and simply give out infomation on their status update.

  12. Ms. Daisy
    September 25, 2011

    Barbara, I definitely share the same concerns that you expressed “I am increasingly concerned about the information that is collected and recorded about me and my habits” and have come to see the positve side of big data from some unsolicited fliers and brochures that I receive that turn out to be helpful. This must have been based on someone paying attention to my online purchases.   The new orders definitely is the dollar value attached to the data collected. I now have a better appreciation of business journalism.

  13. Tim Votapka
    September 27, 2011

    Isn't it interesting that an OnStar subscriber can have his info “out there” even after his subscription ends? That's unless he or she specifically opts out. Now the company says it won't sell or broadcast customer data. OK, fine, but how reassuring is that? Companies can reverse or amend their policies.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.