By Luiz Flavio Autran Monteiro Gomes
The continuous growth in volumes of data flowing in
service and communication networks means that many areas—such as exploration of
energy sources, earth science, and genetic research, among others—will be
significantly impacted by the need for new ways to deal with very large volumes
of information. At present only one in five companies in Latin America has
immediate plans to invest in technologies oriented toward Big Data. But the
rate of new public and private investments to support the mining of very large
amounts of data is expected to increase annually at nearly 14 percent (BT
Brasil 2012).
In the following sections I review the status of Big
Data developments and needs in two of Latin America’s largest economies, Brazil
and Mexico, as well as selected other countries in the region. Factors at play
include government and private sector involvement, culture (national or
organizational), awareness of Big Data, and skill levels and interest. I
conclude with suggestions for an agenda to support the development of a Big
Data strategy in Latin America.
Brazil
Brazil provides a good example of recent technological growth:
the Brazilian market for hardware, software, and services is expected to move
from $285 million in 2013 to $1 billion in 2017. According to a forecast by IDC
Brazil, investments in software should correspond to one third of that value,
whereas the Brazilian market for Big Data has grown 46 percent a year since
2012.2 The fact is that the
country’s market for Big Data is already much bigger than for security
software.
The government is the fifth largest sector when it
comes to investments in Big Data (behind finance, telecommunications,
manufacturing, and commerce), planning for the use of Big Data in education,
procurement, and health services management, to name just a few areas. In the
state of Minas Geraes, for instance, Big Data analytics has been applied to
citizen involvement in setting priorities for public decision making, and this
trend toward e-democracy is spreading in other Brazilian states.
Besides government, a number of private companies are
using Big Data analytics in Brazil. A global survey conducted by IBM and the
Saïd Business School at the University of Oxford found that 51 percent of 65
companies surveyed in Brazil are planning to use Big Data analytics, and
another 24 percent are already implementing pilot projects (Fox et al. 2013).
One of the largest private banks in Brazil, Itau Bank, was a pioneer in the use
of Big Data analytics in the country; other well-known companies that use Big
Data are Buscapé (e-commerce) and Votorantin (cement).
Yet many doubts still exist about the value added of
Big Data–related business solutions for companies. Of Brazilian executives
interviewed at 65 companies, 22 percent consider that Big Data implies an
enrichment of analysis, and 19 percent think of Big Data in terms of real-time
information acquisition (Baguete Diário 2013). The same survey also revealed a
significant increase in the number of executives in Brazil who perceive the
practical benefits of Big Data analytics in terms of enabling competitive
advantages for their firms. Finally, the results showed a very important
increase in the number of firms in Brazil that have actually achieved a
competitive advantage in the last two years by using Big Data analytics.
A joint study by the Brazilian Institute of Market
Intelligence and the Brazilian E-business Association yielded the following
findings: about 65 percent of the marketing sector in Brazil is definitely
looking forward to widespread use of Big Data, and in the IT sector the growth
of Big Data analytics has been about 16 percent. The study surveyed 326
companies in different areas of the Brazilian economy. Among the IT
professionals interviewed, 58 percent declared that they had knowledge about
Big Data, 35 percent had heard about it but had no knowledge, and 7 percent had
never heard of it. Among marketing professionals, 42 percent knew about Big
Data, 35 percent had heard of it, and 23 percent had never heard of it (Scussel
2013).
There is still a long way to go when it comes to
disseminating the use of Big Data in Brazil, although this country is probably
ahead of most others in Latin America. National seminars, conferences, and
panel discussions are organized for business executives as well as IT experts.
And university programs in Brazil have a growing number of research projects on
Big Data analytics in fields such as computer science, engineering, and
business administration.
Mexico
Big Data analytics has a high potential to take off in
Mexico. Like other Latin American countries, it has a well-developed university
system, so availability of skilled human resources to work with Big Data will
likely not be a problem in this country.
A recent EMC survey of 254 IT decision makers produced
the following results: 92 percent of them recognized that Big Data could help
them in making better decisions, 69 percent believed that it will be a key
factor in determining “winners” and “losers” in industry, and 47 percent
declared that they had already achieved competitive advantage as a result of
Big Data analytics (EMC 2013). However, 27 percent said they did not have plans
to use Big Data in their workplace.
The main inhibitors to adoption of Big Data analytics
in Mexico seem to be lack of adequate knowledge in an organization (19
percent), lack of clear evidence of success or proven return on investment (19
percent), and the fact that organizational culture may not be prepared for Big
Data (17 percent) (Computerworld Mexico 2013).
Argentina, Chile, Colombia, and Peru
Argentina has had for decades one of the highest
levels of educational development in Latin America, but there is a general lack
of knowledge about Big Data at Argentinean companies. A recent survey of firms
in Argentina revealed that 80 percent of them had no real data strategy in
2013, and only about 15 percent could be considered as having developed some
type of Big Data analytics (Destefanis 2013).
Companies in both Chile and Peru practice data
warehousing, but not Big Data analytics. Although expertise in data analysis
exists in these countries, most companies seem to be more concerned with
producing profit through internal projects of data warehousing and information
management than really using Big Data. However, there are important initiatives
under way. For example, Teradata implemented its first Big Data projects for
analyzing international information in both Chile and Peru at the beginning of
2014, to support solutions in either the retail or banking sector (Rogers
2013).
Other countries in Latin America are still a little
behind in their first steps in Big Data. In Colombia, for example, a recent
survey of 183 IT managers found that 92 percent of them believe that Big Data can
improve organizational decision making, but only 33 percent seem to believe
that Big Data analytics can lead to competitive advantages, and 42 percent
declared that they had no plans to use Big Data analytics. They stated that, in
their view, intuition and experience are the most important factors behind good
business decision making. In other words, the country seems not to have a
culture that supports the use of Big Data yet. This was in fact confirmed by 73
percent of the managers interviewed. Unfortunately, 80 percent of the decision
makers also said that it is difficult for them to keep up with the latest
innovations in the field. In general, companies in Colombia are not aware that
Big Data can add significant value to their businesses (EMC 2013), although a
possible indicator of a shifting trend for Colombian businesses is Aentropico,
an international predictive analytics company with offices in Bogotá, Rio de
Janeiro, and Boston.
Conclusion: An Agenda for Big Data Development in Latin America
The countries of Latin America have a long way to go
toward using Big Data analytics. However, because many of them have high-level
human resources in IT and business administration as well as at least some
managers interested in making use of technological innovations, the countries
are ripe for developing a Latin American strategy for Big Data. To that end, it
may be helpful to outline an agenda to foster the development of this area in
the region. This agenda can build on country-specific initiatives and strengths
and should
·
National scientific and technological societies in a
very broad range of fields—not only computer science, information technology,
operations research, and statistics but also medicine, law, public
administration, education, agriculture, finance, earth science, and health
management, among others—should organize events such as symposia, forums, and
conventions on Big Data and Big Data analytics in their fields for researchers,
practitioners, educators, students, policymakers, and other interested parties.
·
Big Data companies should be invited to actively
participate in these events not only to show their products (e.g., hardware,
software, user-centric solutions) but also to present evidence of competitive
advantages.
·
University, law, and business school students should
learn more about Big Data and Big Data analytics. Their curricula should be
adapted to include topics such as user privacy and security as well as the
creation and development of business models that provide incentives for data
sharing and use.
·
Other categories of incentives to use Big Data should
be explored by national societies and professional organizations, emphasizing
the creation of startups in Big Data analytics.
Many IT professionals in Latin America are conscious
of the importance of developing their own business models (rather than copying
those of the United States) as they understand that unique opportunities are
available on their continent (Browne 2013). With government as a catalyst,
synergy between private sector development and public-private collaboration is
a model that has been working in other parts of the world (WEF 2012). It can
lead the way to a bright future for Big Data in Latin America. A call to action
is in the air.