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Last month's Target data breach — which left an estimated 70 million to 110 million retail customers vulnerable to credit card fraud and identity theft — has both consumers and corporations wondering whether the risks associated with Big Data might outweigh the alleged rewards. But a new report suggests that businesses might want to think twice before giving up on all Big Data has to offer.
On one hand, thoughtful analysis of data from both inside and outside a company can provide valuable insights into customer needs, buying patterns and the reputation of a company in the marketplace, according to the report, released by global nonprofit IT organization ISACA. Such knowledge, ISACA said, may even give businesses a competitive advantage and increase profitability.
On the other hand, companies that adopt Big Data analytics are taking certain technical risks, the report said. One of these risks, called "amplified technical impact," means that, because a company stores all of its data in one place to facilitate data analysis, the fallout from a data breach can be huge. The fact that Target's recent data breach affected tens of millions of consumers is a case in point.
Big Data also poses privacy concerns for consumers. For instance, if the data a company collects on individuals is overly intrusive, it might cause problems with customers and analysts, the report noted. In addition, when data are aggregated, anonymous information can sometimes become nonanonymous, which might upset customers, the report said.
Despite concerns for consumers, the rewards Big Data provides to businesses outweigh the risks, the ISACA report found.
"There are risks inherent in implementing Big Data, such as ensuring privacy laws are not breached," Norman Marks, an ISACA representative, said in a statement. "But the risk of inaction may be far greater, with a company being left behind as its competitors embrace the technique to leap ahead."
Others agree that the rewards associated with the adoption of Big Data outweigh the risks. An earlier report from ISACA that surveyed businesses and IT professionals on burgeoning tech trends for business found that nearly half of respondents (46 percent) believe that Big Data has the potential to add value to an organization.
Only 22 percent of respondents said their organizations lacked the right policies and governance to assuage privacy concerns associated with Big Data. The same percentage of respondents noted another issue with the implementation of Big Data analytics: a dearth of skilled personnel to analyze that data. Most enterprises lack in-house analysts with enough skills and training to properly assess the information gathered using Big Data techniques, the report noted. [Georgetown Professor: Big Data Means Big Job Opportunities]
These two obstacles — managing privacy issues and finding the right people to analyze collected data — are at the forefront of the ongoing discussion surrounding Big Data. Robert Stroud, a member of ISACA's Professional Influence and Advisory Committee, said that if a company fails to overcome these obstacles, it might end up with a lot of information and no way to use it.
"Before enterprises go ahead with any significant investments in Big Data analytics, they need to take a candid assessment of organizational culture and structure," Stroud said in a statement regarding the new ISACA report. "If knowledge is power, then Big Data can equal big power."
The full ISACA report is available for download on the organization's website.
Originally published on BusinessNewsDaily.