Analytics helps companies identify relationships between financial and non-financial performance across functions, operating divisions, and their supply chain to provide greater understanding of the "connectivity of information" in support of integrated thinking. Broadly speaking, big data analytics has four basic types of applications: (1) descriptive analytics16 for hindsight or understanding what happened, (2) diagnostic analytics17 for insight why and how it happened, (3) predictive analytics18 for foresight or understanding about what could happen, and (4) prescriptive analytics for understanding what should happen.19 The extent to which they create value for the business and foster integrated thinking varies (Figure 9.2). In all cases, the greater the degree to which the input is intelligent, machine-readable data, the greater the power and flexibility of the analytics will be to support integrated thinking on the part of both the company and its audience. Companies typically begin with descriptive analytics, to which they add diagnostic analytics, and ultimately predictive and prescriptive analytics, building from one application to the next as the company gains experience with this IT. Predictive and prescriptive analytics are today's big data "frontier."
FIGURE 9.2 The Four Types of Big Data Analytics
Cloud computing, in which a wide variety of business functions are performed on dispersed servers in a secure, on-demand, capacity-sharing, and scalable manner available from wherever an Internet connection exists, is an increasingly important way to perform analytics on big data. In the Gartner study, cloud computing was cited by 41% of participants as the single most popular information technology for deriving value from big data.20 Cloud computing is also regarded as one of the most effective ways of encouraging collaboration— which itself fosters integrated thinking—across functions, geographies, time zones, and organizational boundaries.21
Social media, which enables individuals to share information and communicate with each other and the company on a real-time basis, from anywhere in the world, on platforms like Linkedln, Facebook, Twitter, and Google+ is an increasingly important source of big data. Through it, companies can access the perspectives of employees and customers, which can be used in an integrated report. It can also help foster more robust integrated thinking, as humans have a natural tendency to see an issue through the lens of their knowledge and experience, often without the full context in which it resides. When people share these perspectives, all of them develop a more complete picture of the causes of outcomes they care about and what can be done to improve them.
Leveraging These Trends
There is no reason why companies and their audiences cannot use big data and analytics with cloud computing and social media to improve the creation, distribution, and consumption of integrated reports. Most simply have yet to do so—in our view, because compliance and filing requirements in a largely regulatory-driven corporate reporting world have reinforced a paper-based paradigm for decades. When the power and collaborative benefits of cloud computing are brought to bear on big data analytics' applications, using information generated from many different sources, companies can significantly improve their integrated reporting and integrated thinking.
The Gartner report cited above identified the types of data analyzed. Most common were transactions (cited by 70% of respondents), log data22 (55%), machine or sensor data (42%), emails/documents (36%), social media data (32%), free-form text (26%), geospatial data (23%), images (16%), video (9%), audio (6%), and others (12%).23 Virtually all of these types of data are or can be used in assembling an integrated report. Social media in particular offers a two-way information channel for companies; they can monitor websites to see what employees, customers, and NGOs are saying about them in order to generate data relevant to human and social and relationship capitals, as well as to communicate their integrated report to these audiences.