big data lazy brain

ThrivOn Analytics Presentation at TDWI

Key to Success with

Big Data and Lazy Brain

March, 2013

Rajeev Kumar

rkumar@thrivon.com

571-228-7037

ThrivOn Services

User engagement•User engagement

platform

– Enterprise portal

– Member/patient

portal

– SharePoint

– Collaboration

– Social Media

•Document Assembly

Analytics•Business analytics

•Data Warehousing

•Master Data

Management

•Big Data, Hadoop

•Now Data

Corporate Strategy•Growth Consulting

•M&A Assessment

•Value based Management

•New Market Assessment

and Entry Support

•Customer Strategies

ThrivOn closes the decision loop with combination of research, analytics and strategy

Technology Partnerships

IBM SVP Partner: Information Management, Analytics and Big Data

Only VMware Vfabric certified partner in mid-atlantic region, Cloud, Platform as a service

Member of the Clouder Connetct partner program – Hadoop Big Data Platform

Hortonworks – Big Data Hadoop/Mapreduce partner

Agenda

• Practical insights into “Decisioning Process" • How consumers make use of analytics • Framework for ensuring impact from analytics

My effort to leverage behavioral psychology with big data analytics in practice

Body and mind

A bat and ball cost $1.10.The bat costs one dollar more than the ball.

How much does the ball cost?

Bat and ball - Do not try to solve it but listen to your intuition

10 cents

What affects our mind and hence our decisions

• Context• Halo effect• WYSIATI - Information availability bias• Priming• Framing• Anchoring• Substitution• Quest for causality• Loss aversion• Possibility and certainty effect• Behavior under desperate situations

Context

Coffee room experiment

Priming: Coffee room experiment

Information Availability

“Steve is very shy and withdrawn, invariably helpful but with little interest in people or in the world of reality. A meek

and tidy soul, he has a need for order and structure, and a passion for detail.”

Is Steve more likely to be a librarian or a farmer?

Framing: What is more re-assuring

Hospital A Hospital B

The odds of survival one month after surgery are 90%”

The mortality within one month of surgery is 10%.”

Allen Vs Ben

• Alanintelligent—industrious—impulsive—critical—stubborn—envious

• Ben envious—stubborn—critical—impulsive—industrious—intelligent

Anchoring

Sales promotion for Campbell’s soup at about 10% off the regular price.

3 days a week – Limit of 12 per person. Other days – No limit per person.

Shoppers purchased an average of 7 cans when the limit was in force, twice as many as they bought when the limit was removed

Substitution

• How happy are you these days• How many dates did you have last month

• How many dates did you have last month• How happy are you these days

When are we more likely to gamble

• Get $900 for sure or 90% chance to get $1000

• Lose $900 for sure or 90% chance to lose $1000

Possibility and certainty

Are each of the 5% increase in probability to win $1M valued equally?

– 0% to 5%– 5% to 10%– 60% to 65%– 95% to 100%

Premium for certainty

At final stages of a settlement where your lawyer suggests you have 95% chance to win $1M, a settlement company approaches you with an offer of $910K

•Will you take it or leave it?

What affects our mind and hence our decisions

• Context• Halo effect• WYSIATI - Information availability bias• Priming• Framing• Anchoring• Substitution• Quest for causality• Loss aversion• Possibility and certainty effect• Behavior under desperate situations

Can we truly benefit from big data when we make decisions?

What holds the key to achieving success with big data analytics?

Wish we had a magical wand and a spell

And the skeptics would say

From The Checklist Manifesto

1.heart rate2.respiration 3.reflex4.muscle tone5.color

ThrivOn data decisions grid

Frequently made decisions that have been pre-validated and

accepted to be “system 1 – proof”

Periodic decisions requiring insights from large data that have been pre-validated and

accepted to be “system 1-proof”

Decisions arrived at by skilled analysts based on

lots of data

Highly subjective decisions that are made in board

rooms with very little data

Big DataSmall Data

Lazy Brain

Fast Brain

ThrivOn data decisions grid

Automated real time decisioning

Rule based batch decisions

Continuous experimentation

Checklist assisted decision making

Big DataSmall Data

Lazy Brain

Fast Brain

Putting this in practice

5 Point Action items

• Culture and awareness• Analytics Competency Center• Technology infrastructure• Analytics Playbooks• Culture of experimentation

How can we protect us from ourselves

• Statistics rules• Algorithms are better (80% of the time)• Expert judgment still needed• What you see is NOT all there is• Find the answer to the right question• Psychology matters

Golden rules

• Hire great analysts– Right mix of data science and business acumen

• Educate your top brass– To make analytics “mandatory” part of decision making

• Checklist manifesto – Establish comprehensive framework to ensure avoiding

common decision pitfalls

• Put all analysts in one room (or one floor)– Break organizational barriers, improve creativity

Recap

• Human being are genetically wired to be irrational – for good reasons

• It’s no longer just about how decisions are made inside a company. Think how your customers make decisions

• Big data alone is not going to make you winner. Mesh big data with your lazy brain

Questions?

rkumar@thrivon.com

571-228-7037