On Mitnick and “Moneyball”

In an interview that touched on topics as wide-ranging as the Internet of Things, the notorious hacker Kevin Mitnick, and the recent movie Moneyball, Patrick Taylor, CEO of Oversight Systems, gave us his take on the future of Big Data analytics in the enterprise.

SAP.info: What are the main trends in the analytics space that you think will be dominant in 2012?

Patrick Taylor: The first trend is that people are really working to use Big Data to drive better decisions across the organization. And when I say ‘Big Data’ I’m actually casting a pretty wide net. Basically, it’s the idea that we now have lots of detailed, transaction-related information at our disposal. And that includes data coming from the Internet of Things, where we have a huge number of machines recording events and information.

We have all this data, and now we can analyze it at the detail level to find very specific insights that are meaningful to particular people in an organization. If we get those specific insights to the right people, then they’re in a position to make smarter decisions on behalf of the company. It’s no longer the case where people are thinking, ‘I’ve got lots of data, what has my average changed to?’ Now, we’re taking the data down to the individual, personal level, and looking at what I’ll call ‘interesting and anomalous events’ that are happening within the whole Big Data environment.

How is this kind of thinking being adopted across the organization?

I’ll give you an analogy. A few years ago, CRM was all about trying to make average sales reps better by giving them the same disciplines, process-granted views, and insights into what’s happening in an account that the best sales reps had. That same idea is now being implemented across all areas of an organization. It’s the combination of Big Data and continuous analytics – the technology that looks for those anomalous events – that will give average employees the kind of insights that only the best analysts currently have.

Why do you think people are now saying, ‘Let’s stop thinking about averages and start thinking about discrete events’? What factors led to this change in thinking?

That’s where you get the real measurable leverage from Big Data – by looking at the discrete events. A major contributing factor certainly has been the development of technological capabilities that allow people, for the first time, to actually search for and find those anomalies. Here at Oversight Systems we’re a part of that development, for sure, but in a broad sense, everyone’s ‘analysis game’ – the level of competence people have when they’re using analytics – has steadily increased. And there’s a huge emphasis on it in the market – just look at IBM. They regularly ran advertisements about smarter planning during the NFL playoff season. The data’s been available for some time, but now the emphasis is on marrying it with analytics and looking for those anomalies.

You can see this shift very clearly in the book and movie Moneyball. It wasn’t until the Oakland Athletics baseball team started managing and operating the team – their business if you will – according to discrete player-pitcher insights, and making decisions at the individual at-bat and player-level, that they started winning. It’s a very interesting example of the difference that analytics can make. When you actually put the insights to work – in this case, when you start making every decision on an individual level, not according to averages – that’s when you go on a twenty-game winning streak.

It certainly reflects the degree to which the use of Big Data and analytics has infiltrated all aspects of our society. It’s not purely in the realm of business and IT.

Yes, and we have to think about the effects of that process. According to a recent article from the McKinsey Global Institute, we’re headed for an analyst shortage – there aren’t enough people who understand how to use these analytic techniques. At Oversight, our continuous analytics platform gives companies a sort of virtual analyst. It won’t discover new insights, but it will search for the interesting events that you’ve identified and alert the designated employee to them. It’s about giving everyone in your organization the benefit of analytics without making them have to take a statistics class first.

What other Big Data trends are redefining the way organizations put analytics to use?

I think we’re at the point with Big Data now where a lot of people simply say, “So what?” They’ve heard all the impressive numbers and promises, and they just want to know how it’s going to improve their business in a concrete way. There’s one area in particular where I feel this is happening, and it has to do with the increasing success of hackers.

Enterprises count on the fact that the person logged into one of their applications as John Doe really and truly is John Doe. That certainty is disappearing as hackers are becoming increasingly adept at gaining access to internal accounts. This development is partly due to the amount of social information that is now publicly available, where any external person can see on Facebook that John Doe went to the company picnic. Then it’s as easy as sending a malicious email that says, ‘Hey John, here are some pictures from the company picnic.’ A lot of hackers are also using social engineering techniques like Kevin Mitnick did in the 1980s and 1990s. They call up John on the phone and say they’re IT and they need to verify his account number. These are old cons, but they work.

Enterprises have to let go of the blind assumption that the person logged into an application is actually who they say they are. Instead, companies need to be looking at each and every transaction from an information leakage standpoint. Did someone perform an unauthorized activity? Is there any record of anomalous behavior? You can identify such instances by analyzing each individual transaction. That’s one way Big Data analytics are already changing the way enterprises understand and prevent fraud.

What should readers take away from this discussion on Big Data?

When it comes to Big Data analytics, we tend to have conversations where we’re mostly talking about risk. But we could just as easily talk about opportunity, because Big Data is about looking for interesting anomalies, which inevitably contain both. When it comes to Big Data, you’re really looking to both control risk and seize opportunity at the same time.

About Patrick Taylor: Patrick Taylor is the president and CEO of Oversight Systems. Patrick launched Oversight in 2003 as the innovator and leader in Continuous Transaction Analytics (CTA). Today, a wide variety of business and government organizations use Oversight’s CTA software solutions to generate insight, action and competitive advantage from their ERP, CRM and other Big Data resources.