John Tate assesses the latest technological development taking the IT sector by storm.

2013 is going to be a tough year for civil society. Finance professionals continue to search for ways to boost revenue and reduce costs.

Well I have some good news for you. Technology is going to sort us all out. The Centre for Economic and Business Research produced a report last year looking at the potential of a new area of IT.

The report highlights that, by 2017, in the UK, this new technology could be responsible for:

• Annual benefits worth £40.7bn;
• Cumulative benefits which include £132bn on improved business efficiency and £21bn on business innovation;
• 58,000 new jobs created as a result of the entry to markets of new businesses; and
• Savings to the public sector of £2bn in fraud detection, and £4bn from better performance management.

Emerging technology

A few months ago, I wrote about emerging technology and alleged that the IT industry ‘over-hyped’ new ideas. I came in for a good deal of criticism from IT suppliers for this. So, recognising my cynicism, I have decided to turn over a new leaf and believe more of what the sector says.

£40.7bn per annum is a lot of money. To put it into context, the Charity Commission estimate annual income for all charities is currently running at £58bn. So £40.7bn of extra cash could do the UK an awful lot of good.

Well, what is this amazing IT development? The answer of course is the adoption of ‘big-data’ technology. Gartner, a leading firm of IT analysts, highlight this as one of the top-ten strategic technologies for 2013.

They define ‘big data’ with crispness and clarity as “highvolume, velocity-and-variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision-making”.

Put another way, ‘big data’ is a collection of large data sets from sources such as website traffic, social media and, say, retailers’ in-house systems. The IT industry is busy prompting a series of tools to help capture, collate, store, search, share and analyse this information.

Leading vendors include IBM, Oracle, Microsoft, HP and SAP. The suggestions is that when these tools are applied to large data sets they can help interpret the information and drastically improve the way organisations are run.

‘Big data’; the cloud; and tablets and mobile devices, are probably the three most-discussed IT topics on the web. So is this relevant to charities?

Interestingly, research in the last 20 years among accountants has consistently singled out poor reporting and analytics as the biggest bugbear they have with their systems. One can understand this. Reporting tools are often difficult to use and the data one wants to look at is typically held in several different, unconnected systems.

Huge strength

However, the great new thing about ‘big data’ is the potential ability of the software tools to look at huge amounts of information. And when the IT industry talks about ‘big’ it means big.

For example, Wal-Mart handles more than one million customer transactions every hour, and there are around 40 billion photos on the Facebook user base. The uninformed who speak out against investment in big-data tools argue that much can be done with existing systems to improve reporting analytics.

This includes improving the core business processes, developing the integration between your current applications, and actually learning how to use the current reporting tools you have.

However, the industry sees relevance for ‘big-data’ tools in all contexts, including among SMEs (small and medium-sized enterprises).

For example, the results of a survey carried out for SAP by Harris Interactive, reported on SiliconAngle.com, stated: “While SMEs may not know exactly what ‘big data’ is, or what it does, they most certainly understand its benefits. According to the poll, as many as 70 per cent of SME executives are expecting to see a return on their investment in big data within the next 12 months.”

Is ‘big data’ going to be relevant to charities? I need say no more.

John Tate is a business consultant, IT adviser to CFG and a visiting lecturer at Cass Business School