We have entered the age of big data. Big data is essential because it can transform how individual users and companies manage their businesses. For most of the 20th century, business leaders have relied on statistical significance and scientific study to determine what kind of information they can trust. Although these principles are still valuable, modern technology is making these assumptions obsolete. And because of these changes, management practices are changing with the tides of technology. It is not just a change in technology, but it also represents a structural transformation in managing business, corporations and enterprises. With information abound over the internet, Big Data is making its presence felt all over the business world. Data is now part of every sector and function in the global economy. Data is as important as hard assets and human capital, any modern economy cannot function without it and modern economic activity could not happen without it. Using big data will become the basis of competition and growth among businesses, enhancing productivity and creating significant value for the global economy by minimising waste and increasing the quality of products and different services.
The sea of death flooding the world has been a phenomenon which only excited a few in geeky individuals, but just like any other things, too much of anything will have can either result into a good thing or a bad thing. For data, it has reached its inflection point. According to McKinsey Global Institute and McKinsey & Company Business Technology Office, the sheer data volume generated, mined and stored for insights has become economically important to the government, businesses and consumers. Previous trends in IT investments and innovations and its impact on productivity shows big data can have the same power to transform everyone’s lives.
Big Data Defined
Big data can be defined as the 3 Vs:
- Volume. There are many factors that can contribute to the volume increase in data. Transaction-based data that were stored through the years, unstructured data streaming from social media, increase amounts of
sensor and machine-to-many data that are being collected. Excessive data storage was an issue during the past. But with the decreasing storage costs, there are other factor emerging like determining relevance within large data volumes and how analytics use can create value from collecting data.
- Variety. Present data come in many formats. Numeric and structured data in traditional databases, information created from LOB applications, unstructured text documents, audio, video, financial transactions and the like. Merging and managing different types of data is a thing that many organizations still struggle with.
- Velocity. Data is streaming at very fast speeds and should be dealt with accurately and in a timely manner. Sensors, RFID tags and smart metering are driving the need in dealing with tons of data in real time. Reacting swiftly in dealing with data velocity is quite a challenge for most organizations.
A Competitive Advantage
Using big data is becoming an important way for many leading organizations and businesses to compete and
outperform their peers. In most established industries, competitors and newbies to the business will leverage data-driven strategies to compete, innovate and capture the needed value. For example, in healthcare, early adopters of big data have analysed the outcomes and results of pharmaceuticals when they were widely used now prescribed, discovering its benefits and the risks that were not shown in the controlled but limited clinical trials. Others use data from sensors that were embedded in products to determine how the products are actually used in real world situations. This knowledge, then are made into factual information and results in the creation of new services and the design of future products and services.
Big data will also create growth opportunities and new categories of businesses like organisations that gather and analyse industrial data. Many companies that are at the center of large information flows where data about services and products, buyers and suppliers, consumer preference and intent can be captured, analysed and stored. Real time information and high frequency of data should also be noted. Say, the ability to estimate metrics like consumer confidence is extensive and that adds considerable power to predict consumer trends and preference. Just the same, higher frequency of data allows users to test theories in real time.
Leveraging Big Data In Your Favour
A study was made to five domains that include healthcare, United States, manufacturing, personal location data and the EU public sector. From the gathered information, there are five ways on how to leverage big data.
- Big data allows narrower segmentation of customers, thus there are more targeted and tailored products and services that will fit their needs.
- Big data can unlock significant value by making information and data transparent. At present, there is still a
large amount of information not yet captured or converted into digital form. 25% of the effort are put into searching data and then transferring them to a mother location (physical or virtual). This percentage shows inefficiency and time wasted.
- As enterprises and businesses create and store more transactional data in digital form, there is more detailed and accurate performance information on product inventories to deliveries to employee sick days. Having this information can expose any downsides or variation within the business and at the same time enhance performance. There are a number of companies that collect and analyse big data in performing controlled experiments in formulating better management decisions.
- Analytics can enhance decision making, lower the risks and expose valuable insights that can be used in improving business practices.
- Big data can also be used in developing and creating the next generation of products and services. For example, many manufacturers are using data gathered from sensors that are embedded in products in creating innovative after sales support and services that minimises product failure.
The age of big data can produce new management principles. During the early days of professional corporate management, managers, CEOs and leaders discovered that the minimum efficient scale was a key factor to be successful in the market. Future competitive benefits are likely to spread to companies that can not only capture essential and better data but also use the gathered data effectively.
One thing can be clear from all of this. Every enterprise big or small needs to fully understand how big data can help them and its many potential in levelling the market place. Start today because waiting will just delay the inevitable and make it even more difficult to correct any confusion. Once an enterprise start addressing big data, it can use the insights gathered in improving customer engagement strategies and immediately add more value to the business.