‘Big Data’ is a term often heard, yet rarely fully understood. It affects each one of us in our personal and professional lives and has informed business, political, social, and economic decision making for many years. But what is Big Data, and why is it so important for businesses to effectively harness their Big Data capabilities?
What is Big Data?
Consisting of large volumes of raw, unstructured information, such as facts and statistics, Big Data is essentially massive data sets. Typically too large to be attempted by traditional data-processing software, Big Data is most likely to be referred to for reasons of analyses and information extraction; it can be used to reveal patterns and trends, particularly with regard to human behavior. Although it comes from individual sources, the sheer volume and scale of the information being aggregated means that conclusions usually represent an anonymized data pool.
As for where Big Data comes from, the simple answer is everywhere: by 2025, it’s predicted that 463 exabytes of data will be created every single day, which is equivalent to 212,765,957 DVDs. The three primary sources of Big Data can roughly be identified as social media, business, and the Internet of Things. In short, any time an action is performed online, data is generated and can then be analyzed to provide insights and general conclusions about user behavior, the nature of the interaction, and the outcomes.
Why is Big Data important?
Businesses have already woken up to the potential Big Data holds: the number of vacancies for data scientists and analysts has more than tripled in the past five years (+231%) according to a study by the Royal Society. They explain that the cause for this increase can be found all around us.
“From transport to banking to shopping, everyday activities are increasingly leaving digital footprints that are transforming the world of work. The pervasiveness of data is rewriting the rules of many professions, and employers are increasingly seeking workers who can help them make sense of it.”Dynamics of data science skills, led by Professor Andrew Blake
FREng FRS, The Royal Society
Big Data can allow businesses to understand everything from their customers to their competitors and their supply chains. Since much of business operations and sales is now either conducted online or leaves a digital trace, with the proper analysis, insights can be gained in several key areas.
The more a business knows about its clients, the better it can serve them. Whether it be a more personalized or efficient service, the identification of bottlenecks, customer pain points or spotting gaps in service provision, Big Data analysis enables companies to examine and improve each aspect of their customer journey.
US retailer Macy’s, for example, uses Big Data across its organization. Macy’s team believes that Big Data is intrinsic to the company’s customer service.
“Aggregating our customer data and achieving the 360-degree view of the customer will put macys.com at a starting point for customer-centric innovation. Once we achieve that view, we’ll be in a position to operationalize it in a way that personalizes and enriches the customer experience.”Darren Stoll, Group Vice President of Marketing Operations and Analytics, macys.com
Expected businesses benefits from Macy’s Big Data strategy are increases in sales and revenue per customer due to closer engagement, better retention, and more targeted promotions.
Improved decision making
Removing guesswork and ‘gut feelings’ from business decisions is a key benefit of Big Data. Empowering team members to make informed choices based on empirical evidence significantly lowers risk and improves the chance of success on every decision made.
Walmart has not only embraced Big Data; it has democratized it too. The company’s ‘Data Café’, a cutting-edge analytics hub, is accessible by teams from every business area. This allows the use of Big Data to speed up decision making as well as improving outcomes.
“Our goal is always to get information to our business partners as fast as we can, so they can take action and cut down the turnaround time. It is proactive and reactive analytics.”Naveen Peddamail, Senior Statistical Analyst, Walmart
Team members are encouraged to find solutions using the analytics and insights gained from the hub, resulting in raised outcome standards across the breadth of the company.
Boosting business operations
While Big Data is present across the whole spectrum of business operations and functions, two areas in particular which have been revolutionized are Human Resources and supply chain management.
In HR, Big Data can be used to analyze talent feedback, reviews, application data, team member profiles, performance, and absences, all in near real-time. This allows for in-depth workforce planning and can lower costs significantly; reduced workforce churn combined with fewer HR staff and an enhanced candidate experience effectively streamlines the recruitment and HR functions.
One of the best-known examples of Big Data revolutionizing a supply chain is Amazon. The company uses analytics to make personalized suggestions to customers, but Amazon’s use of Big Data inventory tracking is what sets it apart from its rivals; it collaborates with suppliers and manufacturers to ensure orders are fulfilled from the warehouse most local to the customer, reducing shipping costs by 10-40%.
The challenges of Big Data
Security should be the first thing on the mind of any organization interested in Big Data capabilities. The storage and processing of potentially millions of peoples’ data should be taken very seriously, particularly since hacking attempts are becoming more frequent and ever-more sophisticated. Many businesses have already fallen victim to attacks, and ending up on a rogues’ gallery of breached companies damages reputations among both suppliers and customers.
Aside from security, scale is one of the other issues frequently encountered with Big Data. The sheer volume, variety and velocity of data needed to draw accurate insights and conclusions present several problems. Firstly, how can so much information be verified? Secondly, can it be done quickly enough to present relevant, actionable insights? And thirdly, without the right people to analyze and act upon the information, is possessing and processing such a large volume data actually a hindrance?
Big Data’s usefulness is predicated upon researchers’ ability to ask the right questions and critically analyze results, but without the right people in place, conclusions can be misleading or erroneous. With our Technology and Digital Marketing & Experience practices, the Mantu brand platform provides access to data experts who can help your business transform its information systems and digital capabilities. Our Big Data specialists can provide recommendations, market analyses, and specifications, up to roll out, management and supervision of the desired solution.