The explosive growth of the Internet and communication technology is making Big Data more accessible and more accurate than ever before, and it’s changing the way companies all over the world do business. In particular, Big Data is leading to higher efficiencies, customer satisfaction and profit margins, making it an important tool to know how to use. Otherwise, you’ll likely lose ground to your competitors all along the performance spectrum.
Big Data is exactly that, it’s big in its scope and applications. According to Forbes, “Big data is a collection of data from traditional and digital sources inside and outside your company that represents a source for ongoing discovery and analysis.” Whether it is information gleaned from web traffic and content sharing or an internal customer relationship management system, data impacting the trajectory of your business is more available than ever before.
Big Data can be further categorized as structured or unstructured, with the key difference between the two being the format of the data being collected. Structured data typically has a format and contains text or images, while unstructured data is typically just text aggregated in a loose, unformatted manner. For instance, website analytics that have quantitative and qualitative descriptors are considered structured data, while social media posts are generally considered unstructured data.
With Big Data, there is a world of knowledge out there waiting to be discovered, and it’s a world that can lead to ground-breaking innovations, better risk management processes and higher sales, just to mention a few benefits. The McKinsey Global Institute notes that Big Data makes information more available and transparent at higher frequencies, allowing you to perform more controlled experiments, identify process variability and make better decisions.
More specifically, Big Data can lead to analyses that are more conclusive and relevant, helping you and your management team make more accurate projections and forecasts, taking the guesswork out of strategic planning. It can also provide you with real-time data that can help you make quicker decisions, ultimately keeping you ahead of your competitors. Big Data can improve operational planning, research & analysis, quality assurance initiatives, marketing and sales; the list of potential gains are almost endless.
While you stand to gain a lot from Big Data, there are risks associated with aggregating structured and unstructured information. You can spend a lot of money collecting qualitative and quantitative data that doesn’t add value or creates a bad picture of your operating environment, resulting in wasted time and bad decisions. You can also collect unstructured data that can’t be interpreted in a meaningful way. To avoid the risks associated with Big Data, it’s important to have a plan in place and experienced professionals leading the data collection efforts.
Big Data analytics can lead to monetary gains in the form of reduced expenses, higher top-line sales and wider profit margins. In terms of operational expenses, you can identify duplication of efforts, internal and external product failures and trends in customer returns that you can correct, resulting in gains. In terms of sales, you can use Big Data analysis to identify new markets and customers to sell to all over the world. You can also analyze cost of goods sold or cost of sales, identifying data points that can help you improve both your gross and net profit margins.
The supposed benefits of Big Data are not rooted in conjecture or speculation but in the real-life success stories of companies large and small. For example, The Wall Street Journal reported on the successes of Tableau Software and how the company leveraged Big Data to its advantage. Tableau was able to take its interactive data visualization software and translate complex quantitative data into useable, cost-effective graphic reports for users in varied functional roles within businesses. The net result being better decision-making for users and multimillion dollar sales for Tableau. Avis Budget Group also leveraged Big Data to change its operating model and emerge from the financial crisis of 2009 a stronger, more efficient company. There are hundreds of success stories just like these all over the world.
Additional success stories involving Big Data include:
Weighing the costs of Big Data verses its benefits is important for a number of reasons, including controlling general and administrative expenses. The key is to identify value-added reporting processes and data points that can lead to competitive advantages. There is no reason to create aesthetically pleasing reports that say nothing substantive, and further clutter co-workers inboxes. So, performing a cost-benefit analysis and needs assessment before you access Big Data is of paramount importance. These analyses will keep you and your staff members on the right path, helping you glean as much from Big Data as practical.
Big Data is more than a buzzword. It’s a source of insight that can lead to better decision-making, higher profits and greater customer satisfaction, if you know how to use it. Leveraging Big Data to your advantage should be a priority for you and your management team, because it’s a priority for your competitors.
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