There is absolutely no doubt that the right use of big data helps businesses become more profitable. But for this to happen, there are things businesses must know.
Big data is the hottest technology trend going around right now. Crunching, analyzing and evaluating this data helps execute high-value marketing campaigns and intelligent forecasting, perform risk analysis, explore new avenues for generating top-line revenue and a whole lot more.
There is absolutely no doubt that the right use of big data helps businesses become more profitable. But for this to happen, there are things businesses must know about big data. This helps to ensure you don’t take a wrong step while adopting the use of large data sets for business benefit.
Let’s take a look at seven of these things:
1. It’s all about identifying opportunity
Research undertaken by MGI and McKinsey’s Business Technology Office looked at the use of big data in five domains. It found that if used well, it could make businesses in most of these domains much more profitable. For example, retailers’ operating margins can increase by a whopping 60% just by leveraging big data’s potential.
If you want to use big data effectively, the first thing you must zero in on is the opportunity. Identify the specific business processes that can get a shot in the arm if you can get hands-on key insights through big data. You will need to identify the process/activity that creates the biggest benefit.
To do this, you will need to identify a particular business problem that remains unsolved in spite of your best efforts. Ask yourself this question: Will getting big data insights solve the problem? Start from there and move onwards. (Learn more in The 6 Things You Need to Get World Changing Results With Data.)
2. Getting skilled personnel onboard
The use of big data needs specialized skill sets. (In-Demand Big Data Skills: A Mix of Old and New is a good read on the subject.) While you can train certain employees in the use of big data, the idea here is to ensure that your organization doesn’t approach big data in a half-hearted manner. To benefit from such data, you will need to institutionalize its use and implement a big data policy. This is where specialized roles such as chief data officer, big data manager, and big data engineer come into play. The use of big data is not just about working out the goals you want to achieve with its use but also making sure that you have people in charge who know how to optimize the use of the data to achieve these goals. (Read more in Data Scientists: The New Rock Stars of the Tech World.)
You need skilled personnel who have the ability to harness and make sense of big data. This is also important because of big data’s nearly infinite nature. This brings us to the next point.
3. The importance of the right data
Your business and its activities will be producing data from various quarters. For example, if you are an online business, you can tap into data left knowingly and unknowingly by potential buyers on social media, on-site browsing, point-of-sales purchases and a whole lot more. Data points are generated at various times during a customer’s online journey, but it is not necessary to analyze each and every piece of data to get deeper insights into buying behavior. If you want to create a comprehensive customer profile or deliver precise product recommendations, you will need to make use of the right data. Yes, along with all the “right data,” there is also a lot of “wrong data” that is floating around out there. You need to make the effort to pick the former rather than the latter.
While this is as difficult as it looks, there are plenty of tools available on the market that can help make your job easier. This is also where the importance of the right skill sets comes into play. Experienced big data professionals can judge the relevance of the available data, and assimilate only the most useful data for a given purpose, ignoring the rest.
4. Big data can’t predict the future
There are some people who think that big data can predict the future. Well, it can’t. What it can do is help your business prepare for the future. Big data is essentially past data. It is about things that have happened in the past. But you could try and use this data to guess a future outcome. If you have data about a customer’s buying decision under a particular circumstance, you might be able to use this data to figure out his buying decision under a similar circumstance in the future. This is by no means predicting the future; all you have in your hand is an informed guess. But this “guess” helps prep your business for the future. The ideal use of big data is to improve your current situation and better existing results.
5. It’s not a shiny new toy
Big data is an advanced technological concept but it shouldn’t be seen as the be-all and end-all of your business’s IT endeavors. Do not give big data precedence over your existing IT infrastructure. Instead, it is important that your big data initiatives seamlessly integrate with your entire IT infrastructure. Thinking of big data as a solution that solves a set of problems for your business helps; taking your existing systems like inventory and payroll processing and replacing them with big data initiatives might lead to systemic problems at a later date.
Is big data good? Yes, it is. Can big data act as a replacement for existing systems? If push comes to the shove, it can, but it’s a really bad idea.
6. Big data can be confusing
In a best-case scenario, big data crystallizes courses of action that can deliver the best results. But there are always two sides to a coin, and in a worst-case scenario, it can paint a myriad of different pictures that can prove to be confusing. If you don’t have a big data mindset, the diversity of the projected scenarios about a specific issue can not only serve to confuse but can also lead to misinformed decision making. This is why it is really very important that you have expert data scientists on the payroll if you are to make any sense of big data at all.
7. Combine cloud and big data
Where is all that data going to be stored? Does your in-house mainframe have the capacity to store big data? No? Then, why not take the help of cloud computing? The use of cloud and big data walk hand in hand, and many a times cloud can also be a great place to test the use of big data in a project, apart from it being used as the place to store all the big data you’ve got your hands on. So, while thinking of investing in big data, also think of investing in the cloud.
These are not the only things you need to keep in mind while adopting big data, but these seven pointers will definitely give you a heads up on all that is necessary to actually benefit from it.