- There are hundreds of articles out there singing the praises of Big Data and predicting how it’ll change our world beyond all recognition. However, for the average business, the practical, everyday uses of Big Data can seem out of reach. Let’s take a look at real and practical ways Big Data can help any business.
How does Big Data work?
Big Data works on the principle that the more you know about anything or any situation, the more reliably you can gain new insights and make predictions about what will happen in the future. By comparing more data points, relationships begin to emerge that were previously hidden, and these relationships enable us to learn and make smarter decisions. Most commonly, this is done through a process that involves building models, based on the data we can collect, and then running simulations, tweaking the value of data points each time and monitoring how it impacts our results. This process is automated – today’s advanced analytics technology will run millions of these simulations, tweaking all the possible variables until it finds a pattern – or an insight – that helps solve the problem it is working on.
Until relatively recently, data was limited to spreadsheets or databases – and it was all very ordered and neat. Anything that wasn’t easily organized into rows and columns was simply too difficult to work with and was ignored. Now though, advances in storage and analytics mean that we can capture, store and work with many types of data. As a result, “data” can now mean anything from databases to photos, videos, sound recordings, written text and sensor data.
To make sense of all of this messy data, Big Data projects often use cutting-edge analytics involving artificial intelligence and machine learning. By teaching computers to identify what this data represents– through image recognition or natural language processing, for example – they can learn to spot patterns much more quickly and reliably than humans.
Broadly speaking, Big Data can help your company in five key ways:
- Making better business decisions
- Understanding your customers
- Delivering smarter services or products
- Improving business operations
- Generating an income
Let’s look at each usage in turn, and explore some real-life examples of how Big Data has added value for organizations.
Making better business decisions
Big Data gives businesses the tools they need to make smarter decisions – decisions that are based on data, not assumptions or gut feeling. But for this to happen, everyone in the company must have access to the data they need to improve decision-making. This means data should no longer be the sole domain of IT departments and business analysts; instead, business users across the company should be able to explore and interrogate data so that they can answer their most pressing business questions. This company-wide access to data is often referred to as data democratization.
Retail giant Walmart provides a great example of this democratization of data in action. Crucially, though, Walmart provides its people with access to data in a controlled way – thereby ensuring that non-techy types don’t get overwhelmed by data and can easily find the answers they need.
How does this work in practise? Walmart’s Data Café is a cutting-edge analytics hub, where hundreds of streams of internal and external data can be sliced and diced to deliver insights. Teams across the business are invited to bring their business problems or questions to the Data Café’s analytics experts, and find a data-based answer. For example, one grocery team couldn’t understand why sales in one product category had suddenly dropped, so they turned to the Café for answers. By drilling into the data, they quickly identified that a simple pricing miscalculation had led to products in that category being listed at a higher price than normal in some stores.
Understanding your customers
Ponder for a moment how much Facebook knows about your life, and how it uses that knowledge to give you relevant recommendations. This perfectly demonstrates a key advantage of Big Data: namely, the more you understand about your customers, the better you can serve them.
Delivering smarter services or products
When you know more about your customers, you can design smarter products or services to suit their needs.
Let’s review the example on banks’ processes. The average bank knows a lot about its customers, from what they like to buy, to where they go on holiday.
Some banks aren’t designed to squeeze more money out of customers by flogging additional financial products. Rather, it’s about giving customers a better service – and saving them time and money. For example, transactional data is analysed to spot where customers might be paying twice for a financial product, like paying for travel insurance that’s already included with a bank account service. Branch and call centre staff can then make personalized, real-time recommendations that will help customers.
Improving business operations
Robotics and automation may be old hat in industrial settings, like factory production lines. But, increasingly, plenty of other business sectors and functions are becoming more automated and efficient. This rise in automation is underpinned by Big Data.
Let’s take a quintessentially human business function as an example: HR. Big Data and automation has the potential to completely transform – or at the very least, augment – a wide range of people-related processes, from recruitment to learning and development. For example, chat bots are already being used to answer common employee questions, and AI-driven training courses are able to spot when a trainee is having trouble grasping a particular lesson.
Generating an incomeBig Data isn’t just about improving processes and decisions, or understanding more about customers; data can be monetized to boost revenue or create an additional income stream.
Big Data can save companies money. Lots of money. In fact, data-driven fraud-detection technology, which is used by credit card providers to identify and prevent fraudulent transactions, has saved billions of dollars.
As well as helping businesses in these five ways, Big Data is also fuelling the artificial intelligence (AI) revolution. In other words, the proliferation of data means that machines and algorithms have more data to learn from. This presents even more exciting opportunities for businesses to automate processes, make smarter decisions, delight their customers, and more.