What’s the big deal about big data? Everyone has jumped on the big data bandwagon and seemingly with good reason. But in the vast oceans of data that are now accessible, how do you distill the value in order to implement better decision making? Keeping your eyes on the prize is key - generating business advantage and measurable value. McKinsey & Company outline five ways big data can add value:
Making information transparent and usable at much higher frequency
By digitally storing transactional data, companies can collect more detailed and accurate performance information to expose variability and boost performance
Segmentation of customers – big data gives companies the ability to narrow this down even further, tailoring products or services with precision
Using sophisticated analytics to improve decision making
Improving the next generation of products and services
So how much bang can we expect for our buck? McKinsey & Company and MGI estimate that “a retailer using big data to the full could increase its operating margin by more than 60 percent.” Capgemini, in a survey of business leaders, found that 26% improvement in current performance has already been delivered by big data. Impressed? Well in the next 3 years, an even more impressive 41% performance improvement is expected to result from big data. Now those are some pretty promising numbers.
Big data can spell serious value for the ‘greater good’ too. For all those long-suffering commuters, this fantastic example reported by the BBC should hit home. In the largest release of anonymised data, researchers at IBM used Orange call data which pinpointed users’ locations from 2.5 billion call records to redraw the bus routes of the Ivory Coast’s largest city. This has the potential to reduce the travel times of people by 10% across the city were it to be implemented.
Think you know all there is to know about buyer behaviour? You may need to think again. Wired suggest that the newly available data from the big data pool allows us to uncover previously hidden, and often counterintuitive, drivers which directly impact sales. It might also be time to look to the outside world to tap into some real business value. In a recent IBM survey, half of the respondents reported internal data as their primary source of big data. But access to external data is so widespread now that combining analysis of both sources of data is an area of real untapped value.
It’s all very well having an idea that data is valuable, but how do we quantify this? Whilst general opinion is that data is a strategic asset, the value of data is often seen as unquantifiable. Capgemini found that around 85% of respondents said that the real value and opportunity lie in the ability to analyse and act in real-time – insight at the point of action. This enables forward-looking analysis to inform your next decision. Companies can use real-time analysis to adjust to rapidly changing market conditions, making data a tangible, valuable asset – quantifying the value of the data.