The large scale collection and analysis of information guides organizations. The business world is undergoing a revolution generated by big data. In 2001, data analyst Doug Laney coined the term “The 3 Vs” to describe the defining properties of big data: Volume, Velocity and Variety. Volume refers to the amount or scale of data; Velocity refers to the speed of data processing; and Variety refers to the diversity of data — from “likes” on Facebook to credit transactions.
While the term “big data” is relatively new, the collection and storage of large amounts of information for targeted analysis existed long before the internet came into being. The U.S. was once the largest contributor to global data, but emerging markets are growing at a rapid pace, and the vast amounts of data created and stored are almost unimaginable. Big data is big. According to “Surprising Facts and Stats About the Big Data Industry” published on Cloud Tweaks, the estimated amount of information produced every day was about 2.5 quintillion bytes, according to information from 2015. This includes everything from data from NASA to your photos on Instagram. Many experts expect the amount of data collected to top 40 zettabytes by 2020.
However, the vast amounts of data that businesses collect matter little unless they can process and understand the information. Data is only useful when organizations can derive value from it, and data analytics is the process of understanding information, making connections and extracting insights. Big data is big business when the facts gained from analysis offer guidance to decision-making. It’s imperative that today’s businesses align their big data programs to their business objectives to stay competitive by becoming more efficient, proactive and predictive.
Who Uses Big Data?
Some people think that data collection is all about secret government agencies sifting through our emails, looking for illegal activities, or worse yet, marketing companies looking to sell us more products. Though real, these examples are only a small part of the story. Many industries use this data to make our lives better.
Healthcare
While big data is utilized in healthcare in the same way it is in retail and manufacturing — to improve profits and cut waste — it’s also being used to predict epidemics, improve quality of life and avoid preventable deaths. According to big data and analytics expert Bernard Marr, data now drives the rapidly changing treatment options in healthcare: “The drive now is to understand as much about a patient as possible, as early in their life as possible — hopefully picking up warning signs of serious illness at an early enough stage that treatment is far more simple (and less expensive) than if it had not been spotted until later.”
Marr explains that partnerships between health and data professionals now have the ability to identify future health problems before they happen. Collecting data from various sources for a more comprehensive picture can help medical professionals recognize problems before they occur, giving doctors more information and therefore better insight into individualized patient care.
Retail and Manufacturing
The way businesses buy and sell continues to evolve at breakneck speeds. In the retail and manufacturing sectors, collecting and analyzing data directly affects the innovation of products and services. The proliferation of e-commerce and social media has become a dynamic source of information on customer behavior, providing insights that drive innovations in products and services. Retailers analyze data to predict trends, forecast demand, optimize competitive pricing and design marketing strategies. For instance, some retailers have found the demand for books increases in the winter months, so some online retailers increase the number of book recommendations on social media and even target regions where temperatures are dropping.
The largest retailer in the world, Walmart, is creating the “world’s largest private cloud” that can track millions of daily transactions, allowing the retailer to respond to market changes in real time. Demand for products by geographical area can also be leveraged, preparing goods and readying shipping before customers even place an order.
Education
The use of data in the education sector has exploded in recent years, with all segments of education mining data to improve services. Local school districts use data for everything from planning bus routes to tracking discipline and academic achievement. Schools use data to gauge lunchroom preferences and improve classroom cleanliness. Teachers can even analyze data to learn what types of classroom instruction are most effective.
On a larger scale, data collected from Massive Open Online Courses (MOOCs), which deliver education to millions via the web, provide tremendous insights into academic success. Educators can now analyze data gathered from millions of MOOC students around the world to understand how people learn — and why learners fail.
Government
As local and state government agencies apply analytics to their data, they can make substantial improvements in many areas, including managing utilities, overseeing agencies, refining public services and preventing crime. This directly affects the quality of life for all citizens.
Finance
Even though financial institutions utilize banking data to improve customer satisfaction, they also use it to reduce risk and fraud while meeting regulatory guidelines. One of the major causes of the last recession was the lack of transparency. Financial deals were based on relationships and personal opinion, not real facts and figures. Big data allows investors a more transparent view of markets and conditions, lessening the possibility of fraud. The banking industry, more than any other sector, has the responsibility to protect individuals’ privacy and manage risk, and big data is leading the way.
How Does Big Data Affect Business?
Analyzing data can aid an organization in many ways. While businesses can look to data to refine their internal processes, they can also use it to:
- Reduce costs.
- Save time.
- Spur new product development.
- Prevent fraud.
- Gain business advantage on competitors.
- Expedite decision-making.
The potential for businesses to collect and analyze targeted data will continue to increase across all sectors of industry as the amount of data continues to grow. This information will affect business and marketing strategies as organizations learn what products customers want, who will buy them, and what they are willing to pay.
What Is the Future of Big Data for Business or Global Economy?
As data mining technology continues to evolve, organizations must learn how to interpret the insights to best use the information. The era of big data will fundamentally alter many organizations, leading them toward information-driven business models. As the collection and analysis of big data continues to increase, it will significantly impact not only business and industry, but also societies across the globe.
Learn more about the USI online MBA with a concentration in Data Analytics.
Sources:
SAS: Big Data – What It Is and Why It Matters
U.S. Bureau of Labor Statistics: Working With Big Data
McKinsey & Company: The Age of Analytics: Competing in a Data-Driven World
Ivey Business Journal: Why Big Data Is the New Competitive Advantage
Forbes: Big Data: A Game Changer in the Retail Sector
Forbes: How Big Data Is Changing Healthcare
Cloud Tweaks: Surprising Facts and Stats About the Big Data Industry
