Leaders in every industry need to start dealing with the implications of big data; it's not just the data-oriented members of your team. With the increasing volume and detail of information that's coming through due to all the content being producted on the Internet, along with the rise of multimedia and social mediathere is an exponential growth in data that can and needs to be harnessed. For those of you who are unaware of big data is or are just now looking at how it can be used to add value to your business, it's important to understand the basics of it first.
What is Big Data?
Big data is a compilation of data sets that are so large they are impossible to process accurately utilizing traditional on-hand database tools and applications. Many business owners need to be able to capture, curate, store, search, share, transfer, analysis and visualize all their information -- all of which they are unable to do unless they have specific software services to assist them.
The world has an enormous amount of data, 90-percent of which was created only in the last decade. So much data is created that studies have shown that 2.5 quintillion bytes of data are created daily. That means 2,500,000,000,000,000,000 bytes of data are created.
How Does this Affect My Business?
The reason data has increased so vastly in the past years is due to business records and transactions. Your business, like so many, might find yourself creating large sets of data that become physically impossible to sort.
For some businesses, hundreds of gigabytes might be the point when regular management software tools become invalid and, for others, it could be several tens or hundreds of terabytes before it becomes inoperable. Either way, the overwhelming number of data affects eventually many major enterprises such as Google, Facebook, Amazon and other companies.
How Can Big Data Help Me?
- Human Resource Operations: Many companies can utilize big data to better assist with employee benefits. For example, a company can log health-insurance claim data of its employees, allowing managers to analyze how their employees are using their benefits.
After evaluating the data, a manager might notice that employees are getting more brand-name drugs over generic with their insurance cards. Awareness can be risen throughout a company on the high costs of brand-name drugs, as well as how clinical trials proved that a generic brand has the same results as their brand-name counterpart. Two years later, a manager might notice that a 10% or greater decline in brand-name purchases over generic purchases.
By analyzing employee big data that would have otherwise been unavailable, a company has a larger opportunity to save money on health insurance costs by informing their employees. This is a single way HR can utilize big data.
- Product Development: Businesses utilize big data to increase product development and make products that are more likable to the general public.
McDonalds has a vast menu and it is always looking for new things to add to its menu. Let's say, for example, they create a new lunch item and launch it. Over the next few weeks, McDonalds logs the number of people who purchased it from every single store it was released to (several thousand). Each day McDonalds might accumulate a total of 25 Terabytes of information of sales transactions – accumulating 700 terabytes of total sales information in 4-weeks.
Utilizing a big data software, CEOs will be able to breakdown figures and see what percentages of people are purchasing their new menu item. In addition, they can analyze the trends over the weeks and notice whether sales increased, decreased or stabilized since the launch. Using this data, McDonalds can pull the item from menus or make it a permanent menu item.
McDonalds can also utilize this data to see if specific regions of the world were more acclaimed to a menu item then another, creating different menus varying on the region. McDonalds could only do this by cyphering through big data to find the exact data points necessary.
- Marketing Trends: Businesses need to understand their clientele in order to manufacture the right products to them. Companies who have large reward or store credit card programs are able to collect data from thousands or even millions of customers and compile it into a database. Information collected includes income brackets, age, gender and other main demographic key factors.
Based off this big data, businesses can narrow down on the demographics of their most loyal customers and the products they are purchasing most often. Marketing toward these demographics and clothing designs to bring in more customers would not have been possible without big data such as this.