Since the mid-1990s business owners and IT management professionals might have heard the term big data. While initially referring to increasing data volumes at the time, analyst Doug Laney expanded the definition of big data in 2001 so companies can develop direct data analysis strategies to improve business operations.
In this article, we'll discuss the definition of big data, why it's important, the benefits and how various industries use big data.
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What Is Big Data?
Big data refers to the terabytes, petabytes and exabytes of data that companies collect and create over time. It's a combination of structured data, like transactions and financial records, unstructured data, such as documents and multimedia files and semistructured data, like web server logs.
While big data is derived from various sources such as customer databases, emails, transaction processing systems and social media networks, five qualities pertain to all big data:
- Volume: Volume refers to the amount of data companies collect. Big data typically includes a large volume of figures, but there isn't any standard volume that classifies a dataset as big data. Instead, volume describes the initial size and amount of data you collect.
- Variety: Big data systems store and manage multiple types of data since companies collect intel from varying data sources. Big data analysts evaluate and integrate various data types to attract new customers, understand market conditions and save time and money. Data sets can also contain multiple formats or different meanings, further complicating data analysis.
- Velocity: The velocity at which you collect data refers to the speed of data collection and processing. Companies need their data to move quickly, so large data sets are often updated on a nearly real-time basis. Continuous data collection requires you to generate and evaluate data rapidly.
- Veracity: To get value from your data, you need full datasets relevant to your business. Veracity refers to the trustworthiness of your data. Data analysis presents challenges when it comes from different sources, which can undermine the insights your company gains from big data analytics.
- Value: Data analysts have to sift through large volumes of data to determine what has real value to your business. Data that has value will ultimately help your company work toward its desired outcome for particular projects.
Why Is Big Data Important?
Companies depend on big data to understand their current business functions and how they can better themselves. Evaluating what the data says will allow you to better manage risks and strategically plan for your business. Big data analysis can save you time and money, give you an advantage over competitors and help you understand and cater to your customers' needs.
So, what does big data analytics do for your company? Here are three reasons big data matters:
- Cost and time savings: Big data tools save organizations time and money by identifying the most effective business techniques. Real-time data collection can also immediately help you analyze data from various sources and quickly make decisions based on your findings. People in industries with a lot of equipment, such as manufacturing, can use big data to quickly determine when they need to repair machines.
- Competitive advantage: Big data analysis gives your company an advantage over competitors by providing you with insights into market conditions, which will also help you predict market trends. Understanding what your customers purchase and how they use your business is crucial for customer retention.
- Customer satisfaction: Analyzing big data allows companies to understand customer satisfaction. Through social media feedback and analyzing customer behavior, you'll know how to better serve your customers. Knowing how your customers use your business will help you attract new customers and keep current customers from choosing competitors.
What Are the Benefits of Big Data?
Proper big data analysis can benefit your business, generally improving business operations and increasing revenue and profit. Data scientists constantly search for ways to make your business more efficient and effective. Making decisions based on valid data will help you know that you're making the best choices for your business. Plus, you can introduce variable factors to test your decisions and make sure you've made the best decision.
There are three benefits of big data.
1. Attract and Retain Customers
Big data analytics helps you attract new customers and solidify the loyalty of current customers. Data analysis will give you valuable insights about your customers' wants and needs. Companies can analyze big data to understand current customer satisfaction, including the areas where your company can better satisfy its clientele. Big data can even comprehend changing trends and predict customer behavior so you can continue to best serve them.
Beyond enlightening companies about current customer needs and satisfaction, big data also improve marketing campaigns. Personalized marketing campaigns are an effective way to attract and engage potential customers to convert more leads.
2. Increase Employee Productivity
You can also use big data analysis to assess the performance of current employees, including identifying which employees can improve their productivity. Big data can make your overall business more effective by helping employees better understand your specific company goals and take appropriate action on crucial tasks. Analyzing factors like employee absence rates, workload and work output will help you decide where to make improvements to bolster productivity.
3. Manage Waste Efficiently
Businesses use a lot of resources to take care of waste. Big data analytics helps make waste management more efficient. Big data analysis aids in every step of the waste management process, from deciding what waste your business would like to measure, when to measure waste and make adjustments to help minimize waste. Understanding and streamlining waste management will save your company money in the long run.
What Services Use Big Data Analytics?
Many industries use big data to improve business operations and maximize revenue. From manufacturers to medical researchers, big data gives analysts and IT specialists information to help ensure that business continues to run smoothly.
Big data analytics is usually associated with services like:
- Manufacturing: Big data helps manufacturers ensure the manufacturing process is accurate and efficient. Companies can develop custom products, reduce the number of tests needed for products before they're released, improve energy efficiency and stay competitive according to current market trends.
- Medicine: Medical researchers use big data analytics to identify signs of impending disease to diagnose illnesses and analyze world health and disease trends. Internet and health record data help researchers give accurate public health reports.
- Banking: Banks rely on big data to mitigate fraud. Big data reduces the number of fraudulent transactions by monitoring financial markets. Exchange and Trading Commissions also use big data to monitor stock market trading.
- Media: Communications and media professionals use big data to report global events in real-time on multiple platforms. The entertainment industry also keeps up with recent trends with data analytics.
- Sports: Sports managers use big data to monitor individual player and team performance. Location-specific sporting events such as the Cricket World Cup and Wimbledon depend on big data analytics to understand viewership patterns.
