Data comes from a wide range of sources. In the modern business environment, the right data can make the difference between success and failure. This is true across different fields of business, and any organization that can provide customer data is likely to have many different customers to choose from. Big data matters and current business trends moving into the future suggest that this will continue. Many observers believe that a big data business model is the new thing that will help some businesses leapfrog others to become the best in their field. Data is woven into every function and sector in the global economy, just like any other essential factor, such as human capital or hard assets. In fact, much of the current economic activity could not take place without data.
What is Big Data?
Big data is a measurement of data that has grown so large that standard databases are unable to work with and contain the massive amounts of information. Big data comes from both internal and external data sources. Internal data sources include: transactions, 88%, email, 57%, and log data, 73%. External sources include social media, 43%, photo and video, 34%, and audio, 38%. In addition, sensors are a growing source of big data. They can be found everywhere and generate large data sets.
How Companies can Leverage Big Data
- Big data can make information transparent, thereby unlocking significant value.
- As big data business models are implemented, and companies store more information in digital form, they can collect more detailed and accurate performance data on everything from sick days to product inventories and therefore boost performance and expose variability.
- Companies can use big data to develop the next generation of services and products.
- A big data business model can significantly improve decision-making, unearth valuable insight, and minimize risks that would otherwise remain hidden.
- Big data allows better segmentation of customers, thereby enabling more precisely tailored products and/or services.
Examples of a Big Data Business Model
The real estate industry, for instance, trades on information irregularities such as tightly held knowledge of the ‘ask and bid’ behavior of buyers and privileged access to transaction information. Acquiring both requires a large amount of effort and expense. However, in recent years, online experts in real estate data have started to bypass agents, allowing sellers and buyers to exchange perspectives on the value of properties, thereby creating parallel sources for real estate data and laying the foundation for a big data business model.
Before big data, it might have taken businesses many weeks before survey results were analyzed and presented to management. In addition, when data was expensive to obtain, scarce, or not available in digital form, businesses often relied on the highest paid person’s opinion to make important decisions. Therefore, social network and Internet-based firms began to amass and analyze new kinds of data. Over the past 15 years, a vast majority of business analysis was done using Excel.
Challenges Created by Big Data
- In the last 4 years, the problems posed by the massive amount of data businesses can access has only been exacerbated further.
- In 2015, one in four companies claimed they had too much data and had a difficult time making sense of it.
- Today, 54% of executives say they only took advantage of only half of their valuable data.
- 41% of respondents struggle with maintaining the quality of big data and 33% continue to struggle with managing the overwhelming amount of data.
By 2015, more than 4 million IT jobs had been created globally to support big data, including 1.9 million jobs in the United States. The top 5 industries hiring big data-related expertise include:
- Technical, scientific and professional services — 25%
- Information technologies — 17%
- Manufacturing – 15%
- Finance insurance — 9%
- Retail – 8%
Big data, therefore, will become the basis of growth and competition for businesses, creating significant value and enhancing productivity for the world economy by increasing the quality of products and services and reducing waste. Consequently, the nature of business conversations about big data is shifting from preliminary excitement to expecting lasting financial impact. As it becomes even more popular, many corporations are reporting its effectiveness and the positive effects it is having on their operations.