Big data. It’s the latest buzzword to spring out of the business speak dictionary and, like Business Intelligence before it, who the hell really even understands what it means, much less what to do with it?
First of all, and this may seem like stating the obvious here, Big Data refers to the huge amounts of information, both structured and unstructured, being generated and stored every second.
How big is Big?
Very. IBM estimates that by 2020 there will be 300x more information in the world than there was in 2005. This exponential growth in data is fuelled by the increasing volume and detail of information captured by enterprises, the rise of multimedia, social media, and the Internet of Things.
Big Data has been billed as the promised land for businesses. Using it effectively can gain you greater transparency into how operations actually work, better predictions, faster sales and bigger profits. In fact, McKinsey estimates that simply by using data to drive efficiency, the US Health Care industry could create more than $300 billion in value every year.
Data is the next big thing, and companies need to start rethinking their business model to exploit this valuable resource.
Using data – which is essentially information – within an organization is nothing new. Businesses have always made decisions based on some form of data. Either that or they were just taking shots in the dark – which given some of their track records is certainly possible.
So, what’s changed?
Well, previously, companies relied almost exclusively on a small sampling of internal data; mostly because aggregating and analyzing large amounts of data from many different sources was technically difficult and unbelievably time-consuming. Now, the new technologies driving the Big Data revolution have given businesses the ability to acquire, process and analyze much greater volumes of both internal and external data.
Case in point; during my time as Head of Technology Innovation at a large bank, I saw a lot of acquisitions. Whenever the bank would acquire a new company there were numerous policies in place to manage the integration of that company’s assets (people, real estate, capital, etc), but when we talked about data in the bank, we were really only comfortable with Market or Financial Data. Our appreciation of data did not extend to the numerous different types of data that existed both within and surrounding the companies we acquired. The potential of the data was not fully exploited because it didn’t look like the data we were comfortable with.
Today, data is considered one of a company’s most valuable resources. Why? Because it gives you insight into where the greatest business value lies.
Some analysts have even gone as far as to describe data as the new oil.
That may sound like a whole lot of marketing B.S., but it’s actually a pretty good metaphor: data is a valuable resource that needs to be mined (from databases & the web) and refined into something useful (by running correlations or visualizations). It can help us to discover new things and has the potential to bring huge profits. There are even data spills – when companies accidentally leak personal data. Luckily, unlike oil, data is an inexhaustible resource – and it doesn’t kill polar bears.
As a business you need understand the value of data in two parts. The first is to recognize the value of the data your company already produces and not just its value to you. The second is the value of external data, whether that be on your customers, competitors or the market in general.
The proof of data’s dominance is already in the pudding. If you look at some of the biggest and most powerful companies today, your Googles and Amazons, they are essentially data companies. Maybe they didn’t start out that way, but they now store the largest bank of information in the world. They certainly got a head start in the data collection race, but they also had to spend millions doing it.
Today, access to data is much greater. A fair few sites have APIs and for ones that don’t there are plenty of services, my own included, that offer the building blocks to create your own. Supporting those building blocks are a multitude of information hubs and training courses to help those of us without a computer science degree figure out just how to integrate and analyze that data.
Big data isn’t just a luxury item for the elite anymore. It has become the everyman’s tool for business insights. If you’re not already looking into how you can use external data and leverage your own, you’re behind. Data is fast becoming an arms race and those who are slow on the uptake run the risk of being outgunned very quickly.