The advantages of using the big data and advanced analytics management are no longer in doubt. Numerous successful case studies and broader research reveal that companies that have adopted analytics into their daily operations are reaping real returns. According to McKinsey & Company, organizations that use big data-driven business strategies can enjoy productivity and profit gains that are 5 to 6 percent higher than their competitors.
Are you using big data to make informed decisions in your company? All companies have access to information but it’s not easy to turn it into actionable insights that can be applied to the strategic planning process and to become a big data-driven business. In this article, we will talk about benefits of using big data for business and discuss how to adopt an effective data-driven business strategy to compete and survive in a highly competitive environment. Let’s get started!
What Is Big Data?
The term “big data” is relatively new. It describes the large volume of structured and unstructured data from a variety of traditional and digital sources inside and outside of an organization that can be analyzed for insights that help make better strategic decisions. Gartner’s definition of big data includes 3 characteristics of information assets, commonly referred as 3 Vs:
- extreme volume – the amount of information that may come from the myriad of different sources like business transactions, the collected results of scientific experiments, social media, and real-time sensors that are used in the Internet of Things;
- the velocity that is the speed of information generated and flowing into the enterprise; it is often referred to real-time analytics but it is also about the rate of changes between different datasets;
- a wide variety of information types that may include structured information in traditional databases, unstructured information (document files, emails, videos etc.), and streaming data from different sensors.
The amount of information that is being created on a global level keeps growing but only a small percentage of it is actually analyzed. That’s why companies need to invest in innovative forms of information processing and rely on new technologies to get cost-effective and appropriate answers to their problems. For example, they may use public cloud computing services with big data capabilities, databases, and other related cloud services that reduce the need for companies to maintain their own on-premises IT resources.
Why is Big Data Important?
In fact, the importance of using big data in business doesn’t revolve around how much information you have. Actually, it’s about how you use this information.
- You can use the insights you gather from analyzing big data to implement effective business strategies and increase your competitive advantage.
- It can enable you to make smarter decisions based on evidence instead of testing new ideas based on assumptions.
- Big data solutions can help reduce costs and increase the productivity of employees.
- You will be able to improve new product development and optimize your offerings.
- It can help you predict trends beneficial for your business and detect potential issues to react quickly.
Wondering how to use big data to win customers? It’s easier than you think. Big data analytics can help you get a clear picture of each step in the sales funnel and provide you with insights on how to serve your clients.
- You can use big data to decide which prospects to target and which channel is best for prospect outreach.
- You can classify your clients into different levels taking into consideration how likely they are to make a purchase.
- It can give you an opportunity to better classify leads and invest your time and effort in those ones that are more likely to convert and become profitable customers.
- You can use analytics to drive brand loyalty and offer your clients specific services, taking into account your prior knowledge of their needs and expectations.
Becoming a Data-driven Business
In the past, the success of any business strategy depended mainly on good instincts and intuition. Today, companies need to implement data-driven business models to gain a competitive edge which, however, requires a change in their strategy, operations, and culture.
Currently, more and more organizations rely on big data analytics to generate value in all spheres and across all activities. According to a recent survey, 80.7% of Fortune 1 000 executives characterized their big data investments as successful. Sounds impressive, right? The survey also shows that the leading corporations invest in big data not only to decrease their expenses but to change how they do business.
According to the study conducted by the University of Cambridge, startups use (DDBM) to create value by optimizing existing services and practices or by developing new models and launching new products. The DDBM framework includes 6 dimensions:
- Key data sources.
- Key activities.
- Customer segments.
- Cost structure.
- Revenue model.
But how can your company become data-driven? Here are some useful tips.
- Determine your business goals. You should have a good understanding of what you want to achieve and what types of information you need to gather.
- Blend information from different internal and external data streams to do a more thorough analysis and develop innovative strategies in-line with demands of your existing and potential customers.
- Invest in infrastructure, tools, and technical know-how. Use software systems that have the capabilities to cross-analyze information from different sources.
- Ensure that everyone in your company has access to relevant information 24/7 and uses the systems as you intended.
- Adopt an agile business model that can allow you to be proactive and react to rapid changes in the market before anyone else.
- You may need to hire a Chief Data Officer who will be responsible for data governance in your company and help you maintain your evolving model.
Developing a Data-driven Business Strategy
Big data offer huge opportunities and building a data-driven strategy that works is increasingly important for any organization. Here are 3 keys to success.
- Choose the right information
As the volume of information is constantly growing, it’s critical to collect the relevant information among various internal and external sources, being specific about problems you want to address. Besides, companies should ensure IT support with advanced capabilities to manage data sourcing, storage, and analysis.
- Create models that predict outcomes and optimize them
The most effective approach to creating a model is to identify a business opportunity and to determine how a certain model can boost performance. Keep in mind that there is no need to choose the most advanced statistical methods that can be too complex for practical use. Instead, you should choose the least complex model.
- Transform capabilities of your company
Using big data-based models requires some organizational changes in existing culture and capabilities. Companies will need to create relevant analytics systems, embed analytics in simple intuitive tools, and take measures to upgrade analytical skills of their employees to ensure that they will be able to use the big amount of information in their daily operations.
The continuing rise in the importance and challenges of big data is one of the most important trends of the contemporary world. Information has a great value as a strategic business asset. It plays a significant role in competing in a digital-driven market since companies around the world can use the power of big data in strategic planning to get insights into the needs of their clients and achieve outstanding business results which couldn’t be possible with traditional tools.