Over the past few years, big data has been changing the way many companies operate. Big data promises to revolutionize business as it works its way to midsize and small organizations. Here are 10 ways big data is changing business.
Business intelligence is a set of data tools used to provide better business insights. It goes hand in hand with big data. Before the rise of big data, business intelligence was rather limited. Big data has given rise to business intelligence as a legitimate career. Many companies are gearing up by hiring business intelligence experts because they help take a company to the next level.
Any business that generates data can utilize business intelligence. Nowadays, it’s rare to find a business that doesn’t generate any data at all, so any business can benefit from better business intelligence. New uses for business intelligence are being devised regularly.
Big data’s first big mark on businesses has been its insights into customer shopping behavior. Before big data, companies only had the data from actual sales. Big data, by contrast, captures minute customer actions, allowing businesses to create more targeted marketing campaigns. Big data analysis may not always be perfect, but it is highly accurate. This high accuracy allows companies to target marketing to perceived customer needs.
Big data can provide very specific information based on purchase and browsing history, enabling companies to create highly personalized offers to existing customers. These offers can be presented via email, company websites, streaming services and online advertising. Big data can also be used to analyze text, videos, images and audio data on review sites, social media and other websites to determine customer attitudes, spot patterns and deliver appropriate content.
Imagine how your business would benefit from being able to market the products that you knew your customers needed and from knowing enough information about them to tailor your message to their specific needs.
Big data will turn customer service upside down, as it allows businesses to know exactly what their customers need before they even voice their concerns. This kind of proactive customer service will revolutionize businesses that want to differentiate themselves with superior customer service.
Imagine a customer experiences a problem after a purchase and they call the business. Real-time big data analysis of the customer’s account and their company website visits can predict one or two issues that may require assistance. A voice prompt could even ask the customer if they were experiencing a particular issue and provide automated help.
Either way, customer support representatives would have a good idea what the call was about and deliver knowledgeable customer service. Further big data analysis could allow representatives to proactively contact customers on accounts where predictive analysis determines that the customer might have an issue in the future.
Big data not only promises to improve customer service by making it more proactive but will also allow companies to make customer-responsive products. Product design can be focused on fulfilling the needs of customers in ways that have never been possible. Instead of relying on customers to tell your business what they are looking for in a product, you can use data analysis to predict that information. Data could be captured from customers who share their preferences via surveys and buying habits. You can even use-case scenarios to create a better picture of what a future product should look like.
Big data is not only changing how businesses deal with customers but also how they operate internally. During the ’80s and ’90s, the IT department came to the forefront as the driving force of productivity increases and general business growth. Along with the IT department came the rise of the chief information officer. Now, businesses are developing data departments that are separate from IT departments, as well as appointing chief data officers (CDOs) who report directly to the CEO.
Industrial engineers are focused on efficiency, and they know that you need data to make a process more efficient. Big data is supplying a wealth of information about every product and process.
Engineers are analyzing big data to look for ways to make processes run more efficiently. Big data analysis works well with the theory of constraints: Data makes constraints easier to recognize and, once recognized, easier to identify. When the most binding constraint is discovered and then removed, the business can see huge increases in performance and throughput. Big data helps supply these answers.
Big data has the power to reduce business costs. Specifically, companies are now using this information to find trends and accurately predict future events within their respective industries. Knowing when something might happen improves forecasts and planning. Planners can determine when to produce, how much to produce and how much inventory to keep on hand.
A good example is inventory expenses. It’s expensive to carry inventory; there is not only an inventory carrying cost but also an opportunity cost of tying up capital in unneeded inventory. Big data analysis can help predict when sales will happen and thus when production needs to occur. Further analysis can reveal the optimal time to purchase inventory and even how much inventory to keep on hand.
Businesses need to embrace big data if they want to achieve more. It won’t be long before businesses that haven’t embraced big data find themselves left behind.
Before you implement big data initiatives in your organization, work on making your culture more collaborative and adaptable. According to the NewVantage report, almost 92% of Fortune 1000 executives say culture is the biggest impediment to putting big data results into practice.
Companies in the financial services and insurance industries use big data to detect fraudulent transactions and insurance fraud by finding anomalies. Banks and credit card processors can also use big data to spot fraudulent payments, sometimes even before the cardholder knows that their card has been compromised. Big data analysis can also reduce the incidence of false positives in fraud detection, whereas previously, the financial institution would have frozen the merchant’s account and it might have turned out to be a false alarm.
IT and cybersecurity professionals can use big data to predict threats and vulnerabilities in advance to prevent data breaches. In addition to the information garnered from computers and mobile devices, big data includes data from networks, sensors, cloud systems and smart devices to spot potential problems. Capabilities include unified data representation, zero-day-attack detection, data sharing across threat detection systems, real-time analysis, sampling and dimensionality reduction, resource-constrained data processing and time-series analysis for anomaly detection.
What if you could spot potential problems in your company’s supply chain so you could proactively switch suppliers, reroute goods or use different shippers? Big data enables you to do so.
Amazon has changed the delivery game with its one-, two- and same-day delivery options. To keep up, other businesses can use big data for delivery fleet management by optimizing routes, coordinating delivery schedules and providing the precise locations of items. This added efficiency results in savings on fuel, since delivery vehicles can take the most efficient routes. When UPS implemented big data in this way, it ended up increasing its on-time delivery stats and saved 1.6 million gallons of gasoline a year, according to Crayon Data.
If you decide to implement big data initiatives at your business, make sure you’re aware of these best practices and potential pitfalls.
Cameron Johnson contributed to the writing and reporting in this article.