Big Data and Your Business Strategy

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If you’re confused, uncertain or even a little worried by the idea of ‘big data’, you’re not alone.

More data has been created in the past two years than in the entire history of the human race, yet only 0.5% of it has been analysed.

Many businesses avoid using big data because they aren’t sure how to incorporate it into their strategy, and managers worry it’ll cost too much. Although it requires an initial outlay of expenditure, if done well, it can significantly increase profits and efficiency in the long term.

The truth is, big data isn’t just a fad or buzzword. Businesses that have already embraced it, like Google and Amazon, are eclipsing their competition. With reports of an average increase of 5% productivity and 6% profits in just its early stages, big data certainly can’t be dismissed as hype.

Below we explore the opportunities that big data presents for your business.

 

What is Big Data and How Do Analytics Tools Work?

Regardless of the type of business, there is a huge amount of data available that can be used to grow your business. Analytics tools sort out the immense volume of information quickly and store it centrally, in an easily retrievable way.

There are four main types of big data.

Prescriptive analytics is an analysis of what actions should be taken in particular circumstances. It helps you make decisions, set rules and make recommendations. While incredibly valuable, only 3% of businesses are using it. It’s particularly useful for very specific questions. For example, an insurer may want to know how many of its customers are clinically obese. They can then add filters such as diabetes or cholesterol levels and apply different fees appropriately.

Predictive analytics uses past patterns to create a picture of the future. For example, a marketing company may want to increase its CRM efficiency. By using predictive analysis, they can easily see how their customers are likely to be interacting with their business in the future, allowing them to adjust their communications to increase the chance of retention.

Diagnostic analytics offers an overview of past performance. It’s helpful for uncovering the broad patterns and offer business insight. For example, a diagnostic report may be used to show how effective a social media campaign has been by looking at specific metrics, like shares, comments, views, pins, etc. This information can be used to determine what should be changed to increase its effectiveness for future campaigns.

Finally, descriptive analytics is what is happening in real-time based on incoming data. For example, a business advisor may use this method to discover that a small business struggles to cope with loan repayments every time there’s an interest rate rise, and in that case, suggest they change to a fixed-term loan to save money.

 

How to Incorporate Big Data into Your Business Strategy

Now you know how important big data is and how it works, it’s time to see how to make it work your business.

There are many different analytics tools available, but it’s imperative that you choose the right one for your business. Research what’s being used in your industry and talk to a trusted business advisor.

Remember, your big data plan should fit in with how your company actually makes decisions. This means you use your existing business plan as a guide to finding ways that more data will help you increase performance. And ensure your strategy is simple and well understood by all levels of your business.

You may be advised that you need to establish a new IT structure. Work with your CIOs to pick out the most relevant data you currently have and decide what you’d like to do with it. This is likely to be a cloud-based technology. They’re becoming increasingly popular because they offer the easiest transition and cost effectiveness.

Ensure that your analytics program has a clear and simple interface, and that all levels of your business are trained to use it appropriately.

You may also need to expand your IT department. Create an environment where data scientists and modellers can thrive and continually be looking for ways to grow your business.

The right big data model incorporated into your business strategy puts you in charge so you can sit back and watch your business grow.

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