Big data has quickly become one of the most popular new catchphrases in the business world. However, few people stop to really explain it. Partially this is because there are many who discuss big data without fully understanding it, but it is a complex topic that merits its own introduction. In this article, we will go over the basics of what big data is and what it means in the business world.
Clearing the air
First of all, it is important to note that big data is a little vague. It refers to data sets so large that traditional forms of statistical analysis fail. There is no particular threshold for when this occurs, because much of it has to do with the computing resources that are available. The field of statistics has developed new techniques to deal with large datasets, many of them related to a field called machine learning. Machine learning entails letting the computer figure out the relationships in the data on its own. There are also solutions that involve adding more resources, like cloud services.
Big data requires a new context for programming and analysis. One of the most popular platforms is Hadoop, a programming language and environment that is well-suited to performing basic tasks as quickly as possible on large datasets. Hadoop also has the advantage of creating useful reports. It is so popular that many programs to create data visualization or enhance its functionality exist to make Hadoop reporting a core part of working with big data. Having the ability to create graphs and charts from big datasets is invaluable because it can give more context and more comprehensibility to an otherwise opaque set of facts. The goal of analyzing big data is to learn the story behind that data.
Why utilize big data?
As for the motivation for using big data in business, there are many. Perhaps the largest application is in marketing. What marketers need to do is to predict consumer behavior so that they can acquire new customers and keep them at a minimum of cost. The more a marketer knows about their current and potential customers, the better they can tailor their campaigns. In this case, the big data refers to customer data.
The rise of web-based data gathering through tools from Google and other sources lets marketers collect far more data about their audience than ever before. For example, marketers working for a brand can examine the website’s visitors using analytical tools and learn about the demographics of those visitors in great detail, and then break that down by the actions those visitors took, like making purchases or staying on the site for a long time. This data lets marketers know what kinds of people seem to find the brand most appealing, or at least who finds the site most effective. Apps provide even more data than websites.
Why big data is everywhere
Marketing is not the only area where big data has become highly useful. Departments like support, customer service, and marketing all fall under an umbrella called customer relationship management, or CRM. The purpose of CRM is to make sure every customer has a great experience from the beginning of their engagement with the brand onward, with the goal of forging strong relationships. CRM software can pull data about every customer from their site visits, service calls, purchase history, and so on. Then the company can carry out analysis to see how they are performing with different kinds of customers or how they handle certain categories of bottleneck in the brand-customer relationship. This pursuit can accumulate a lot of data, because so much detail is recorded for every customer.
There are many creative and innovative applications of big data that are unrelated to gathering information about customers or potential customers. For example, some companies use apps to survey people about the weather, building a crowd-sourced weather tool. Another wants to spread millions of tiny sensors all across major cities to measure air quality. Big data is a double-edged sword in that it is difficult to tell exactly what the payoff will be in many cases. Expecting big data to replace business insurance or a marketing or advertising budget is simply setting yourself up for failure. It’s a good idea to start out with a pilot program and try to give it as much concrete structure as possible, such as a specific, actionable goal. That way, it is easy to learn more about how big data works, how to work with it, and how it can help your company.
There are many new applications of big data out there just waiting to be found, and some creativity can open up exciting new expanses. Keep an open mind, but balance that with a willingness to end a project when the return on investment seems to fade. Like any other ambitious project, big data can get out of control. It is much more than just a fad- as long as you know the basics.
