Big data is a pet term for many leaders, columnists, and business analysts. It is touted as the Holy Grail of corporate assets, and a key factor in gaining a competitive edge. But what exactly is big data?
First of all, you may be surprised to learn that big data is not a new term. It has been around since the 1990s. We don’t know for sure who came up with this term first. But we do know that John R. Mashey made it popular, while he was working for Silicon Graphics.
Definition of Big Data
There are many definitions for big data, suitable for various purposes and intents. We prefer to adopt the explanation given by Waller & Fawcett in 2013, defining big data as “datasets that are too large for traditional data processing systems and therefore require new technologies to process them.”
Now, specialists have found ways to characterize big data in order to help organizations understand its nature. At the moment, big data is characterized by five key characteristics, known as the 5V:
- Volume
- Velocity
- Variety
- Veracity
- Value.
How Is Big Data Generated?
We accept that we have big data, but how do we get it? Who creates it? The answer is: everyone and everything. Data is generated both by people and by machines/devices that perform various tasks.
Here are a few examples of big data generators:
- Transactions — understood in the general sense of any interaction between individuals and business entities.
- Internet applications — tracking traffic data and actions taken on web pages creates data.
- Social media platforms — users generate huge quantities of data every minute.
- Electronic devices — the recordings, measurements, and calculations performed by various devices create data.
Reasons Leaders Must Learn to Harness the Power of Big Data
The world of business, both at B2B and B2C levels, is moving faster and more unpredictable than ever. To stay competitive, leaders must:
- Decide, act, and react fast
- Think outside the box
- Collaborate and brainstorm
- Make sound decisions
- Be flexible and adapt to sudden market changes.
This is where big data becomes valuable. Accessing, analyzing, and interpreting big data is the secret of successful leaders who accomplish all the requirements stated above.
How Big Data Helps Leaders Make the Right Decision at the Right Moment
Now, let us delve into the relationship between big data and decision-making. These are the most important benefits of relying on big data to steer an organization on the path to success:
1. Real-Time Decision Making
Powerful computers can collect, analyze and interpret big data in an incredibly short time, with almost no lag. This allows leaders to have an accurate image of what is going on within their organization and make or adapt decisions at the right moment.
Speed of change in decisions and actions can signify increasing the market share or avoiding an expensive pitfall.
2. Reducing Costs and Time for Performing Tasks
New big data technologies allow fast and low-cost data collection and processing compared to traditional computing capabilities. This means that organizations can redirect budgets to other critical aspects, while leaders have access to a constant flow of relevant data at all times.
3. Predicting Outcomes
Using big data and superior computing power, managers can create scenarios and generate forecasting models. They can rely on relevant historical data and correlations between various factors to create reliable predictions for sales, customer behavior, market trends, and other critical aspects.
4. Growing the Business without Supplementary Investments
Last but not least, big data allows leaders to stimulate the growth of the customer base or the sales without hiring more sales agents or marketing specialists. Big data helps the existing staff reduce friction in the sales process, speed up the customer journey and enhance brand loyalty among existing customers.
This article was originally published on pldx.org.
