When historians look back on the current business era, it may be known as The Age of Big Data, because aggregating, organizing, extracting, analyzing and reporting on information and using insights for competitive advantage encompasses much of our business activities today. But what is “big data,” and why does it matter for businesses of all sizes, across sectors?
Understanding “Big Data”
Big data is voluminous, complex sets of information from sources including weblogs, IoT devices, social media platforms and more. Traditional data processing software could not handle the massive amount of data we have today, but open source frameworks like Hadoop and Spark have enabled the growth of big data by making it easier to store and use.
Data is highly versatile; companies use it to generate valuable insights into what their customers want, how customers use their products how people navigate their websites. Big data’s use is so widespread that 97% of organizations are investing in it, and data creation should grow to more than 180 zettabytes by 2025 — 119 more than in 2020.
Big data has three characteristics, otherwise known as the three Vs:
- High volume: To quantify the amounts, deployments involve terabytes, petabytes and exabytes, gradually amassed and organized. When you consider volume from an individual perspective, in 2020, every person generated 7 megabytes in just a second.
- High velocity: Data is received and acted upon quickly, with the highest rate of data streams operating in real-time. For example, WhatsApp users exchange up to 65 billion messages daily, so one can hardly imagine all of the data collected from WhatsApp users everywhere.
- High variety: There are many types of data, including structured (fit in a relational database), unstructured and semi-structured types, including video, audio and text. Analysts can categorize information into lead data and demographics, website and product usage data and customer purchase data, to name a few.
How Big Data Is Used
When companies want answers to big questions, big data provides them. Access to information yields answers that make a difference and can help solve problems, increase revenue, cut costs and improve the customer experience. Professionals can use big data to accomplish a wide variety of business objectives, including the following goals and processes:
Market intelligence and data insights
- learning about interdependencies among humans, institutions and processes, and applying those insights
- leveraging data insights to improve business operations and processes and make investments with greater ROI
- analyzing production, customer feedback and other factors
- understanding where, when and why customers buy so organizations can do more of what works and less of what does not work
- predicting product demand based on data analysis
- modeling projections for future market trends, consumer needs, business operations and more
- optimizing workforce planning and operations for maximum productivity and efficiency
Machine learning (ML)
- teaching machines how to perform the jobs of humans through machine learning and artificial intelligence
- using predictive maintenance to anticipate failures of heavy machinery through IoT sensors
- monitoring many risk factors and continually performing complex analyses
- identifying patterns in data that could indicate fraud or keep companies in regulatory compliance
- managing costs by accessing big data pools and leveraging continually changing expense information
It Is No Walk on the Beach
Companies and professionals that collect and use big data have big ethical obligations. They must comply with continually emerging data transparency, storage and customer access regulations. In many cases, they must remove data from requests made by government agencies or consumers. They must understand consumer privacy and security concerns and protect sensitive data from falling into the wrong hands via cybercrimes.
The potential for data use, and misuse, is as massive as the volumes of data themselves. To make optimal use of big data and avoid its potential pitfalls, companies need experts in data analytics. If you are fascinated by all of the applications of big data, Radford University’s Master of Business Administration (MBA) with a concentration is Business Analytics online may be your gateway to success.