There is a lot of data around these days and rumor says that the typical company doubles the amount of data it stores every two years. A good thing? Not necessarily. Too much data can be extremely stressful. Also, data is just what it is… data.
It does not mean much till you apply structure, analysis and judgement to understand it. No matter the volume.
On the other hand, if you know how to structure and analyze the data – without getting analysis paralysis halfway – it can become a good friend and a competitive advantage.
With more data, businesses hope to understand patterns that would otherwise be hard to detect, e.g. spotting business trends and understanding customer behavior. Maybe that’s were the hype with big data has started. Everyone is trying to get ahead. No one wants to be left behind. A good start however, is to really understand the data that you already have. Also realizing that any data – big or small – always needs to be complemented by sound judgement by the people analyzing and using the data in their decision making.
Now, if already handling ”normal data” can be a challenge – e.g. understanding customer needs derived from a ”normal” market research sample, or internal sales statistics for any set of product or geography – what does that mean to handling and understanding huge sets of data, nowadays mostly referred to as “big data”?
According to an article in Sloan Review, big data can be defined as ”collection of data from traditional and digital sources inside and outside your company that represents a source for on going discovery and analysis”. On Wikipeda, big data is defined as a term to describe a collection of data ”so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.”
No matter the hype, big data has its limitations. Challenges include capturing, curating, storing, searching, sharing, transferring, analyzing, and visualizing the enormous amounts of data that we aim to understand. Another challenge has to do with the facts that the data we try to understand often come in many different ways, e.g. text and pictures. We are not just talking about understanding simple financial figures, but complex texts and multi-structured data of different formats and types and from different sources.
Where’s the evidence that using big data intelligently is associated with better business performance?
In a recent article in Harvard Business Review, the authors asked themselves: “Where’s the evidence that using big data intelligently is associated with better business performance?” They then set out together with a team from MIT to interview more than 300 public North American companies to test the hypothesis that data-driven companies would be better performers. And the results were clear:
The more companies characterized themselves as data-driven, the better they performed on objective measures of financial and operational results. In particular, companies in the top third of their industry in the use of data-driven decision making were, on average, 5% more productive and 6% more profitable than their competitors.
So what are we getting at? Big data is already helping many successful companies optimizing their businesses. But, before you jump on it too, make sure to structure and understand the data you already have. Data, big or small, is not smart unless you understand how to analyze and make use of it. And being smart is almost always better than just being big.
Is your company ready for Big Data? Take the test on Harvard Business Review to find out (subscription needed).
About Inquentia Group
At Inquentia Group we help our clients identify, explore and develop attractive business opportunities based on market and customer insight and a thorough analysis of your current market situation. Our approach helps creating team involvement and the foundation for effective implementation and change. Please contact us for an open dialogue on how we can help your and your company face the challenges of growth.
Sources and reading:
Big data: A revolution that will transform the way we live, work and think (Eamon Dolan/Houghton Mifflin Harcourt)
We identify, explore and develop opportunities for growth and renewal, powering the future of our clients’ teams, brands and businesses. Always from a market and customer perspective. In the process we help create time for reflection, train, guide, coach and involve our clients’ teams to utilize their skills and develop their capabilities, resulting in ownership and faster implementation