Data is now woven into every sector and function in the global economy, and, like other essential factors of production such as hard assets and human capital, much of modern economic activity simply could not take place without them. The use of Big Data — large pools of data that can be brought together and analyzed to discern patterns and make better decisions — will become the basis of competition and growth for individual firms, enhancing productivity and creating significant value for the world economy by reducing waste and increasing the quality of products and services.
Until now, the torrent of data flooding our world has been a phenomenon that probably only excited a few data geeks. But we are now at an inflection point. According to research from the McKinsey Global Institute (MGI) and McKinsey & Company’s Business Technology Office, the sheer volume of data generated, stored, and mined for insights has become economically relevant to businesses, government, and consumers.
The use of Big Data is becoming a crucial way for leading companies to outperform their peers. In most industries, established competitors and new entrants alike will leverage data-driven strategies to innovate, compete, and capture value. Here are five ways Big Data can help grow your business:
Create new revenue streams
The insights that you gain from analyzing your market and its consumers with Big Data are not just valuable to you. You could sell them as non-personalized trend data to large industry players operating in the same segment as you and create a whole new revenue stream.
One of the more impressive examples comes from Shazam, the song identification application. It helps record labels find out where music sub-cultures are arising by monitoring the use of its service, including the location data that mobile devices so conveniently provide. The record labels can then find and sign up promising new artists or remarket their existing ones accordingly.
Re-develop your products
Big Data can help you understand how others perceive your products so that you can adapt them, or your marketing, if need be. Analysis of unstructured social media text allows you to uncover the sentiments of your customers and even segment those in different geographical locations or among different demographic groups.
On top of that, Big Data lets you test thousands of different variations of computer-aided designs in the blink of an eye so that you can check how minor changes in, for instance, material affect costs, lead times and performance. You can then raise the efficiency of the production process accordingly.
Customize your website in real time
Big Data analytics allows you to personalize the content or look and feel of your website in real time to suit each consumer entering your website, depending on, for instance, their sex, nationality or from where they ended up on your site. The best-known example is probably offering tailored recommendations: Amazon’s use of real-time, item-based, collaborative filtering (IBCF) to fuel its ‛Frequently bought together’ and ‛Customers who bought this item also bought’ features or LinkedIn suggesting ‛People you may know’ or ‛Companies you may want to follow’. And the approach works: Amazon generates about 20% more revenue via this method.
Perform risk analysis
Success not only depends on how you run your company. Social and economic factors are crucial for your accomplishments as well. Predictive analytics, fueled by Big Data allows you to scan and analyze newspaper reports or social media feeds so that you permanently keep up to speed on the latest developments in your industry and its environment. Detailed health-tests on your suppliers and customers are another goodie that comes with Big Data. This will allow you to take action when one of them is in risk of defaulting.
Keeping your data safe
You can map the entire data landscape across your company with Big Data tools, thus allowing you to analyze the threats that you face internally. You will be able to detect potentially sensitive information that is not protected in an appropriate manner and make sure it is stored according to regulatory requirements. With real-time Big Data analytics you can, for example, flag up any situation where 16 digit numbers – potentially credit card data - are stored or emailed out and investigate accordingly