The business value behind the big data buzz
Big data is without a doubt the latest industry buzzword, and like all buzzwords it is the subject of much debate, misunderstanding and hype. While harnessing big data may provide advantages and something of a competitive edge in certain circumstances, the reality is that not all organisations need it, and often the technical challenges of harnessing, storing and analysing this data outweigh any potential benefits at present.
Understanding exactly what big data is…and is not, linking this in to the business strategy of an organisation, and finding the right way of harnessing the information this data contains, are key in avoiding the hype and finding the real business value behind the buzz.
The first thing that organisations need to understand about big data is that the term does not refer solely to volume. The data explosion is one factor to be considered, but sheer volumes of business data do not present additional challenges to existing analytics and storage solutions. Big data refers not only to data volume, but also data velocity, or the speed at which data is generated, the variety of data generated, and the unstructured nature of much of the data and its sources, particularly from social media.
These factors all add up to increased complexity when it comes to gathering, storing and above all analysing data, as traditional software and tools simply are not equipped to deal with it.
From a storage perspective, big data does indeed mean that if organisations want to use this data, they will need to store masses of additional information, which comes with corresponding cost implications. Ultimately, however, the issue is not so much with the storage of this data, but rather with its analysis. In order to analyse big data, software and tools need to be able to draw information from data sources (such as video, Twitter feeds and other unstructured sources) that are typically not supported by traditional tools.. Trying to find relevant content and analyse it in a meaningful way requires tools other than traditional business intelligence.
Organisations also need to ask themselves one very important question: do I need big data? The major benefit of analysing such data is to gain a better insight as to how a brand, company or product is perceived in the market from various perspectives, as social media information is unsolicited, which makes it more honest and accurate than typical survey data. This data is also useful to help tweak positioning based on market perception, run more effective marketing campaigns, and gain more effective customer insight.
However the reality is that not all organisations need this information for the effective running of their business. Big data has benefits in a business to consumer market model, particularly with regard to large customer base enterprises such as retail and banking. The cost of gathering and analysing the data needs to be weighed against the benefit that this will provide, and in truth the cost currently outweighs the value received in many instances. At the end of the day, data must add business value, otherwise it is an unnecessary expense to analyse it, and big data is no different.
When it comes to harnessing the benefits of big data as well as decreasing the complexity involved with this, the cloud offers the ideal solution. Cloud-based outsourced aggregator services for big data are able to leverage economies of scale by offering big data analysis to multiple organisations, which means that specialised tools and software can be used that are designed for this purpose.
For enterprises using this type of service, they will gain a snapshot overview of market perceptions on social media, rather than a granular view of each and every insight. This means that organisations do not have to pull in and store endless data from multiple sources, reducing the need for data storage. It also means that general sentiments can be gathered rather than individual views, which in the case of big data makes this information meaningful and relevant, so organisations can actually use it to gather insight. These solutions are gaining traction, but it is still very early days for big data and there is no doubt we can expect growth from this market space.
At the end of the day, big data, like any data, needs to add value to a business. While there are tools and services emerging to help organisations deal with the vastness and complexity of the data, if the analysis of it will not deliver business value in line with strategy, then investment into the hype will not deliver returns. Before jumping on the big data bandwagon, organisations should first ensure that their data excellence strategy supports their business needs, and then use this as a starting point to understand whether the cost of big data outweighs the potential benefits. Businesses should always be driven by the goal of creating shareholder value, an initiative that data should support.
If data is not delivering value, it is irrelevant, and big data is no different.
Gary Allemann, MD at Master Data Management