Big data is one of the most popular buzzwords in business recently, but it is much more than just an empty phrase. More specifically, big-data analytics and tools are poised to transform many different industries by improving marketing, R&D, projections, and several other aspects of commerce.
How does it work?
There is no real definition of what makes a data set big. The use of big datasets is more about a philosophy that places analytics and data-driven insight at the core of making decisions. Whether it’s using patient data to diagnose, collecting consumer data for marketing, or recording sales information to make better forecasts, the basic idea is the same. Data can serve as a powerful tool to help companies optimize their use of time and resources. Moreover, the increasingly cheap and easy access to large amounts of storage and analytical tools means that even small companies can collect and use lots of data.
For example, a small company that relies on its website for e-commerce can collect information about how visitors interact with the site. They can learn about what kinds of people are most likely to make purchases and how different design elements or types of ads affect selling rates. The end result is the kind of deep understanding of their own effectiveness that would have been unreachable without data analytics and that can inform a significant amount of their strategy going forward.
Why use it?
can sometimes be aimless because they do not have a clear goal in mind. The best way to make use of data is to have a defined outcome first, and then use data to solve the problem. For example, the e-commerce company from the last example might have the goal of reducing customer acquisition costs. They can do this by analyzing the effectiveness of all of their ads and reduce spending on the least effective ones. They can also tweak them to make them more effective, so their number of leads increases and cost per customer acquired goes down. If they simply started to collect data about their ads and site without a clear goal, weeks or months could pass before they find a way to get a return on their investment. That can be a problem because in the meantime they have to pay for cloud storage or in-house server storage
of the data and for access to analytical software.
What is the future impact of data use?
Examples like marketing are universal and can potentially alter marketing efforts to make them more efficient. However, the more exciting applications of big-data projects
include specialized concepts like using data to build and improve better self-driving cars or writing much more accurate translation programs. Healthcare is full of potential ways to make better use of patient data for diagnosis, research, prevention, and health maintenance. Better collection and incorporation of data can make weather forecasting more accurate, saving lives and property. The potential for big-data analytics is nearly infinite and it’s just starting to make a difference.