By: Rick Brattin
If you follow trends in business, you’ve probably heard the term “big data.” Just as “business intelligence” was viewed as a path to great competitive advantage in the 1990s, so too is “big data” in the 2010s. Interestingly, both have essentially the same goal when used within a business context: to discover actionable insights that help companies provide products and services their customers want, when they want them. Why so much fuss? Have things really changed so much in the last 20 years to warrant the hype and excitement surrounding big data? To many, myself included, the short answer is yes! But why? A quick search of the popular business press yields many examples of companies leveraging big data for competitive advantage. What has fueled the sudden explosion of interest in big data? In future articles I will discuss what big data is and, more importantly, why big data matters to our relentless pursuit of competitive advantage. First, we ask the question, what makes today’s data ‘big’? Part of the answer lies in the evolution of data sources over the past several years.
The 1990s: Much of the business data available for analysis was captured as a company executed its business processes. Business software created data to represent various business activities and transactions. Analysis of this data provided insight into sales patterns and operational inefficiencies and began to help companies infer the wants and needs of their customers. From the 1990s to today, advancements in both data technologies and business software enable companies to create, store and analyze tremendous amounts of business data.
The 2000s: Rapid growth of Internet usage provided new sources of data for analysis. Social media sites such as Friendster, Facebook, Twitter and Foursquare enable friends to stay in touch with each other and to carry on group conversations. LinkedIn helps people communicate within their own network of business contacts. Content hosting sites including Flickr and YouTube enable people to share their own images and videos with others. Publishing platforms, such as WordPress, assist people with managing personal blogs. Review sites such as Yelp allow people to provide feedback on local businesses. No one knows exactly how many of these sites exist, but they all contribute to the rise of big data. Through social media data, people express feelings and state opinions to others who are interested. By analyzing this data, companies can get a better sense of consumer wants and needs and identify groups of people with similar interests.
The 2010s: The term “Internet of Things” represents networked devices embedded with sensors and software, creating and exchanging data either through direct communication with each other or with people. Home security systems communicate directly with security providers, alerting them to break-ins and other threats such as fire and floods. Many automobiles communicate electronically with their owners and manufacturers, alerting them to service needs and assisting with navigation. In the near future, automobiles will communicate directly with other automobiles around them to improve travel safety. New home entertainment devices such as TVs, gaming systems and tablets share content and can collect viewing information. Device data is different — it can represent actual behaviors of the people using the device, making a great source of insight into what is important to consumers.
So back to the original question, what makes today’s data “big”? One important consideration is the availability of new data sources today. According to internetworldstats.com, there are almost 3.4 billion Internet users worldwide, many who are active social media contributors generating valuable data through online posts and website visits. That is almost half of the 7.3 billion people on the planet. Furthermore, the number of connected devices continues to grow at a rapid pace. Cisco Systems, a leading networking technology company, estimates there will be 50 billion connected devices by the year 2020, each generating data about their usage. Businesses, people and devices are creating more data than ever before. How much data? I will tackle that question next time. For now, understand that much of the hype and excitement surrounding ” big data” is due to the potential of these vast sources of data that can help businesses understand the wants and needs of their consumers.
Dr. Rick Brattin is an assistant professor of Computer Information Systems at Missouri State University. He has 25 years of experience in data analytics, business intelligence and information governance with Fortune 100 companies. Email: firstname.lastname@example.org.
This article appeared in the February 20th, 2016 edition of the News-Leader and can be accessed online here.