No business can perform well without access to data. This is why companies often spend thousands on getting access to data. But, merely having data is not enough. It is also important to be able to use it.
In this article, we’ll talk about the importance of big data and how it is changing the world around us.
What is Big Data?
Big data can be referred to as large volumes of data. It could be structured or unstructured. Businesses have to deal with a lot of data on a regular basis. Some they select through forms and other such means, and some they get access to during the course of the day.
The term ‘big data’ was introduced in the early 2000s but we have been dealing with data for years. In fact, data was into existence even before computers came into play.
Let’s get started:
Big Data Stats: The Power of Big Data
Here are some stats to highlight the importance of big data in today’s business environment:
- The big data analytics market is expected to hit the $103 billion mark in the next four years.
- The market is said to be growing at a rate of 20 percent, making it one of the fastest growing markets out there.
- According to reports, each user generates about 1.7MBs of data every single second. This equals to more than 2.5 quintillion bytes of data every 24 hours.
- Data generation is increasing at a rapid rate. In fact, about 90 percent of all available data has been created in the last three years.
- It would take you more than 181 million years to be able to download all the data available on the internet.
- The huge number of data makes it impossible to analyze everything at our disposal. This is why we could only analyze 0.5 percent of available data in 2012.
- Social media plays an important role in generating data including information businesses can use to target customers.
Types of Big Data
Big Data is found in three forms:
- Structured: It’s an organized form of data. This type of data is easier to analyze.
- Unstructured: Unstructured data can be named as unorganized data and cannot be stored in a definite format such as videos, audio files.
- Semi-structured: Semi structured is a form of data that does not conform to the formal structure of data. Examples include log files
The Five V’s of Big Data
Here are the five V’s of big data:
- Volume: Volume refers to the amount of data received that needs to be handled.
- Velocity: Velocity is the speed at which we receive and process data. How quickly we gather and process data depends on a number of factors including the type of data and available resources.
- Variety: We find data in different formats including photos, audios, videos, messages, and even text files. Different forms of data are used for different purposes.
- Value: Most tools will require you to assign a value to the available data to make processing easier.
- Veracity: Veracity refers to the unpredictability and errors found in data and resources. This is a common problem as missing values and other such issues can lead to incorrect data.
Jumping the Bandwagon
Companies are now willing to invest in data. According to reports, about 97.2 percent of businesses are investing in big data.
The industry generated a revenue of $42 billion in 2018. The amount is expected to hit $103 billion by 2027, growing at a rate of 10.5 percent.
The Chinese market is said to be one of the fastest growing markets. It has a CAGR of 31.72 percent. The market is predicted to hit the $9 billion mark by 2020. This is a huge figure as the industry was only worth $1.2 billion in 2014.
Thanks to more and more companies now jumping the bandwagon, the demand for big data software is also increasing. Stats show that adoption can help increase sales by up to 4 percent.
The demand for such software is very high in the retail sector. Experts believe the market will reach $46 billion in the next eight years, thanks to a CAGR of 12.6 percent.
But, why are companies interested in using big data and how can it solve our problems? Let’s talk:
Why Is Big Data so Important?
It is very important to understand that it’s not only about having data. It’s about being able to analyze and use the information in the right manner.
- Better Decision Making: Businesses can use data to make educated decisions regarding business and clients. They can use data to know exactly what customers want. Plus, they can even use data to know what their competitors are up to. Without data, businesses will never be able to come up with unique concepts or cater to the growing needs of customers.
- Cost Reduction: Data allows businesses to get more out of everything. As a result, they enjoy more profits. This is especially true when we consider the role of AI in big data. Computers and apps can analyze data and help businesses make decisions to improve ROI and enjoy higher returns.
- Happier Customers: Big data allows companies to cater to customers in a better manner, thus offering improved customer service. There are a variety of CRM tools that use data to meet customer demands and keep customers loyal. In fact, some reports say that the right data can help companies retain clients, which is said to be more important than winning new clients.
How Big Data Is Helping Businesses – An Example
Netflix, one of the largest streaming platforms out there, credits big data for helping the company save over $1 billion per year on customer retention.
The company has a unique strategy to prevent subscribers from canceling packages. The company collects a lot of data including ratings, preferred programs, and searches. This information helps the company pick programs subscribers want to pay to watch.
Plus, it also has a ‘recommended’ section that gives suggestions to subscribers based on their watching habits to keep them hooked. Moreover, some reports suggest that the company’s ‘Continue Watching’ feature also plays an important role in improving the overall user experience.
The company was in the news for investing $1 billion in 2009 to improve the recommendation algorithm. The trick worked and it started to invest more in the technology sector, causing the development budget to hit the $1.3 billion mark in 2018.
Even YouTube uses a similar system to give suggestions.
Big Data Concerns
Here are some possible big data issues:
- Data Privacy: Big data includes a variety of data including personal data. Companies cannot afford to let this private data reach unsafe hands. Due to a growing number of hacking incidents, this has become a major challenge for both big and small businesses.
- Data Quality: As mentioned earlier, unstructured data can be quite useless. Businesses need tools to clean data so it can be used. There are a number of software you can use for this purpose. If you’re looking for a data cleansing and matching software then consider WinPure Clean & Match Enterprise. It can take care of a variety of data-related issues to ensure you get reliable results.
- Analytical Problems: It can be quite difficult to analyze and understand data. Companies usually count on data managers and data scientists to do the job. If you cannot afford to hire professionals for master data management then it is important that you at least invest in a reliable tool so that you can put the available data to good use.
Related Reading: 2021 Master Data Management Guide
It can be concluded that big data is very important for every business. Whether you own a small company or a multinational firm, you will need data to make the right call.