Big data – the collection of data sets, now so large it makes it difficult to process them using traditional data processing methods – is a term that many marketers have become concerned about lately.
Capturing, storing, sharing, curating and visualizing this data becomes nearly impossible using traditional methods such as spreadsheets or analytics solutions.
The exponential increase in data means, big data has become key in competing and growing a business. Due to the enhanced insight and decision making potential it provides, leaders in every business industry have to understand the implications and how to use big data, not only to get ahead of the competition, but to drive business efficiencies and increase profitability.
McKinsey Global Institute has studied big data in five different domains including the European public sector, healthcare and retail in the United States and global based personal location and manufacturing data. Big data has shown to be effective in generating value in all of these domains. Retailers using big data have the ability to increase operating margins by as much as 60 percent or more. Using big data in the healthcare industry could help to create more than $300 billion every year in value in the United States, according to Mckinsey’s Big data: The next frontier for innovation, competition, and productivity report.
There are basically five ways that big data can help businesses create value. It can unlock value by making information more transparent and usable and at a higher frequency and allows businesses to store their data in digital form, which is much more efficient. Big data usage will provide for growth of productivity as well as consumer surplus. While the actual use will vary depending on the specific sector, all sectors can gain some benefit from big data. Some sectors however, are naturally set for a greater gain.
Computer and consumer electronics for instance as well as government and finance and insurance markets are likely to see a much higher gain from using big data than other industries. Still, all industries can benefit provided they learn how to use big data effectively.
Unfortunately there is a shortage of skilled staff that is needed for companies to take full advantage of big data. Mckinsey Global estimates that by 2018, markets may face huge shortages of people that have the skills and experience needed to handle big data. In the United States alone it is estimated there is already a shortage of nearly 200,000 skilled professionals able to take on the challenges that big data presents. Those working with big data will need the skills necessary to use the analysis to make decisions that will benefit their respective organizations.
A recent article by Itweb points out that South African corporates lag on big data analytics. This was further backed up by a local study conducted by Strategy Worx, which showed that CIO’s within South African companies are not using big data analytics or systems in any substantive way, a clear opportunity to drive value in the local market.
This will not doubt lead to big shortages in data analytics skills in the local market as South Africa will need to play catch-up with its international counterparts to maintain competitiveness.
There are a number of issues that must be addressed before businesses and marketers can fully capture big data’s full potential. Any policies that are relevant to liability, privacy and security and/or intellectual property will need to be fully addressed before big data can offer its benefit. Companies will need to ensure they have skilled people working for them and that they have the technology needed to fully capture the benefits of big data. Being able to access data is of course, an important factor to consider.
Businesses will need to be able to integrate their data from a number of different sources, including third parties, so there will need to be certain steps taken to ensure that this is a feasible process. Again there are certain industries that will benefit more from the use of big data. The healthcare industry is one of them.
The United States healthcare system has four main data pools that include clinical, patient behavior, medical products and cost. Each of these pools of data, is captured by a different electorate. The healthcare system will find big data to be extremely beneficial with regards to capturing and managing this data and will likely see a major boost in productivity, provided they use a combination of data from a number of different sources.
Properly managing and implementing the practices of big data will create benefit not only for the industry but for its patients as well. Patients will have better access to information regarding healthcare so they will be much more informed than they are today. They will be able to better compare the prices of drugs and treatment options, compare physicians and choose better paths of treatment for themselves. Big data then is not just something that is beneficial to markets and marketers but to consumers in many ways as well.
Closer to home, government services are one area where data and analytics need to come together to not only improve service delivery but to lower the costs of government services. Mobile phone usage is ubiquitous in the local market and integrating, analysing and understanding the usage, behavior and needs of this market in more detail will open up many more opportunities beyond government and into the private sector.
It is clear that in the world of marketing communications, data and analytics is becoming an increasing focus of competence, as pointed out in a Harvard Business Review interview in March this year with Sir Martin Sorrell where he stated that “Our competitive set is no longer Omnicom and IPG and Publicis. It is Nielsen and GFK. It’s the data companies.”