In today's business world, it is hard to read an article about sales and marketing strategy without seeing something about the Big Data revolution or analytics. We read about how 2.5 quintillion bytes (that’s 18 zeros) are produced daily, Google conducts 2.4 million searches every minute and 330 billion emails are being sent each day in 2022. But what does that mean for businesses that are not the size of Amazon or Google?
It’s important to first understand the dimensions of Big Data. A popularly held view, one to which industry leaders such as Amazon, Google and Oracle also subscribe, holds that Big Data is composed of three dimensions: volume, velocity and variety.
Let’s break down each of these areas:
This refers to the magnitude of data generated. But it is important to note that the sheer volume of data should not be confused with Big Data. For example, we mentioned earlier that Walmart collects 2.5 petabytes every hour. What if we just had one hour of that data? How useful would that be? The processing power needed to store and compute this data can be astronomical.
This refers to how quickly the data is generated. While the numbers we see for Facebook, Walmart and Google seem incomprehensible, consider your business. On a given day, how many customer-related activities occur? Beyond transactions, consider customer service calls, website interactions, email exchanges and social media activity. With the Internet-of-Things and connected devices, the amount of data collected on a daily basis continues to grow at an exponential rate.
This refers to the different types of data sources, any of which can fall in different spots on a “spectrum of structure.” Structured data is probably what comes to mind when you think of data in your current organization’s reports, such as scanner or sensor data, databases, customer records, etc. On the other end of the spectrum is unstructured data. This includes textual data, such as social media or customer reviews, as well as non-textual data, including things like phone calls, videos and images. The challenge for many organizations is figuring out how to leverage this data in a consumable manner so it can be analyzed and used to support decision making.
While your organization may not fall into the category of Big Data right now, it does not necessarily mean it won’t in the near future. Consider if your organization started collecting customer reviews and social media data. You would then be collecting more data (volume) continuously (velocity) and from multiple data sources (variety). Thus, it is important for companies to prepare themselves to be able to organize and analyze that data, in real time, to support front-office decision making that drives the top line.
It starts with mobilizing your company’s resources. Companies have a multitude of resources, but there are three key resources for converting data into insights, which requires investment to be successful.
Think of physical capital as the technologies your company will use to collect, store or analyze your data. Even though we call this “physical” capital, the largest trend in data is moving to the cloud, not purchasing or renting physical servers. The cloud allows the customer to scale resources as needed as the business grows. Cloud databases also provide enhanced security measures, data replication and low-cost maintenance.
Investing in technology alone is simply not enough. Companies must invest in human capital, such as data scientists and strategists who are armed with skills to extract insights from the data you gather. Think of this as your analytics team, which acts as a middleman between the data and your decision makers. This team will help create data-driven strategies across the board, from operations to sales to marketing.
This is related to the structure of your organization. Your company may need to alter organization and business processes to act on the insights generated from your data. There needs to be buy-in from upper management and front-line decision makers. Unfamiliarity or a lack of trust often leads to managers ignoring the insights analytics provide.
Now let’s suppose your organization crosses these off — what can you expect to happen? Will analytics bring about radical changes that will take you immediately to the top? Maybe, but highly unlikely. Most evidence suggests the primary benefit of analytics is that organizations can make better decisions, faster. This can lead to better results over time — as seen with Southwest Airlines’ use of speech analytics tools to assist their service personnel, or Netflix using viewer preferences to craft new TV shows. While your organization might not be to that level quite yet, it is never too early to start preparing.
Contact Jason Jones at jrjones@cohenco.com or a member of your service team for further discussion.
Cohen & Co is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.