“Early analytics adopters are extending their leadership. If you want to lead, you have to know analytics, and if you want to be on the forefront of analytics, you have to put your arms around Big Data.” [13]
Due to Big Data analytics, companies are able to gain a more complete understanding of their business, customers, products, competitors, etc. which can lead to efficiency improvements, increased sales, lower costs, better customer service, and improved products and services.
Every day 100 terabytes of data is uploaded to Facebook, 230 million tweets posted on Twitter, and 294 billion emails sent. [16] Facebook and Twitter together with Google, Walmart, and Google are good examples of the companies that rely on Big Data analytics as part of their primary marketing schemes as well as a means of servicing their customers better.
Facebook uses Big Data for targeted ads, face recognition, or friend suggestions. Walmart uses radio frequency identification (RFID) tags for supply chain optimization. Amazon has leveraged its Big Data to create extremely accurate representation of what products a customer should buy. Google uses Big Data to judge search results. Twitter performs real time analytics and identifies trendy and emerging topics as they develop. [15]
Recent surveys and studies have proven facts that amount of data has been exploding, C-level executives are aware of crucial role of business analytics, and the companies able to effectively store, process, and analyze big data significantly outperforms its competitors and gains significant competitive advantage.
- IBM/MIT – The New Intelligent Enterprise [13]
IBM’s Institute of Business Value, in partnership with MIT, published the results of a study in a paper called The New Intelligent Enterprise. This paper concluded that organizations that achieve a competitive advantage with analytics are over two times more likely to substantially outperform their industry peers. - IDC – Digital Universe Study [17]
Study predicts that by 2020 global digital content will increase 50 times compared to 2010. - IBM – Outperforming in a data-rich, hyper-connected world [18]
Study shows that organizations using analytics achieve 1.6 times more revenue growth, two times more profit growth, and 2.5 times more stock price appreciation than their peers. - IBM – CMO Study 2011 [19]
Study shows that one third of business leaders make critical decisions without the information they need and one half of business leaders don’t have access to information they need to do their jobs. - McKinsey Global Institute – Big Data: The next frontier for innovation, competition, and productivity [20]
McKinsey & Company showed the growth rate differences between companies that use Big Data and those that do not. The biggest differences exist between online retailers.
Figure 2 Competitive advantage of Big Data companies - IBM – The Essential CIO [21]
IBM CIO study (involving 3018 CIOs spanning 71 countries and 18 industries) says that 83 % of CIOs have visionary plans that include business intelligence and analytics.
It’s hard to overlook the impact that analytics has had on organizations during the last decade. The amount of data in our world has been exploding, and analyzing large data sets is already becoming a key basis of competition, supporting new waves of productivity growth, innovation, and better customer service.
Imagine that you are a retailer who can take all the point of sale and CRM data. Imagine that you can get data from social media and understand what people are saying about your products or services, and even better, what they are saying about your competitor as well. Imagine that you can understand what they don’t like and what they like. Then you can combine all that information and really get the insight and start to understand the spending habits, what are the social relationships, what they really want and appeal to individual taste. This is just a simple example how you can capitalize on Big Data from social media. Some other benefits are shown in TDWI Big Data Analytics [22] report based on responses of 325 respondents (see Figure 1).
Figure 3 Based on 1,365 responses from 325 respondents; 5 responses per respondent, on average.As Jeff Kelly [23] says “Big Data combined with sophisticated business analytics have the potential to give enterprises unprecedented insights into customer behavior and volatile market conditions, allowing them to make data-driven business decisions faster and more effectively than the competition… Make no mistake: Big Data is the new definitive source of competitive advantage across all industries. Enterprises and technology vendors that dismiss Big Data as a passing fad do so at their peril and, in our opinion, will soon find themselves struggling to keep up with more foreword-thinking rivals.”
Bibliography
| [13] | P. C. Zikopoulos, D. deRoos, K. Parasuraman, T. Deutsch, D. Corrigan and J. Giles, Harness the Power of Big Data: The IBM Big Data Platform, McGraw-Hill, 2013. |
| [15] | F. J. Ohlhorst, Big Data Analytics: Turning Big Data into Big Money, New Jersey: John Wiley & Sons, Inc., 2013. |
| [16] | IBM, “The Flood of Big Data,” 2012. [Online]. Available: http://www.ibmbigdatahub.com/infographic/flood-big-data. [Accessed 2 February 2013]. |
| [17] | IDC, Digital Universe Study: Extracting Value from Chaos, IDC, 2011. |
| [18] | IBM Center for Applied Insights, Outperforming in a data-rich, hyper-connected world, New York: IBM, 2012. |
| [19] | IBM, IBM CMO Study 2011, New York: IBM, 2011. |
| [20] | McKinsey Global Institute, Big data: The next frontier for innovation, competition, and productivity, McKinsey & Company, 2011. |
| [21] | IBM, The Essential CIO, New York: IBM, 2011. |
| [22] | P. Russom, Big Data Analytics, TDWI RESEARCH, 2011. |
| [23] | J. Kelly, “Big Data: Hadoop, Business Analytics and Beyond,” 24 December 2012. [Online]. Available: http://wikibon.org/wiki/v/Big_Data:_Hadoop,_Business_Analytics_and_Beyond. [Accessed 1 February 2013]. |