The hype around big data has triggered industry wide debate over the value it holds for businesses. CEOs remain sceptical about the benefits that big data poses to their bottom line. The popularity of social media and mobile devices are contributing to the data deluge and this has led to a shift in the way both consumers and businesses interact with data. We are now seeing an explosion of information, with different types of data being stored in the cloud and across disparate systems, which we call “big data”.
When it comes to customer information, big data is made up of data gold dust. Information on peoples’ buying habits, lifestyles and views has never been so accessible for businesses, however, with so many places to search, locating and integrating this data with a businesses’ core IT system can be extremely difficult, and appear near impossible.
Independent analyst house, IDC, predicts that in 2012 the volume of digital content will grow to 2.7ZB, up 48 per cent from 2011, and will rocket toward nearly 8ZB by 2015. In terms of big data, IDC predicts that over 90 per cent of that data will be unstructured (e.g. images, videos, MP3 music files, and other files based on social media and Web-enabled workloads). As IDC rightly points out, this data is full of rich information but challenging to understand and analyse. (IDC Predictions 2012: Competing for 2020)
The challenge for businesses is not how to manage the sheer volume of data being created, but how to manage the different dimensions of data for effective analytics in order to tap into its value, and gain a real return on their data.
The art of communication
As people become increasingly indulged in social media and their mobile devices, being able to communicate with customers via their preferred platforms and on a level that resonates best with them, will not just be a means of securing a competitive advantage for businesses, but standard practice.
People are becoming more interactive by nature, and expectations are rising when it comes to customers expecting brands to engage via new social media platforms, whether it’s a customer looking to find out more about clothing promotions or a company looking to discuss its data security challenges.
An integral part of making this new dialogue work is the speed at which businesses can respond and interact with customers, as well as their ability to use their understanding of the customer to generate and maintain a good relationship.
Cost effective and efficient data management systems are available to search, find and integrate big data. Businesses no longer need to question whether they should be looking at big data as a method for building better relationships with customers, but at the tools and approach needed to manage it to derive a return on their investment.
What’s in it for the business?
Agile data management technology can help businesses to pull together big data from a number of different systems, while at the same time reducing the cost of data ownership. The likes of Master Data Management systems can integrate and migrate data from a number of different silos, including the cloud, enabling businesses to access accurate and up to date information across the whole organisation. To gain true value from big data, it is paramount that businesses pull together this disparate data automatically and present it in a way that makes sense to the organisation, for big data analytics.
By joining the dots between different data sets businesses can create a single view of the customer, which can provide businesses with valuable insight into their customers’ individual needs and enable them to identify how best to interact with customers as individuals. We are already seeing a number of organisations using big data to provide a more personalised customer experience, and to anticipate what each customer is looking for based on their habits and voiced attitudes via these new communication channels.
By effectively managing big data, businesses can realise benefits such as improved customer engagement, increased cross-sell and upsell, and first hand insight for anticipating customer trends and behaviour. In this way big data provides a real opportunity for improved customer retention, which is of critical importance to the success of more mature businesses in particular, like insurance providers and mobile operators.
Further still, a single view of customer data can help businesses identify areas for growth. The potential of big data and the new dimensions that it presents are so great that if managed effectively it will have a significant impact on an organisation’s operating margin.
McKinsey predicts that the use of big data will underpin new waves of productivity growth and consumer surplus; estimating that a retailer using big data to the full has the potential to increase its operating margin by more than 60 per cent.
The way consumers interact with data has changed dramatically and organisations need to adapt with this change, not only to make use of this rich information and to meet consumer expectations for a more personalised service, but to identify new selling strategies and areas for growth. Big data will be the new life blood for businesses in the future and as CEOs become more strategic in how they use data management systems to capture this big data we can expect to see a clear divide between those that do this effectively and those that fail to meet the mark.