BEST PRACTICE
Why every business is now a data business
by Bernard Marr, best-selling author, keynote speaker, strategic performance consultant and analytics, KPI and Big Data expert.
I
n business, information is power. Big data is providing information we couldn’ t have dreamed of collecting or analysing just a few short years ago. Companies that don’ t evolve or embrace the data revolution will be left behind.
That’ s why every business is now a data business.
There’ s no doubt that big data and its implications will affect every single business— from Fortune 500 to small businesses— and change how we do business, inside and out. It doesn’ t matter what field you operate in or the size of your business; as data collection, analysis and interpretation become more readily accessible, they are having an impact on every company.
The Data Revolution The numbers are mind boggling:
• Every two days we create as much data as we did from the beginning of time to 2003.
• According to the International Institute for Analytics, businesses using data will see $ 430 billion in productivity benefits over competitors who are not using data by 2020.
• By 2020, the amount of digital information available will have grown from about five zettabytes today to 50 zettabytes.
• International Data Corporation predicts that half of all business analytics software will include prescriptive analytics abilities by 2020( software will be able to predict customer or user actions and also make specific recommendations based on those predictions).
• Machinetomachine connections with grow to 27 billion by 2024.
What does this mean for business?
Data is changing our world and the way we live and work at an unprecedented rate. Almost every action we take from browsing online and paying with credits cards at brickandmortar stores to sending emails and taking photographs leaves a digital trail. We are existing in a brave new datadriven world.
The term“ big data” refers to the collection of all that data and our ability to use it to our advantage across a wide range of areas, including business. While this term focuses on the volume of data we have, it doesn’ t matter how much data you have, it’ s whether you use it successfully that counts.
The Explosion of Big Data Big data knows a lot about you. Google knows your age and gender, they have a comprehensive profile of you and your
60 www. businessfirstonline. co. uk
interests. Facebook knows more than who your friends are. It can predict whether your relationship is going to last and also analyses your“ likes” to tell how intelligent you are.( For all of you inquiring minds: curly fries, science, Mozart, thunderstorms or The Daily Show predicted high intelligence, while likes for HarleyDavidson and Lady Antebellum predicted low intelligence).
From networked security cameras to store loyalty card programs, big data’ s influence stretches to almost every aspect of modern life from healthcare to space exploration to our political elections.
Big data is powered by the information explosion made possible by the Internet of Things( IoT), basically everyday items that collect and transmit data via the internet and includes things such as your smartphone and your smartwatch to your TV and refrigerator.
Today, there are about 13 billion devices that connect to the internet. By 2020, that number is predicted to rise to anything between 50 and 70 billion. Smartphone users alone are predicted to number more than 6 billion by 2020.
How Do Businesses Use Data to Gain a Competitive Advantage?
There are five core areas where data really matters to business. Data helps companies: 1. Improve decision making 2. Understand customers in a deeper way( who they are, why they are buying, where the market trends are going, etc.) 3. Deliver a new value proposition to customers 4. Improve and automate business processes 5. Create a new revenue stream when data is monetized( build big data into their product offering) Most companies start by leveraging data to help them improve decision making.
It’ s clear that data is becoming an essential business asset, central to the success of every company. As the world becomes smarter and smarter, data becomes the key to competitive advantage.
A company’ s ability to compete will increasingly be driven by how well it can leverage data, apply analytics and implement new technologies.
Data Strategy Critical for Success
In order to thrive, business leaders will have to actively work to expand their thinking away from what has been traditionally done, and include ideas and systems that may never have been considered.
Since every business, regardless of size, is now a data business, every business needs a robust data strategy.
Companies who will really profit from the explosion of available data will be the ones that have learned to think smarter about the data and what to do with it. It’ s not just about collecting vast amounts of data, but finding innovative ways to build your business.
The way for companies to avoid drowning in data is to develop a smart strategy that focuses on the data necessary to achieve the business goals.
It is imperative for every company to commit to collecting and analysing the massive data that’ s now available to propel their business. Those that don’ t, won’ t survive.
Bernard Marr is a bestselling author, keynote speaker, strategic performance consultant and analytics, KPI and Big Data expert. His new book Data Strategy: How to profit from a world of big data, analytics and the Internet of Things is out now, published by Kogan Page, priced £ 19.99