As with all technology that gets caught in top billing as the next big thing, mining big data to unearth its secrets won’t be the silver bullet for every company for every problem today or even tomorrow.
But when big data “grows up,” it definitely will have a major impact in many areas, specifically enterprise BI, government applications and customer relationship optimization, according to Alistair Croll, a founding partner at startup accelerator Year One Labs and an analyst at Bitcurrent.
For decades, analysts have been using business intelligence tools to crunch large amounts of data and answer straightforward questions like: “What are each sales representative’s sales for the month?” But these tools have struggled with predictive analytics that ask the “what if” questions that can help guide company strategy, Croll says.
“The availability of cheap, fast computers and storage, as well as open source tools, have made it okay to capture first and ask questions later,” he adds. “That changes how we use data because it lets analysts speculate beyond the initial question that triggered the collection of data. What’s more, the speed with which we can get results – sometimes as fast as a human can ask them – makes data easier to explore interactively.”
Data mining is already being used to predict disease outbreaks and understand traffic patterns, but the government will be an even heavier user of big data in the future, according to Croll.
Many cash-strapped states and municipalities are struggling to find ways to do more with less, and big data – combined with citizens armed with smartphones that can consume municipal apps and generate mobile data to fuel additional apps – can allow government to more efficiently connect with citizens.
State government should be preparing now to invest in the analytics tools needed to make the best use of big data to improve decision making and services, according to a new report by the national Association of Chief Information Officers.
Many state agencies haven’t fully exploited the big data that’s flowing into their networks because they’re still being run as disparate islands of information rather than integrated enterprises, the report notes.
The third frontier for the application of big data – once the hoopla subsides – is for marketing professionals to forge new and better relationships with customers, Croll notes.
“The number of contact points in a company has multiplied significantly. Tracking users across all these channels – and turning every click, like, share, friend, or retweet into the start of a long funnel that leads, inexorably, to revenue is a big challenge,” he says.
While much has been made of the potential of big data with regard to online marketing, smartphones will allow retailers to get additional insight into their brick-and-mortar sales as consumers use their phones to check in – and companies can begin tracking wait times in lines, store traffic and other aspects of their retail operations.
And while the big data explosion is driving marketers away from relying on intuition to make decisions, they still have additional steps to take before molding their companies into true data-driven organizations, according to a recent Corporate Executive Board survey of 800 marketers at Fortune 1000 companies.
The vast majority of marketers still rely too much on intuition, the study finds. On average, marketers depend on data for 11% of all customer-related decisions, and they report that more than half of the information they’ve used to make recent decisions have come from their previous experiences or their intuition about customers.