What Is Big Data and Why Is It Important
Many people have heard the term “big data” in the business world but may not know what it means. It’s defined on Investopedia as “large, diverse sets of information that grow at ever-increasing rates.” But what does this mean, and why does it matter to businesses?
Every day, organizations produce an enormous amount of data. But processing it is a different story. Ultimately, what matters is what businesses choose to do with that data. In other words, how do businesses parse the information and find the value in it to make better business decisions?
The history of big data
The term “big data” goes back more than 50 years. Here’s a brief history:
- In the 1960s and 1970s, the first data centers opened and started collecting information.
- Social media sites and online platforms such as Facebook and YouTube became hubs of data as businesses started realizing how much user data was generated.
- Internet of Things (IoT)-connected devices revealed further swathes of user data that could be used for business advantages. Information on user patterns can be deduced from the data collected by these devices.
Businesses everywhere are leveraging data to improve how they operate. The goal is to find what matters within the data, which can be difficult if you don’t know where and how to look.
The three Vs of big data
Traditionally, when it comes to big data, three Vs are mentioned: volume, velocity, and variety:
- Volume: There are several areas from which businesses collect data, including business deals, social media, smart devices, video, and more. It is now easier to store large volumes of data from these sources thanks to the creation of open source frameworks such as Hadoop and Spark, which are designed specifically to store large amounts of data.
- Velocity: Data arrives at a rapid pace these days, which means information needs to be handled with the speed to match that pace. Dealing with data in real time is now a reality thanks to technological advances such as RFID tags and smart meters. Again, the goal here is to have technology capable of handling big data the right way, ensuring your business can make the best out of these large swathes of information.
- Variety: Unstructured data comes at your business in a number of ways, ranging from emails to documents, audio and video files, and beyond. Being able to handle a variety of data is as important as handling large volumes and high-velocity big data. Software solutions, such as the IQ Bot, can help.
Benefits of big data
If leveraged properly, big data can help you:
- Acquire and retain customers: One of the great benefits of having technological tools designed to help your business parse big data is using it to increase the size of your customer base. Companies can use big data to learn what customers want. With this information available, businesses can better identify customer behavior patterns and create more personalized online experiences – including shopping, search results, information about nearby events and activities catering to a user’s interests, etc.
- Target ad campaigns: The days of ad campaign guesswork are gone. By better measuring customer trends with big data, businesses can create ads that are more accurate and targeted to customers. This tool can help increase customer loyalty rates.
- Innovate: In addition to attracting and retaining new customers, businesses that use big data are better poised to create new products and services that meet customer needs. Big data can be used to measure how successful a product is, to gather customer feedback, to look at what the competition is doing, and more. This information can then be used to create new, unique products that are in line with customer preferences.
Big data is essential going forward
There is no shortage of major companies that are utilizing big data to improve business processes, gain new customers, and develop new products. We live in a time where data is king, and knowing how to parse large, unstructured datasets is vital to any business looking to maximize its resources and achieve business success.
In 2020 and beyond, big data will continue to grow in importance as organizations continue finding new ways of growing their profits and improving how they operate.