August 27, 2013

Big Data's Big Impact


Hostway Team

bigdata“Big Data” – The term might conjure an image of downward-scrolling characters from the Matrix movies, or of room-sized computers from 40 years ago. But what Big Data means in its modern context could have a significant impact on your business.

Fueled by algorithmic advances that have yielded affordable software alternatives, Big Data analytics are becoming more accessible to smaller businesses. Since expert researchers are no longer required to generate recommendations from the analysis, more companies are leveraging the technology.

The most common use of Big Data is trying to determine customer behavior through predictive analytics. The “Big Data” in this usage in mined in the fashion you’re most familiar with – many popular websites try to target customer subgroups by monitoring buying and browsing behavior.

Again, this ability used to be the domain of only large, well-funded corporations, because the necessary data analysis for characterizing consumers requires extreme hardware resources. But as CPUs and processors become capable of handling greater volumes of data, and new algorithms improve the efficiency of the process, the list of Big Data’s potential users grows.

Different companies find different ways to put predictive analytics to work. An e-commerce firm might use the data to identify up-selling or cross-selling opportunities. Pigeonholing a consumer into a group displaying similar activities allows a website to make a good guess at what ads or offers are best to present to that consumer.

Is Facebook getting better at presenting you relevant advertisements? This is the application of Big Data at work – a much less hit-or-miss method of luring in consumers. More research yields more knowledge.

Predictive models using Big Data are also being used in companies’ decision processes. As explained by Target Data’s EVP Scott Bailey in a late July piece in Forbes Magazine, a business may try to simulate a tactic change to determine its potential success or failure. An article at IT Pro Portal discusses risk mitigation using Big Data, where real-time transaction analysis quickly red-flags suspicious items – Big Data provides more indicators to decide if any transaction should be suspected of being fraudulent.

So how can Big Data be put to work for you? Here are a few ideas:

  • Evaluate not just your own performance, but also your competitors’. What do they do differently? Why are some customers going to them instead of to you?
  • Trends change quickly, but Big Data counteracts that by compiling a huge volume of information as things change. Adapt faster if the data suggests acting.
  • Predict the outcome of applying new strategies instead of learning the hard way. Make strategic decisions more on modeling than on instinct.

Now cost-effective and simpler to attain, Big Data is producing more and more refined metrics and insights. See what Big Data’s all about – do yourself and your business a favor.

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