Big Data and the shift on decision making model

Take a minute and think on what would be the recipe of innovation. Perhaps, a drop of disruption, a teaspoon of proactivity, a handful of discipline and knowledge and a pinch of experience and intuition. Then, it comes the chief’s secret: data.

You have to agree that data is everywhere. It appears from e-mails, videos, documents and infographic and, also, from a more structured way. Coming from various sources and different formats, this all represents what is called Big Data.

The concept of Big Data is not new, but it was in 2000 when Dog Laney, a famous analyst, explored deeper the definition by working on three pillars (the three Vs):

• Volume: data is collected from various sources as social networks, trade and transactions etc;
• Velocity: data travels fast and should be treated in real time (or close to it);
• Variety: data is generated in different formats.

The topic has been strongly discussed specially because the volume of data created and collected, in structured and unstructured way, has increased exponentially (note: structured data are usually found in relational database and the unstructured ones are on e-mails, videos etc.)

This argument, as you can imagine, creates business opportunities. However, it has also a counter side, because this increasing volume can also bring harm.

Pros and Cons of Big Data

The equation is simple: with more data on hand, more information you have to make decisions. Therefore, the chances that these decisions would bring positive results to your company would increase as well, right? Undoubtedly, Big Data provides a precision dose to strategic, tactical and operational decisions that we find in a business environment.

In other words, you could imagine that you have, in your hands, precious information about the buying habits of consumers. Moreover, with that information you could come up with a tailor-made target strategy for your customers. That said, it is unquestionable that companies with the capabilities to collect all this data are armed with the tools to conduct deeper consumers’ analysis.

Important to pay attention when it was said, in the last paragraph, capabilities to collect data, because, in order to take advantage of the Big Data age, it is needed not only that you collect the data but also to know how to use it. Better analysis is important, but Big Data can overload companies that are not ready to organize this volume of information.

Thus, firstly, it is needed to make a distinction between what is useful and fuss. Secondly, the information needs to be analyzed and interpreted. Therefore, it is by not taking these two steps that Big Data can be harmful to unsavvy companies.

Big Data - a essential ingredient to decision making

Every department in an organization can benefit from data analysis. Big Data goal is to arm managers with information that help them on the decision making process. In other words, it represents the end of decisions been made based on guessing.  

Here, let’s approach deeper the concept of Big Data. It could be said that it is related with information collected from traditional and digital sources, obtained internally and externally. So to say, Big Data represents a valuable source for discovery and continuous analysis which brings us to innovation.

At the beginning of this article, it showed the recipe of innovation. On this cookbook, data was seen as chief’s secret. It was done this way, because many believe that innovation is related to gut feeling, however, this idea has been changing towards an era of innovation based on data.

Competitivity and fast pace of change on the market do not give companies much time to restructure after a bad decision. Or, in a worse scenario, the company, after staying inert while information was not been analyzed, has turned blind on what is ahead.

The importance of observation

In 2013, the CEO of Nokia said the following “we didn’t do anything wrong, but somehow, we lost”. This happened on a press conference when he communicated the acquisition of Nokia by Microsoft.

Now, you may ask “what this has to do with Big Data?” and the answer is a sounding “everything!” The information about the market shifting was available to executives. They could had watched the trends, created a new product portfolio or whatsoever, anything, they could had innovated. However, as history shows, they remained arrogant and idle.

For that, to collect information is not enough for a software company. To run a CRM, Business Intelligence, to make a market research, to monitor social networks, to have a help desk, to improve Customer Service and so on, would help the organizations to possess data, but I cannot emphasize enough the need to have the human capital to interpret this information, so they can make sense out of this data.

Besides that, Big Data is everywhere. This means that, it is not only about information arriving at your business. The age of information is also about the content out there, lost in the wildness of the market.

This means that it exists a even bigger source to extract insights than from previously imagined scenario. Although, again, it is useless to have but not know what to do with them.

Closing

Undoubtedly, Big Data represents a new age on decision making and competitiveness. It is essential that the business environment gives the topic its due importance, because to make decisions data based means to lower risks and costs and to improve chances to innovate. Thus, you need to not only collect information, but also know to interpret it.

How about you, what is your opinion on the subject? How do you see Big Data? If you would like to discuss further, here is my contact on LinkedIn. Feel free to share this article with your friends and colleagues.