How Big Data Is Changing the World of Business

Big Data

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It is probably safe to say that data has been used to make business decisions since the birth of business. It is not that difficult to imagine the first human who had an animal skin to trade consider the fact it is more needed in the winter and wait until it’s colder to finally trade it.

Some 7,000 years ago, we got the first written records of someone using large sets of data to make decisions. This happened in Mesopotamia where they used this ancient form of big data to keep track of cattle and crops.

Over the centuries, people have used large data sets for accounting and medicine, but these efforts were mostly limited to simply collecting data and the most basic analysis.

Late in the 19th century, the world was finally introduced to the term “business intelligence” in the work by Richard Millar Devens called the Cyclopaedia of Commercial and Business Anecdotes. In it, he wrote about a certain businessman who had beaten his competition by using structured analysis of data he collected.

The Emergence of Big Data

It wasn’t until the 20th century that we really started seeing sets of data large enough to be considered big data. As we became more efficient in collecting it especially since the emergence of modern day computers and the internet, the amounts of data that required analysis grew at unprecedented rates.

Together with big data, business intelligence also developed during the 20th century, as business people and companies realized proper analysis of this huge amount of data could help them make the right decisions.

A number of world’s leading companies got involved in the world of business intelligence and big data, such as IBM whose mathematician Edgar F. Codd first came up with the concept of the relational database, the basic framework for all database management systems, needed to analyze large sets of data.

Over the years, other companies became involved, such as Microsoft who acquired the OLAP technology from a BI company Panorama and later developed their SQL Server technology which is still used to work with huge databases. In 2005, Yahoo! developed Hadoop, introducing a tool for processing even larger sets of data.

Big data arrived.

Big Data Definition

While there is no formal and agreed-upon definition of big data, most experts would agree that big data denotes sets of data that are extremely large, varied in content and updated at a fast rate. They call this the Three Vs – volume, variety and velocity.

Big data is first collected, then organized, then analyzed and then used by decision makers to actually act upon the insights they received from it. It should be pointed out that the usable portions of big data are actually quite small and that most of it ends up as dark data – data that does not get analyzed for various reasons.

Benefits of Using Big Data

Companies who use big data give a number of reasons for doing it and they are perfectly understandable from the point of view of business decision makers.

For one, they say that big data analysis provides them with improved insight into the market. With big data, they can more efficiently and readily discover trends that affect their customers and drive their decisions. They can also notice regular fluctuations in the market which were previously unnoticeable because they were very minor. They can also get a better insight into what their competition is doing on daily, weekly, monthly or yearly basis.

Using data can also make marketing decisions more effective as marketing teams do not rely on someone’s hunch or incomplete surveys to drive their decisions. By analyzing their previous marketing efforts, social media and the habits of their potential consumers, they can better target certain parts of the market and achieve better results.

In addition to making decisions smarter, big data can also help companies make quicker actions, which can often make a huge difference in how successful those decisions will be. For instance, instead of lagging behind the biggest players on the market, a mid-sized company can be the first to, for instance, target a specific demographic or lower their prices, after doing some data analysis which showed this is a smart idea.

In essence, companies agree that big data makes their decisions faster and relatively more successful than ever before, while doing away with much of the guesswork that went into making decisions before.

Closing Word

Simply put, big data has already become a huge part of the business world, despite suffering from some of those early problems that sometimes make it difficult for companies to truly tap the full potential of big data. In the future, however, these problems will be solved and big data will become an integral part of every business process.

Image: Pixabay

How Big Data Is Changing the World of Business