In 2015, digital products and services represented 22 percent of the world economy. By 2020, that number is expected to reach 25 percent—a growth rate of 10% since 2005. This holds significance for companies of all sizes, because the digital economy drives innovation, increases competition, and encourages growth across all industries.
At the heart of the digital revolution is Big Data, which companies can capture and use as a tool to determine the best course of action to take in the constantly-evolving digital landscape. Big Data is the best resource at a company’s disposal in the digital revolution, and those companies that take advantage of what it has to offer will find themselves thriving in the wake of digital disruption.
Here are five things that every executive should know about Big Data to help his or her company thrive.
1. Big Data can best be identified by the “3 V’s”
Digital professionals have designated three definitive properties that characterize Big Data, a term that roughly refers to the massive streams of data that are too large and complex for traditional analytical tools to interpret. The first “v,” volume, refers to how much data is created and stored. The second “v,” variety, is used to describe how many different types of data are present. The last “v” is velocity, which represents how quickly the collected data can be processed upon collection. A fourth “v” is sometimes included—it stands for the veracity or quality of the data.
2. Big Data can be structured or unstructured
Big Data is too large to be organized and decoded through traditional methods because it comprises information collected from countless sources, most of which are attributable to the digital revolution. The data that makes up Big Data is either structured or unstructured, depending on its source and mode of generation.
Though structured data is estimated to make up only 20 percent of all available data, it is much better organized and straightforward to collect. Both humans and machines can create structured data; examples include GPS data, information collected from medical devices, or call detail records like the caller, recipient, and time of call. Structured data also includes any personal information typed into online forms, like a person’s zip code or gender.
Conversely, unstructured data is abstract, lacks a predefined data model, and is much more difficult to sort, interpret, and apply. Examples of unstructured data include audio files of customer service calls, uploaded videos, and all activity generated by individual social media users. Unstructured data often contains a multitude of information contained within text or multimedia content.
3. Big Data is going to get even bigger, thanks to the Internet of Things
Studies indicate that existing technology generates more than 2.5 quintillion bytes of data every day, due in large part to the increasing prevalence of mobile, tablet, and wearable technologies. However, Big Data is poised to see significant growth in 2016 alone because of the increased availability and ownership of connected devices in the Internet of Things. These include objects like household appliances, cars, and even buildings that collect data.
By 2020, some industry experts anticipate the number of connected devices will rise to more than 28 billion as smart technology is increasingly implemented into homes, expanding the influence of the Internet of Things.
4. The analysis of Big Data can yield big benefits for businesses
On its own, Big Data is simply large amounts of information, gathered and stored. The real value of Big Data is uncovered through analysis, which can yield actionable insights that a company can use to increase sales, maximize growth, and operate more efficiently.
The analysis of Big Data can help companies make decisions about critical aspects of business operations, including opportunities for cost reductions and the development of successful new products. Big Data analytics affords companies insight into customer buying patterns, preferences, and levels of satisfaction with existing products—all of which can be used to design products or services that meet customer needs. The real-time nature of Big Data analytics also allows companies to be more nimble and agile, as it can provide early indication that a process or product needs to be altered, saving time and money.
5. Most business leaders aren’t using Big Data to the full advantage
Big Data is at the heart of the digital revolution and can be considered the new “natural resource” for business. Digitization has created technological imperatives for the leaders of modern companies, and those don’t recognize the potential of Big Data as a new, valuable resource may find themselves falling behind those companies that use it to their advantage.
A 2015 study conducted on the data management practices of companies in the mid-to-large scale range indicated that, while 75 of these companies’ leaders believed that they were taking full advantage of Big Data, less than 5 percent of them had actually invested in the technology and skilled workforce needed to actually do this. Moreover, poor-quality data represents a huge drag on the American economy—it costs companies more than $3 trillion annually.