With all these data sources, organizations have access to high velocity and high volume data that requires big data analytics to operate in the modern competitive landscape. While investing in big data is a critical component, more is required in terms of investing in the right equipment. Without the right data strategy, organizations will have trouble making sense of all the information. Furthermore, they risk falling behind their competitors, who are better equipped.
How businesses use data analytics
Data analytics is a term used by many organizations, professionals and business intelligence vendors to describe various functions. Various companies use it in different ways. For instance, human resource departments use data analytics to make better hiring decisions and measure the performance of their staff. Companies also use big data analytics to analyze spending patterns and prevent fraud. Online retailers use this technology to examine web traffic and marketing performance and to help in setting up targeted ad campaigns. On the other hand, the World Economic Forum uses big data analytics to predict the patterns used to fight climate change.
The competitive advantage of big data analytics
Gathering information and using it to improve services, processes, and products is a big win for businesses. Past surveys, sales reports, focus groups, and studies have identified the problems and informed business strategies. With the unprecedented amounts of data generated by businesses in every sector, the traditional approaches are no longer effective in addressing the existing problems and getting usable and accurate insights from data that leads to competitiveness. Here are some areas in which big data analytics helps deliver gains.
- Cost reduction
Big data technologies like Hadoop or other cloud-based analytics solutions allow organizations to store massive amounts of data cost-effectively and efficiently compared to the in-house data centers. Maintaining a data center can be costly in terms of infrastructure needed and labour. Real-time data analytics allows businesses to identify and fix inefficiencies, include feedback, streamline processes and enable organizations to avoid waste, speed up work and enhance profits.
- Improved decision making
The role of big data is to facilitate smart and faster decision-making. With big data analytics, businesses can now analyze data from different sources in near real-time and make strategic decisions based on data accuracy.
- Enhanced products and services
Big data analytics and applications allow companies to develop better solutions and products. It allows them to identify customers, gauge satisfaction levels of their products and services and incorporate changes as demanded by the customers through collected insights. For brands, big data analytics enables them to avoid guesswork and deal with product development facts, making it easy to give customers what they want.
- Boosting customer acquisition and retention
Customers are the most valuable asset to any business, regardless of its size. Building a solid customer base leads to success, and no organization can succeed without establishing a solid customer base. Big data analytics helps businesses understand customer behaviour. It allows them to observe various customer-related patterns and trends and build loyalty. Understanding customers will allow businesses to deliver what they want.
While data is a crucial component, it does not provide a competitive advantage on its own. Rather, companies need to establish an effective system of collecting, storing and analyzing data from different sources and acting on valuable insights.