Nearly 14 billion years ago, massive forces of gravity and friction converged to spark the big bang that gave life to the universe as we know it. Today, the same type of convergence is occurring in the business world.
This convergence of major technology shifts such as cloud computing, mobility, and social as well as business networks has created a new class of “unstructured” data - texts, tweets, blog posts, web-based videos, and other social postings – that now greatly exceeds traditional data types. According to a
study by independent research firm Aberdeen Group, the vast majority – more than 83 percent – of the information companies now have is unstructured. A new study, “Doing Business the Data-Driven Way: Pathways to Success in the Networked Economy,” conducted by Zachary Tumin, Special Assistant to the Faculty Chair and Director of Harvard Kennedy School’s Program in Science, Technology, and Public Policy, in the study and sponsored by Ariba, an SAP company, suggests companies that effectively harness such information gain unique insights that give them significant advantage over their peers.
Online networks have been the key enablers of the first-wave of globalization, making it as easy and transparent to conduct business with a partner on the other side of the world as with one across the street. In the same way that consumers tap into personal networks like Facebook, Twitter or Amazon.com to learn, share and shop better, leading companies leverage business networks to collaborate more efficiently with their employees, customers and other trading partners.
But networks are about more than just connecting companies, people and processes. Their real power lies in what goes on inside them - all the interactions, transactions and commentary - and the massive amounts of unstructured data that they generate. Tumin’s findings suggest this data will bring in the next wave of innovation and business productivity.
Consider how consumers are already benefitting from the convergence of structured and unstructured data:
Amazon.com harvests the buying patterns (transactions) of its customers to recommend complementary products for up-sale. It also uses community-generated ratings and tips to further guide buying decisions.
Twitter and Facebook mine unstructured comments to develop psychographic profiles of users and deliver highly targeted advertisements (e.g.,
promoted Tweets) that have much higher conversion rates than traditional advertising approaches based on demographic segmentation alone.
The Facebook “Like” button - now pervasive on websites ranging from online stores to leading news media outlets to political blogs - offers far more accurate (and quicker) insights into buyer preferences and public opinion than traditional focus groups and straw polls.
New online and mobile banking options from startups are capitalizing on the convergence of mobile, cloud, and social to foster entirely new payment models. A consumer’s mobile device can use geo-location information to detect when its owner is in his favorite shop, then use the cloud to automatically place an order and virtually settle out between the customer, the shop’s register and the bank. If the consumer is so inclined, they can include a tip and even post a rating or comment via integrated social channels.
The “Internet of things” is not only making our lives more efficient, it’s unleashing a host of new data that can be used for everything from research to targeted marketing to post-sale service. Leveraging the hundreds of billions of dollars of financial transactions - not to mention the transactional data and relationship history accompanying it - allows buyers and sellers to make informed decisions by detecting changes in buying patterns and pricing trends. When combined with community-generated ratings and content, real-time insights as well as recommended strategies for moving businesses forward become more applicable.
Innovative companies are already harvesting the information inside the communities they participate in to deliver new insights and capabilities. For example:
At Cisco, the strategic marketing group mined historic data and social media mentions for customers who revealed both a “propensity to buy,” and a high “readiness to buy.” Cisco’s sales force converted that insight to sales uplift of $4.2 billion.
Mount Sinai Hospital in New York optimized its patients’ first 8-12 hours in the hospital, running hundreds of simulations. With improved utilization, Mt. Sinai achieved the financial effect of adding 100 new beds – without actually adding one.
o Mediafly, a fast-growing mobile marketing solution provider, accessed real-time insights into invoice approval status in order to view outstanding invoices, know when they’ll get paid and make offers to secure early payment.
Mediafly’s COO and CFO John Evarts said, “we can now get access to capital at favorable rates when we need it, allowing us to hire new developers so we can take on new projects and grow the business.”
Demand for real-time insights is now at an all-time high. A growing number of business executives are fed up with lagging indicators and feel the lack of access to timely information is negatively impacting decisions and the performance of their business. Case in point: 35 percent of the companies surveyed as part of the Aberdeen study say data is too slow to access. 47 percent indicated that they need information within an hour of a business event, but that they achieve this goal just 71 percent of the time.
To fill this void, a new breed of technology has emerged. Known as in-memory computing, it increases processing speed by 100 percent or greater by loading data directly into Random Access Memory of a server. When combined with a mobile platform, it enables companies to serve up the right information to the right people in the right places in real time.
It’s a powerful proposition. And companies that embrace it will be able to make the most of their big data by bringing structure to the unstructured, and gleaning insights that enable them to deliver game-changing gains in collaboration, productivity and insight that vault and keep them ahead of the competition.
Yes, big data is getting bigger. But so are the possibilities for businesses that effectively harness it.