Big Data - the Shift from Intuition and Hunch to Scientific Strategic Decision-making

Big Data - remember that term because it is important. Big Data is the term that is used to describe the rapid growth of data from our movements, choices, activities and transactions.According to estimates provided by IBM, every day, we create 2.5 quintillion bytes of data — so much that 90% of the data in the world today has been created in the last two years alone. This data comes from everywhere: sensors used to gather climate information, posts to social media sites, digital pictures and videos, purchase transaction records, and cell phone GPS signals to name a few. This data is big data.If Big Data is so important in the world of business, how come you may not have heard about it? To you and I, big data is probably best understood as the enormous datasets held by businesses, governments and other large organisations whose activities affect millions of us. Big data is used to determine your recommended friends on Facebook, suggested purchases on Amazon and the point at which your mobile phone network offers you a freebie to keep you on side.A key question is, how can Big Data be used by businesses to make decisions?

Businesses can now understand in much more detail what their customers are doing, how their processes are working and what employees are doing . And they can do this because of Big Data which is changing profoundly the role of management.

Strategic consultancy McKinsey (like many others) have looked at the increasing use of data analytics which they have found is linked with improvements in productivity and increases in profitability. That suggests that effective use of Big Data is a source of competitive advantage - though that is probably easier to say than do. Lots of companies think they use data well, but do managers make effective use of data to analyse problems or explore opportunities?

An interesting suggestion in this video interview is that a CEO may need to address organisational cultural issues in order to make the use of data-driven decision-making more widespread in a business.

I also like the comment that the different functional areas of the business need to be much closely integrated in order to make the most of Big Data. Much of the data is non-financial (e.g. customer satisfaction) and this can provide much quicker and more accurate measures of what is happening in the business rather than financial information such as revenues and profits. So businesses should look for data insights on customer experiences.

Big Data also allows a business to learn much about the personal preferences of individual customers - which itself provides the opportunity to personalise product offerings. The data is described as "fine grain" - a level of detail that businesses have not been able to access before.