What do I do with so much data?
Helena Ramalhinho, profesor in the Department of Economics and Business
Miquel Oliver, lecturer in the Department of Information and Communication Technologies
Big data is all the rage in today’s society, and it affects both private- and public-sector companies. So let’s ask a few questions to help us understand the phenomenon better and relativize it in terms of its impact. Is it just a trend or is it something that is here to stay and will really change the future of organizations? Do we always need big data or are there times when small data is enough? How can we turn big data into value?
“Is big data just a trend or is it something that is here to stay and will really change the future of organizations?"
The phenomenon has risen to prominence because large corporations such as Google or Amazon have been using big data for years. However, the true key lies in the changes in the processes and analytical methodologies applied, not just in the compilation and storage of vast quantities of data. In other words, the big change in organizational culture is the use of insights extracted from all these data to enhance decision-making processes.
Technically, big data is not a new concept, nor is there a single universally accepted definition of what it is. Obviously, big data refers to huge volumes of data, volumes that exceed the capacities of the traditional software used to collect, manage and process data. In addition to volume, big data also encompasses the concepts of diversity and complexity (variety) and offers the capacity to extract value in a reasonable amount of time (velocity). Hence, the three Vs associated with the idea of big data, which could be supplemented with others, such as veracity, value added, etc.
Big data systems deliver maximum value when they combine information from structured data, such as databases (text documents or spreadsheets, customer information, etc.), with unstructured external data: from social networks, mobile devices, sensors, the Internet of Things, etc. The selection and combination of various information sources is one of the initial challenges posed by big data, but one that also multiplies an organization’s ability to obtain the information it needs to answer any questions it might have.
Grocery chains have been using customer loyalty systems for years that were initially developed to offer discounts to shoppers and turn them into regular customers. However, this information is also quite valuable when it comes to conducting customized marketing campaigns, identifying relationships between products, deciding the product portfolio or developing customized recommendation systems for each customer with the ultimate aim of maximizing sales.
“The true key lies in the changes in the processes and analytical methodologies applied, not just in the compilation and storage of vast quantities of data"
Another area of application is related to the phenomenon of digital cities and urban management. How can we use all the information obtained in a city to improve traffic, reduce gas emissions or improve people’s lives? An example of improvement in this area is distribution optimization. With the use of a mobile app that has replaced the physical loading-unloading signs of yore, it is possible to obtain real-time information on traffic, parking space availability, etc., that can be used to implement a system of collaborative transport. Such systems streamline distribution activities and thus have a very positive impact on cities.
These are just a couple of examples of how big data is impacting people’s lives and boosting business efficiency. The availability of open data at the global scale increases the fields of application of big data and multiplies the possibilities of accessing these data, even for small and medium-sized enterprises, across all types of industries. Big data provides all of them with a competitive advantage that helps them grow in a sustainable and intelligent way and, most importantly, to do so improving people’s lives.
The big question is thus not the vast amounts of data that can be compiled and stored, but how we can leverage those data to create value.