Improving Big Data analysis by 10% could yield big returns

A study conducted by the University of Texas [4], and sponsored by Sybase, on the business impact of effective data revealed that if the median Fortune 1000 company increased the usability of its data by 10%, it could result in an increase of $2.01 billion in revenue and lots of new jobs. The researchers paid close attention to quality, usability, intelligence, mobility accessibility of data and sales mobility.
 

The study revealed  that employee productivity is affected by increasing the usability of data. Each employee will find a different purpose for the same set of data, and in many cases the outcome will depend on the granularity of the data being accessed and the person's purpose for accessing the data. Similarly the benefits will vary by industry (see Figure 1).
 

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Figure 1 Impact of a 10% improvement in data usability on productivity
 

The accuracy of analysis usually gets better with the increase in the size of the data. Trends can be gleamed and patterns become more visible as we add more data into the mix. Users are then able to make intelligent recommendations on the next step.
 

The ability to react fast to market changes can become a critical factor in the ability of a business to survive external market forces. As an organization grows in size, empowering employees with remote access to time sensitive information can be vital to the business' survival.
 

A sizeable chunk of business operations now involve a mobile workforce, which involves the ability of sales persons to use portable devices and applications to exchange information related to all aspects of a deal or transaction with a customer.

In a typical business, sales people will want to know what customers are buying when and how much. For the accounts receivables department, what they want is to know the credit terms of those customers and how this impacts the business' cash flow position. Likewise the accounts payables department want to understand how much the company owes which supplier, when the payments are due, and what the impact of ordering new inventory will be to the company's financial position. The warehouse manager wants to know what inventory is leaving the warehouse and when replacement inventory will arrive.
 

Just how much does a 10% increase in data usability equate in one metric that all senior managers look at – sales? The research suggests that it varies by industry. The retail industry reported the maximum average increase of nearly 50% in sales per employee for a 10% improvement in data usability. Indeed consistency and conciseness of organizational data across multiple platforms will help with more accurate sales forecasts, improved inventory management across manufacturers and distributors, and greater efficiency of the sales force. All of these contribute to greater sales efficiency. The information intensive services industry reported an average increase of nearly 40% in sales per employee for a 10% improvement in usability, while the other verticals averaged an equivalent increase of nearly 20% in their sales per employee.
 

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Figure 2 Impact on sales due to 10% increase in data usability
 

A McKinsey Global Institute report titled "Big data: The next frontier for innovation, competition, and productivity [6]" projects that businesses will be acquiring and storing larger and larger amounts over data in the coming years – for US companies, the consultancy predicts an average of 200 terabytes of stored data per company with more than 1,000 employees.
 

The consultancy believes that Big Data unlocks significant value by making information transparent and usable. The trend towards storing data in digital form will make for more accurate and detailed performance information which can be used to boost performance. By narrowing segmentation of customers, businesses will be able to create more tailored products and services that will yield higher values of business with customers. Sophisticated analytics can substantially improve decision-making.
 

Having understood the importance of Big Data to a business' competitiveness, what needs to happen now is recognition by organisations to move forward with strategies that will help execute their Big Data strategy. At the same time, organisation will need to bear in mind the following as part of the process:
 

Corporate-wide policies covering data privacy, information security, and intellectual property will needed to be addressed. The search for the right talent and technology must happen concurrently even as workflows are put in place to ensure optimum use of Big Data. The sources of Big Data are everywhere in an organisation – email, chats, surveys, voice calls, video calls, machine-to-machine transactional data, etc. Integrating information from multiple sources, including third party, will need to be carefully studied to make sure nothing is left unchecked.