I have to admit, when I think about the power of Big Data, it is a little bit creepy. I mean think about it...it's a little like being stalked...and at times, by ourselves. I go to a website like Overstock.com and look at kitchen chairs. The next time I am on my personal email, an ad for those very chairs pops up. From a marketing perspective, it’s called “retargeting.” The chance of my purchasing those chairs increases when that same ad pops up again and again, following me from website to website. From a business perspective, it’s called Big Data. The company...in this case Overstock...can take the information that they’ve gathered on me, a consumer who is interested in purchasing chairs for my kitchen, and use it predictively.
By definition, Big Data refers to three Vs: volume, velocity and variety. But it’s what you do with all the data you have (volume), the speed at which you can access it (velocity) and the types of sources you pull it from (variety) that provides the real insight. One of the best known uses of Big Data analytics is Amazon...and they’ve been using it for years to suggest items you might want to purchase/read/etc., based on your search terms coupled with other people who viewed/purchased the same items. Sometimes I select an item just to find those that are similar. But Amazon goes one step further too and sends relevant emails down the road, just when you’ve nearly forgotten about that item. Talk about a good use of predictive analysis.
Perhaps even better at using Big Data is Target. According to the New York Times, every customer is assigned a Guest ID number...and all your purchases and activities, such as filling out a survey, visiting the website, etc., are assigned to that ID number. When coupled with demographic information, the company is able to segment customers and "target" them with messages/flyers/ads that are customized to current life events, such as pregnancy or planning a wedding. The fact is, however, that most companies are not yet able to use their vast data sources in the ways that Big Data promises to deliver, but the majority are taking first steps.
According to an A.T. Kearney white paper titled “Big Data and the Creative Destruction of Today’s Business Models,” 90% of Fortune 500 companies will embark on at least one big data project initiative this year. They give several examples of how big data analytics are being used...one more unusual initiative was by the Democratic Party in the 2012 presidential election, who compiled polling, fundraising, volunteer and social media information into a central repository, which they then analyzed to determine whether certain campaign tactics were producing results.
In the sourcing and outsourcing world, imagine the ways Big Data can be used. In a recent online article, 5 Ways Big Data Can Help Retail Supply Chains, several great examples are offered for retailers, including: delivery management that utilizes current weather information, traffic and truck location feeds to determine the exact time for a delivery; and vendor management enabling retailers to assess vendor performance against real-time key performance indicators (KPIs) such as on-time service, customer feedback, complaints and profitability. There’s one thing I know for sure, and that is this...garbage in...garbage out. If you want to make sure that your Big Data initiative is worthwhile, start by scrubbing your data. Make sure you are working with clean, current and correct information. Then figure out all of your data sources, which can be vast depending on your industry. Do you use a CMS system? Do you track information in Excel worksheets? Do you have a company Facebook page, LinkedIn or Twitter? Are you connecting with customers using any other system? Think about all of your touchpoints and be creative in how you can use that information to make better, faster decisions. How is your company using Big Data? Are you exploring initiatives? We’d love to share real-world examples.