I am writing this article with one thought in mind, you, like many of us, are not a data scientist, econometrician, statistician, or database developer. You are a business owner, a manager, or perhaps an executive, but you all have one thing in common; you are looking to fundamentally grasp the concept of big data before jumping on the band wagon. Those professionals mentioned previously many times have a slightly different take on what big data is, but their perspective often has very little to do with your business.
Ever since the first business became a business, the person who manufactured, marketed, sold, and serviced the first wheel let’s say, businesses have gathered, stored, and analyzed data to make informed business decision that would positively affect their profitability. After all, most businesses are in business to make money! Thus, our journey begins with data, nothing more noting less, just data. I am simply talking about the same data that you have been collecting in your organization, the same data that you have been analyzing to make informed business decisions, just data. With that concept firmly established, the question still remains, what is BIG data, and why should I care?
Our traditional approach to the use of data has an inherent flaw in its very design, a flaw that big data appears to resolve. That flaw is the timing of the data. It turns out that when you receive the data can have measurable effects on the decisions that derive from the data. The problem then is that the traditional use of data has a historical context. It is data gathered from what we learned yesterday, or the last hour, or last week, and we’re making decisions for tomorrow with information from yesterday. In some industries, the market difference between yesterday and tomorrow might as well be as different as the 18th century versus the 22nd century.
In marketing and economics we use the terms leading and lagging indicators when assessing information. A lagging indicator is a factor that changes after a market or economy has already begun to follow a pattern or trend. A leading indicator, on the other hand, is the opposite, a measurable factor that changes before a market or economy begins to follow a pattern or trend. As business leaders, we want to be able to focus our analysis efforts on leading indicators so we can develop the next great product, or advertising strategy, or manufacturing process. The problem is that leading indicators are not always accurate.
If you pick a real business problem, such as how you can change your advertising strategy to increase spend per customer, it will guide your implementation. While big data work benefits from an enterprising spirit, it also benefits strongly from a concrete goal.
The phenomenon of big data is closely tied to the emergence of data science, a discipline that combines math, programming and scientific instinct. Benefiting from big data means investing in teams with this skillset, and surrounding them with an organizational willingness to understand and use data for advantage.
Dr. Jeremi Bauer, DBA is the Academic Program Manager for Marketing in the Malcolm Baldrige School of Business at Post University. Bauer holds a Doctorate of Business Administration from Walden University, a Master of Business Administration from University of Phoenix, and a Bachelor of Science in Economics from the State University of New York College at Brockport.