There’s a new way of doing business, and it’s being driven by data. Big Data.
Through years of technological innovation, companies amassed vast volumes of information on their business activities—everything from structured production data, marketing, sales, HR, finance, facilities and operations to transaction-level data on suppliers, customers and partners. But the convergence of major technology shifts like cloud computing, mobility and social and business networks sparked a new class of data—texts, tweets, blog posts, Web-based videos and other social postings. And companies that effectively harness this information stand poised to achieve unprecedented levels of productivity and profits.
“Today data analytics confer power to gain advantage in ways hardly imagined a decade ago,” said Zachary Tumin, Special Assistant to the Faculty Chair and Director of Harvard Kennedy School’s Program in Science, Technology and Public Policy. “As never before, you can see and be observed, talk to and be talked about, sense the present and predict the future.”
Tumin is also the author of “Doing Business the Data-Driven Way: Pathways to Success in the Networked Economy,” a report that explores the power of Big Data. Companies that embrace Big Data can ultimately transform their businesses.
Consider the following examples:
- At Cisco, the strategic marketing group mined historic data and social media mentions for customers who revealed both a “propensity to buy,” and a high “readiness to buy.” Cisco’s sales force converted that insight to sales uplift of $4.2 billion.
- EMI Music’s Million Interview database let the company play “Moneyball” Billy Beane-style with music hits, scoring home runs for fans and artists. The result: EMI rises from back-on-its heels to a global music powerhouse.
- Mount Sinai Hospital in New York optimized its patients’ first eight-to-12 hours in the hospital, running hundreds of simulations. With improved utilization, Mount Sinai achieved the financial effect of adding 100 new beds without actually adding one.
Such results aren’t easy to come by. But with increasing frequency, businesses are demanding them.
“Businesses, large and small, want to tap into vast amounts of internally and externally produced information to create competitive insights never possible with the mostly internally focused ERP data that predominates the contents of the corporate data centers today,” said Brian Sommer, Chief Executive Officer of TechVentive, a technology strategy consultancy.
Armed with the right tools, they can. Business networks, for instance, enable companies to discover, connect and collaborate with a global network of partners more efficiently and effectively than ever before.
But networks are about more than just connecting companies, people and processes. Their real power lies in what goes on inside them—all the interactions, transactions and commentary—and the massive amounts of unstructured data that they generate. And as the report findings suggest, it is from this data that the next wave of innovation and business productivity will come.
Traditional relational or structured data may serve as the foundation for analytic efforts. But by combining it with unstructured information, companies can gain additional insights that enable them to make better business decisions.
In fact, when you combine the convenience and speed of the cloud with the connectivity and intelligence of business networks, you can predict the future with accuracy and recommend the best course of action to capitalize on those predictions.
Consider how consumers already benefit from the convergence of structured and unstructured data:
- Amazon.com harvests the buying patterns (transactions) of its customers to recommend complementary products for up-sale. It also uses community-generated ratings and tips to further guide buying decisions.