Big Data Analytics in Business: Why Do Businesses Need It?

The term ‘big data’ refers to the complex process of analyzing a huge amount of data to find information such as market trends or customer preferences. This information can aid businesses in making quick and well-informed decisions. In other words, data analytics techniques and technologies allow organizations to analyze data sets and collect new data. Thereby, incorporating exterior elements to develop predictive models and statistical algorithms.

A recent survey states that 97.2% of organizations are now investing in artificial intelligence and big data. The reason is that advanced analytics involves complex applications with various elements such as statistical algorithms, predictive models and other powerful analytics systems that help improve business operations and performance. This complex process of examining big data helps identify hidden patterns, market trends, correlations and customer preferences. This can support companies to make analytical and informed business decisions. 

We can clearly see that there is a major role of big data in business analytics. This is because the data analytics technologies and techniques provide businesses with a method to collect new data & analyze them. Today, we will learn more about big data analytics and its various applications and benefits in business.

Let’s begin!

How is Big Data Used in Business?

Companies can use big data analytics to make data-driven decisions that improve results and return on investment. It also improves prediction and business-related outcomes. This, in turn, leads to effective marketing, better opportunities, improved customer acquisition, and higher efficiency in operations. About 95% of U.S. companies state that their inability to manage unstructured data is holding them back. This implies that the applications of big data & analytics can give organizations an edge over their competitors. 

In this digital age, statisticians, data scientists, predictive modelers, and data analysts prefer to collect and process structured data. This data could be in the form of web server logs, cloud applications, mobile applications, social media content, contact information, mobile phone and email address record, internet clickstream data, survey responses, machine data captured by sensors, etc. Data preparation and processing are required to cleanse the data— this is where an analytics tool comes into the frame. Why is this process required? Well, as per a recent survey, poor data quality costs the U.S. economy approximately $3.1 trillion annually.

Benefits of Big Data Analytics for Business

As per a recent survey, the big data analytics market is predicted to reach about $103 billion by the year 2023. This points towards the various benefits of big data analytics in the business and management sector. Netflix is the biggest example that avails the benefits of this analytical tool— with the use of big data, the OTT platform saves $1 billion per year on customer retention. This is done by providing personalized recommendations, showing similar videos to the ones the user has already watched, along with the ‘continue watching’ suggestion and displaying numerous options for a specific genre. 

Well, not just the entertainment or e-commerce industry, every sector is benefitted from big data analytics. As a matter of fact, the big data analytics market in healthcare will be worth $67.82 billion by 2025. And we all are aware of the increase in cyber scams which demands the IoT, banking and tech companies to take extra precautions. There are many other proven use cases of big data analytics in various industries such as Banking and Finance, Accounting, Aviation, Agriculture, Automotive, Government and Law Enforcement.

Let us understand how data analytics helps organizations in different ways:

Customer Acquisition and Retention

Structured data can help provide improved customer experiences and increase customer loyalty. The collection of consumer data can ease the marketing efforts of the organization, thus directing them towards the right path to customer satisfaction. Organizations get a competitive advantage over their rivals by implementing a unique approach. With the use of big data, companies are able to pinpoint consumer demand and present them with exactly what they are looking for.

In simpler words, big analytics observes consumer patterns. For instance, Amazon uses the big data analytics technique by providing personalized shopping experiences to their customers. The e-commerce portal suggests items to their customers based on purchase history, browsing behavior and other such factors. 

Focused and Targeted Ads

With the accumulation of data such as product page viewing history, purchase history and customer queries, ad campaigns can see large-scale success as they can now target the right set of audience and convert them into customers. With sophisticated analysis of customer trends, businesses are able to monitor online purchases and observe point-of-sale transactions. 

If you are a business that has been spending a massive amount of marketing with zero return on investment? It is time to include big data analytics in business operations and marketing. The in-depth insights allow companies to launch focused and targeted campaigns. Thus, building brand loyalty and exceeding customer expectations. 

Price Model

Price optimization can be more convenient using model data, thus maximizing revenues by understanding consumer behavior. The tool also helps organizations to evaluate finances and give clarity on the business front.

The data analysis also helps with cost savings that result from new business optimizations and efficiencies.

Product Development

Improve your product viability, progress measurement and development decisions and take it into the direction of customer satisfaction with the use of big data analytics. Valuable data helps companies update existing products with better products. Thus, implementing innovation and remaining competitive in today’s digital era. 

While many businesses have been operating on instincts, gut feeling alone cannot take any company a long way. Big data analytics helps companies collect large amounts of data and understand consumer needs. 

Supply Chain and Inventory Management

B2B supplier networks and inventory can be managed with predictive analytical models and route optimization as data is sourced from analytics software. With the use of big data, companies offer supplier networks with greater precision and insights. 

Data analytics now act as a disruptive technology by including high-level collaboration and applying new knowledge to existing problems and other challenges. 

Effective Risk Management

Identify new risks from data collected by the data analysis team and big data analytics software for better management and strategic growth. In businesses hard work is not enough, you need smart work and with a high-risk environment, risk management solutions are required. 

With the use of big data, better strategies and risk management models can be built to improve the effectiveness of the business. The strategies are curated from large sample sizes of data of consumer behavior.

Future of Big Data & Analytics in Business and Management

The technology usage of 2021 predicts that jobs in the data science field will increase by 30% in the year 2026 — which makes 11.5 million new jobs! Isn’t that huge? 

Therefore, there is no doubt that big data will continue to act as a crucial element for business growth. Popular brands and industry experts understand this prediction and the majority of businesses have already tapped into its numerous benefits for a competitive edge and improving customer satisfaction.

With an increase in data being generated every second on a daily basis, traditional data management systems are unable to cater to company demands. This is where new technologies have come into the picture by offering tremendous benefits such as tackling the volume, velocity and variety in a user-friendly and effective manner. Data Science, specifically Big data and analytics is the upcoming big player in the field of management and marketing.

Companies such as DataCuve are providing advanced big data analytics, management and big data consulting services to businesses that thrive to grow. With consultation, development and implementation of a comprehensive big data strategy, companies can optimize their pricing, ad campaigns, product innovation and core strategies. With this streamlining of processes, better revenue can be generated while saving costs. 

Top 5 Most Scarce Skills
Top 5 Most Scarce Skills

The above graph shows that data scientists are among the fastest-growing jobs in the present era, followed by machine learning engineers and big data engineers. This survey was conducted by KPMG in 2019. The survey questioned 3,600 CIOs and technology executives from across 108 countries and discovered that about 67% of them struggled with skill shortages (such as those mentioned above). Thus, the role of big data in business analytics is becoming more prominent, without a doubt!