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WEACCELERATE

Research-led Growth

  • Dr Oyindamola Asekun

Big Data: Harnessing Data-driven Benefits Beyond the Noise

People fear what they do not understand, and this is the case with big data. The concept of big data is quite prevalent, as most enterprises are aware of, and use the buzz words, but very few truly understand what it means or how they can harness its power to achieve competitive advantage. Even though recent studies show that firms using data driven insights tend to surpass those that do not. Most organizations are not agile enough to continuously learn, and use insights gained to drive solutions.


Big data simply refers to the aggregation of digital data, too big to manually understand and analyze (hence, the use of the label – big data). This might pose a threat because of the enormity of available digital data, both on and off the internet, but it can also be advantageous for organizations across industries as they can now use this available data to better predict and meet customer needs. For instance, your likes and actions across social media platforms can predict and reveal the type of person you are. Particularly, in the Financial Times (FT) it was highlighted that the personal information available online can help reveal behavioral patterns, actions, and characteristics of individuals which enterprises can use to better understand their customers. However, a large number of firms are still fascinated with the number of likes, followers or page views on social media, instead of listening and seeking to unearth the voice of the consumers within the data. Also, another study carried out by a team of scientists funded by Microsoft-research shows that user likes on Facebook, predict traits and other characteristics that were not provided in their profile. This supports the claim by the FT that online information and actions on social media reveal more than what we think it does. Whilst these studies do not provide a one size fits all recommendation, they highlight some inherent benefits which can be harnessed from big data.


Indeed, exemplar cases of organizations successfully harnessing the benefits of big data were identified across industries examined. For example, financial services companies are analyzing big data, and using insights to create better value propositions including digital and mobile products and services which meet needs of customers across segments. Also, firms in FMCG industries are using real time data to understand customer sentiments towards their products and services.


These insights subsequently inform the production of new products and services, and contribute to better customer - organization relationships. Therefore, if effectively used big data can create new growth opportunities for organizations, and help existing firms sustain their competitive advantages.


In my experience, big data has become a critical ingredient used by leading firms to achieve competitive advantage. Most market disruptors including new entrants and challenger firms use insight led strategies to:

  1. Create an accurate profile of their customers and segment better: as they now have access to significant amount of information about users online, which can be captured and analyzed. Leading firms are using the insights gained from the analysis to accurately target their customers, and position their products and services more effectively than was ever possible.

  2. Achieve cost reduction: as organizations can use available data to test, monitor, and capture real time customer response to business processes. This enables leading firms to quickly identify pain points, manage risks, optimize performance and promote efficiency.

  3. Monitor customer sentiments and comments

  4. Create new and personalized products and services

  5. Better communicate and more accurately personalize communications including advertising to suit customers.

Particularly firms in the marketing industry are investing in big data solutions in order to achieve the benefits highlighted above. According to the Direct Marketing Association (2015) study, investments in data driven marketing activities including digital data and analytics will continue to grow. Specifically, 40% of marketing professionals expect their companies to invest in big data and analytics, and 25% highlighted a significant increase in data related investments. This is equivalent to approximately 12% higher than the expectation by marketing professionals at the end of 2014. The eMarketer (2015) also indicates that marketing professionals have witnessed a significant growth in revenue generated from data driven marketing activities in Q1 of 2015 in comparison to Q4 of 2014 as shown below:



These increased levels of spending are proportional to the level of growth in revenues experienced by marketing firms within the period. Infogroup (2014) suggests that marketing professionals are even more optimistic about the growth in data related marketing activities, as 62% had fully invested in data solutions versus 54% in 2013, and an additional 26% planned to do so over the next two years. Furthermore, 79% of US marketing execs surveyed by Forbes Insights expected data driven marketing usage to grow over the next 3 years.


Although, this is the case in the marketing industry, other industries are yet to fully adopt big data as a source of competitive advantage. This is mainly due to inhibitors such as legacy IT infrastructure, lack of management support and understanding of the benefits of big data, and lack of adequate resources.


Overall, in order to harness the benefits of big data, organizations across industries would need to understand the power of big data to create superior value for their customers and stakeholders.

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