Brexit is changing the way UK businesses deal with the world. Changes in US global policy such as the renegotiation of NAFTA will redefine American trade. Increasing globalisation – and the reactions against it. Negotiating the headwinds of financial uncertainty has never been so tough.
Businesses must look at big data analytics to keep them on track – the examination of massive amounts of data to uncover patterns, trends, and insights. Research by Aberdeen shows there are clear business reasons – 58% of senior finance executives want to increase operational efficiency with data. The move is well underway. Aberdeen says the top five areas of investment are traditional business intelligence (reporting and dashboards), interactive data visualisation, integration and data preparation, traditional data integration, and predictive analytics.
Peter Sondergaard, an executive vice president at Gartner, explains the value of big data: “Information is the oil of the 21st century, and analytics is the combustion engine. Pursuing this strategically will create an unprecedented amount of information of enormous variety and complexity.”
Big data as a technology concept has been hyped for many years in technology and business circles, like the cloud. But there’s a reason for this – big data works. It brings speed, efficiency, and the ability to use data to make short and long-term decisions. It’s important – and the companies that use big data well have a competitive edge.
Machine learning, where computers can learn without being explicitly programmed, is already having a major impact, as it allows value to be extracted from huge sources of data in a way not previously possible. Handling and making the best use of big data has never been so important. Here are some reasons why the good use of big data can provide a competitive edge in tough markets:
- It allows you to predict the future by looking at past data
Analytics provides information for scenario planning, allowing finance departments to synthesise historical financial information and uncover trends to see where a business is going. It can also make use of real-time financial data to reveal valuable insight. Tools such as dashboards also allow CFOs to develop, report, and share critical business information throughout the business.
- You can make better, data-driven business decisions
Reliance on gut feeling isn’t good enough when it comes to making business decisions. Data should be at the heart of strategic decision making, especially in key areas like finance and operations. Once you’ve worked out the questions you need answered, you can focus on finding the data that will answer those questions.
- Without big data, you’re in danger of being left behind
Big data is now seen to be a competitive advantage. The better decision making it offers can aid growth, enhance productivity, and create significant business value. Leading companies and new entrants alike can use data to innovate, compete, and capture their share of a market, whatever industry they’re in.
- It allows finance to become more agile and responsive
Finance has always been called to use its skills to guide business decision making. With big data, they can become more agile and responsive when it comes to adapting to changes in supply, demand, and global changes in the business environment. It provides more accurate forecasts, and increases value of advice finance provides to the business.
Examples of big data use in industry
Adrian O’Connor, Founding Director at Global Accounting Network, says, “In anything product related for example, big data can help identify significant inefficiencies across production lines or supply chains. In such circumstances, even small incremental wins can mount up to significant gains in margins. We have seen clients increase production line performance, rationalise product sets, reallocate investments, all to gain efficiency because of things identified from big data analytics.”
Big data has applications in many industries – any business that is looking to use data to answer important questions about their operations can benefit. Look at some of these examples, and think about how they can apply to your own business:
The way we can collect and analyse data has changed the way the supply chain operates, increasing efficiency, reducing risk, and improving customer service. For example, big data can provide support to logistics visibility, allowing staff to track and know when supplies are delivered and when products leave for their destination. It can also allow manufacturers to see whether there are problems with their suppliers, giving them the opportunity to address the problem.
Big data can also provide companies better insight into demand and supply, by providing managers the means to forecast what products will be in demand and the evidence they need to start building them at the right times. Projects which use product and point-of-sale data could be extremely valuable in allowing business leaders to adjust production to meet predicted demand.
The analysis of historical data can be used to determine when and if a product recall is likely to take place, allowing automotive businesses to make changes in time to the conditions which created the likelihood of a problem. They can also determine what country-specific services, models, and accessories customers are most likely interested in.
With big data, managers can optimise the use of fulfilment channels by using data to analyse critical information such as the cost to ship food and beverage goods and which transport services costs are the most effective to use. With advanced usage, businesses can use data and logic to create models, which can drive decisions and inform operations.
Big data can allow companies in the chemicals sector to make better demand forecasts and pricing decisions. Getting pricing right is particularly important, as it determines profitability. However, the nature of the industry and the markets served makes price decisions complex – advanced analysis of data can help make informed decisions.
Implementing big data in an organisation
There’s no argument that big data holds huge potential. But it’s also a challenge to get right – it requires time, resources, and staff to avoid data overload and to drive business success. Here are five key tips to increase your chance of success.
1. You need data leadership
Business leaders embarking on their data analytics journey should understand what it can do and how it can increase performance within business units. The strategy should also be led by a senior executive who has the influence and authority to put the wheels in motion, break down institutional barriers, and inspire others into action.
2. Define a strategy
All business initiatives need a clear and well-thought strategy, and big data is no exception. This is where clear responsibilities and the availability of time is crucial. Even with the best will in the world, big data initiatives can live and fail with a lack of discussion and a failure of business departments to agree on what the priorities are.
3. Determine what technology you need to invest in
You will need the right technology to develop the means to pull, handle, and analyse data. This means investing in the enterprise-level analytical tools needed to improve performance, as well as the resources to run it. There are a lot of vendors in the market which claim to offer the best corporate big data tools, and you need to make sure you have a process in place to pick the best tools for what your business needs.
4. Get the right expertise in
The market for experts with advanced corporate-level data skills is very competitive, which means finding the right people is a challenge and keeping them even more difficult. As well as technical knowledge, they need to have business smarts and the right communication skills to ensure their insights are heard and acted upon.
5. Use an agile approach
The use of big data may start small – specifying a specific business problem and finding a way to solve it. You may find that the needs of your organisation evolve once you understand the data, which means an agile and iterative approach based on current needs is a better approach than blowing money on a huge project – smart small and think big!
The Future of Big Data
There’s a perfect storm brewing between the availability of data, impact of new enterprise technology, and a shift towards making decisions based on information, rather than simply gut instinct. This is huge demand, and we’re only going to see the enterprise analytics market grow and grow – according to IDC, the worldwide big data and business analytics will have grown to $150.6 billion this year, and reach more than $210 billion in 2020. IDC predicts that banking, discrete manufacturing, government, and professional services will be the largest spenders.
Jessica Goepfert, program director at IDC Customer Insights and Analysis, said, “The three industries that comprise the financial services sector – banking, insurance, and securities and investment services – all show great promise for future spending on big data and business analytics. This technology can be applied across key use cases throughout these financial institutions – from fraud detection and risk management to enhancing and optimizing the customer's journey.”
Another area worth following is the impact of blockchains, and the possibility of collecting and storing data in a decentralized way. This is important, because with the huge amounts of information being collected, there can be security risks – blockchain technology could improve security and highlight what needs to be done when a hack does occur.