You need big data! Or do you? If you listen to the marketing of more than 400 companies offering big data solutions, they’ll tell you that you need it just to survive. Of course, they’ll be able to implement this for you at a fairly significant cost. It’s worth it if it saves your business right?
They hype is real. Many companies are implementing big data strategies and solutions because they have a fear of falling behind. This leads to other companies that may not otherwise even think about it, to give big data analytics a second look.
The question still remains; do you really need a big data solution? The answer is probably not. The overwhelming majority of businesses don’t require one. They can be better today by simply using the data they already have .
Could you benefit from Big Data? Absolutely. There’s almost no company on the planet that wouldn’t be better off with Big Data. The real question is whether or not it’s worth the cost. In the overwhelming majority of implementations, the ROI on Big Data simply isn’t there. Yes, it can help, but at what cost?
Are You a Data Based Company?
Companies like Facebook and Google are obvious examples of companies that benefit from Big Data. Major retailers like Walmart and Target also employ big data to help them optimize their retail experience.
These companies have millions of points of data they need to bring together to help them make decisions. From transactions to tweet mentions, they bring it all together. This is what makes big data so expensive. To track, analyze and report so many touch points is not easy. You need a massive investment in IT infrastructure.
So how do you tell if you’re a big data company? The first thing to look at is the data you currently collect. If you mostly enter and analyze it by hand (transactions, store traffic, sales, etc.) you’re probably too small to worry about big data. It’s not that you couldn’t find value it in, it’s just likely that you won’t see a return on the massive investment of changing your current tech to implement the tools needed for big data.
If you’re a company that sells products that connect to the internet (or The Internet of Things), you could be set up perfectly to use big data. In fact, your business likely requires big data to work effectively.
Can You Handle Centralized Data?
Just tracking and acquiring data isn’t the most expensive part. It’s analyzing and storing that data in a secure manner. Once you make the large investment of collecting data, there is an equally large investment need to store the data. There are all kinds rules and regulations you may have to follow in order to be compliant.
If you’re collecting customer data, credit card, and personal information, almost every country has some sort of rules regarding how this information must be stored and secured. Data breaches are not uncommon, and big fines can be levied on companies that break these rules. Target’s data breach could reach close to 4 billion dollars.
Many departments may be pushing for implementation of big data without fully comprehending the costs associated with storing and protecting that data. These costs will make a very dramatic impact on your ROI when implementing this strategy.
What Will You Do with The Data?
This sounds like a no-brainer, but having a plan for the analytics you’ll be collecting is key. If you’re in the group that wants to collect data just so you don’t fall behind when you actually need it – you could just be spending money now that you don’t need to.
You shouldn’t be spending money on big data until you have a plan. Tech changes way too fast to invest for a “maybe later” scenario. Despite this advice, many companies do. The Harvard Business Review found that it’s rare that the data is actually used for decision making.
“…we’ve conducted seven case studies and interviewed executives at 51 companies to understand how companies generate business value from data. We have found that those that consistently use data to guide their decision-making are few and far between.”
The article also goes on to talk about what has happened to those that are using big data.
“The exceptions, companies that have what we call a culture of evidence-based decision making, have all seen improvements in their business performance—and they tend to be more profitable than companies that don’t have that kind of culture.”
Just purchasing the expensive equipment and implementing the policies won’t make your company successful. You still need to ensure those that have access to the analytics will use them.
What’s The Verdict?
If you’re currently using data to drive your business decisions, and you simply can’t keep up with the amount of data you’re collecting with your current infrastructure, it might be time to look at implementing big data.
If your decision-making process is made more difficult because you’re missing some metrics you’d like to see, you could also be a good candidate. You really need to ask yourself if you can get this data by current methods before investing in new IT, though.
Resources are limited. Ultimately, you have to determine if your Big Data investment will help drive your business towards more success, or whether the money is best spent elsewhere. If you’re just looking to “increase sales”, that’s probably too simplistic. Further training of employees is much cheaper, and will likely yield better results for smaller companies.
Whatever decision you make, there is a vast difference in what those 400 brands offer for Big Data services. Do your homework, balance your life and work talk to your key managers, and see if the solution you’re looking at will really work for you.