In 2012, Gartner defined big data as “high-volume, high-velocity, and/or high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery and process optimization.” Essentially, big data is a humongous and highly complex data set, or collection of data sets, that average software cannot capture, store, or analyze. The data includes everything from online purchases to interactions with friends on Facebook to Census data like demographics and education.
While merely having more data to analyze benefits companies, big data also provides additional information from the analysis of a large data set compared with smaller, separate sets of data. Having access to usable and transparent data results in a myriad of insightful and helpful information, including everything from business trends to peer influence among customers to traffic conditions. This allows you to more easily and precisely tailor your product and/or service, as well as make better decisions and even become more innovative.
Hence, big data can dramatically affect your business by giving you greater insight into your buyers, the market, effective selling and marketing tactics, and even your competitors and employees. Obviously, big data can help you increase your operating margin and bottom line. According to a report by McKinsey & Company’s Global Institute in 2011, U.S. retailers could experience a 60% increase in operating margin through the use of big data. However, you may be surprised to learn it can also help you reduce expenditures. The same report by McKinsey & Company’s Global Institute states U.S. healthcare could create more than $300 billion in value every year, two-thirds of that from an 8% reduction in expenditures.