Effects of big data on business in the 21st century
Big data is here and it is here to stay. In actuality, it can only get bigger. Big data is the voluminous amount of data that is collected by organizations on a daily basis as they go about their normal operations. This means different things across different industries; for the medical profession it could refer to the number of patients reporting to a particular centre coupled with their unique medical cases and something as undeniably important as the location they are coming from yet all this information to a large part remains unutilized and untapped by businesses for better business decision-making. These large chunks of information which for the most part remain largely unstructured can be sorted; analyzed and important insights gained from them that could save huge amounts of organizational resources and could guide business along the right path when traditional methods of decision making could have been unable to offer such insights. Big data is everywhere and even small to medium organizations have it, but it is big businesses that are slowly reaping the benefits accrued from the right information. These companies are in industries as diverse as medicine and retail to industries that feed similar supply chains such as banking and investment finance.
The reason why big data is so important right now more than ever is because the world has officially ushered in the knowledge economy. There was an agrarian economy where everything was fueled by agriculture. This was followed by the industrial economy where the world relied on industries to feed the masses and provide income to the world population. Then we ushered in the service economy where the world needed trained professionals to provide services of value. Now, we are in the knowledge economy, everything relies on information and the fuel for this economy is data, actionable data that can be used to improve the human experience. People are no longer in dire need of housing or food or security. There are parts of the world where these issues are a legitimate concern but for the most part, those leaps have already been made. Now, what the world demands and rewards are ideas and innovations that make the human experience much better. The biggest companies in the world that have been created in the last decade do not necessarily create tangible products, they create value and the only way to create value is to know what the people want and give it to them as they demand. Otherwise, you will be weeded out of the pool and replaced by companies that are compliant with this new model of doing business. No one understands this better than people in the retail industry.
The retail industry is a multi-billion industry that is completely reliant on the manufacturing industry. The manufacturing industry is then reliant on the various industries; service, labor and agriculture. For everyone to get a piece from the pie there needs to be a genuine response to the market. You cannot guess what the consumers want, you can try and force it down onto them by aggressive marketing but if your products are of no value people simply stop buying them. Big data has been very useful in responding to consumer demand. Retail centers collect huge amounts of data on a daily basis. This could be data on goods most bought during a certain season, what products are slow moving, what is the peak period for doing company promotions, daily sales, human resource data and general buying trends. Retail companies that mine this data and generate valuable insight off this information create more value to their clients and thus are able to thrive in the market. This information is then passed over to the manufacturers who can then respond to price changes, design adjustments and other changes that could make their customers want to pay for their products. Good information leads to better outcomes and companies that are the frontier of this new adjustment in how business works are reaping big while others who might not want to invest their resources here are slowly losing grip on reality, slowly, but surely.
Big data is not necessarily useful in industries that are solely income focused. Big data is also creating value in the healthcare sector. Medical tests, lab reports and prescribed medication are the backbone of the health industry as it is from this data that decisions are made regarding what the patient needs at that point in the treatment cycle. Some health centers still collect and sort information manually and this is can lead to untold errors that the patient will never know about but that which could largely affect their wellbeing. Hospitals need to have a platform where data on particular patients are aggregated and used to make important decisions that can be used for clinical decision making. Data analysis from all the data collected could point out inefficiencies that could greatly reduce administrative costs. This data could also inform the pharmaceutical manufacturing industry on drug effectiveness based on patient feedback.
Banking is big business and with big business comes big risk. Banks give you money, a very rare commodity in the market and hope, of course after doing some risk analysis that you are going to repay that full amount. This doesn’t always happen as some institutions become greatly strained because of non – performing loans. With all the data collected from clients and from a variety of sources for example telecommunication companies, there exists risk mitigation that has never been there before. Now banks can give you money with a much higher degree of certainty. When access to credit is made easier to the people who deserve it and can actually not renege on their word to pay back money loaned to them, the economy grows as the small and medium businesses with efficient working models can access the only commodity missing in their expansion plans: credit.
Human resources is a big headache for most big companies. This is more prevalent in companies that employ thousands of people, recruitment and people management can be a nightmare. Enter big data analytics for human resources. With big data analysis, managers can spot trends in the market and respond accordingly. They can figure out where the key issues for their employees are, skill gaps that need to be addressed and other such metrics for attaining and keeping talent.
With all this data collected from humans and used to influence decisions in virtually all sectors of the economy, privacy has become a concern. It is now harder to stay anonymous with all the data that is being collected from the internet and other sources. There are concerns that in the wrong hands this data could be used to cause more harm than good. Organizations and custodians of this data should, therefore, aim at being ethical in how they handle this data and countries should embrace the fact that with the advent of the knowledge economy, data is being increasingly available to those with sufficient purchasing power and thus laws should be passed to protect the citizens of their countries. Big data holds a lot of possibilities to improve a lot of the human race and it is up to policy makers to ensure it is only used for the good of the world.