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How big is Big Data? Very big: companies are capturing trillions of bytes of information about their customers, suppliers, and operations, and multimedia and ordinary people armed with smartphones on social networks will continue to fuel its exponential growth.

Big Data—large pools of data that can be captured, communicated, aggregated, stored, and analyzed—is now part of every sector and function of the global economy. A recently published study from IBM shows that companies that use Big Data to drive their decisions experience 20 times more profit growth and 30% higher return on invested capital.

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SMBs are finding low-cost ways to use Big Data to improve their real-time market insights. I recently worked with a small chain of quick-service restaurants that is using Big Data in the form of a mobile app called Punchh. The application allows them to crunch real-time data from mobile and social sources and combine it with their point of sale data to obtain a 360-degree view on their customers and stores, including visits by location and time of day, orders including specific menu items, reviews and sentiments of reviews, and campaign response rates.  This chain of now has accurate, timely intelligence to make data driven decisions.

Not all businesses are so forward-thinking. Some 85% of new product ideas fail within two years of their launch. Blame it on lack of data and research. “No money, no time and no skills” are the usual excuses. But this oversight often leads to expensive and preventable mistakes. Thanks to falling costs and new tools that display complex databases in ways that even technophobes can read, start-ups can now unlock the secrets of Big Data previously available only to those with big bucks. Your company’s databases can be cross-referenced with the expanding galaxy of information drawn from social networks, and you can reap a competitive advantage that may not only save your money, but your fledgling company, too.

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How are innovators using Big Data to hedge their bets? One way is by predicting the future by studying the past. It’s called “predictive analytics” and you’re probably already using it, in one form or another. Ever made a forecast of next quarter’s revenue based on historical booking data? Or used marketing reports to determine which tactics drive the most profitable sales? Or increased or decreased inventory based on seasonal trends? All of these are forms of predictive analytics that use past data to predict future results.

The New York Police Department employs predictive analytics to fight crime, using data-crunching technology to geo-locate and analyze historical arrest patterns, while cross-tabbing them with sporting events, paydays, rainfall, traffic flows, and federal holidays, to identify what the NYPD considers likely crime hot spots. Such insights can help deploy officers to locations where crimes are likely to occur before they are actually committed.

Still not sure what Big Data can do for you? Here are some tips for putting it to work:

  • Data analysis can increase efficiency and reduce costs through what can be called “process innovation.” Logistics companies are using data to improve efficiency. UPS, for example, is using data analytics to determine the optimal routes for its drivers.  The Internet of Things can reveal new correlations that lead to insight and innovation.
  • Companies can also use data to reach customers more effectively, improve brand reputation, or design products and services for specific audiences (i.e., marketing innovation). For example, Google analyzes search behavior to target advertising; Amazon uses customer data to increase sales through personalized recommendations.
  • Data drives business innovation and creation. There are a growing number of companies throughout myriad industries (including finance, healthcare, energy, education, and more) that simply wouldn’t exist without today’s data science. They’re not using data to run their delivery network more efficiently or to sell more books, but to deliver entirely new products and services—to build businesses that are innovative from the ground up.

The truth is, you can have the world’s greatest idea, but if you have no idea how to take it to market, or even whether a market for it exists, you’re taking a possibly ruinous and certainly needless risk. Whether an innovation will actually succeed—i.e., meet or exceed its business goals—depends on knowing your potential consumers, and it’s a safe bet that Big Data knows more about them than their own mothers do.

Love it or hate it, Big Data is the bullet train to business insights. If you’re not on board, be ready to wave at your competition as they roar past.

Corrine Sandler is a serial entrepreneur, thought leader and top 100 Woman entrepreneur. She is the CEO of Fresh Intelligence®, a custom global market research agency, and the founder and Chief Strategy Officer of ValidateIt™, a technology insight platform. Both businesses build on her mission of making insights and intelligence accessible to the world.


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