DEFINITION of Big Data
Big data refers to the growth in the volume of structured and unstructured data, the speed at which it is created and collected, and the scope of how many data points are covered. Big data often comes from multiple sources and arrives in multiple formats.
BREAKING DOWN Big Data
The increase in the amount of data available presents both opportunities and problems. In general, having more data on one’s customers (and potential customers) should allow companies to better tailor their products and marketing efforts in order to create the highest level of satisfaction and repeat business.
Companies that are able to collect large amount of data are provided with the opportunity to conduct deeper and richer analysis. This data can be collected from publicly shared comments on social networks and websites, voluntarily gathered from personal electronics and apps, through questionnaires, product purchases, and electronic check-ins. The presence of sensors and other inputs in smart devices allows for data to be gathered across a broad spectrum of situations and circumstances.
Challenges of Using Big Data
While better analysis is a positive, big data can also create overload and noise. Companies have to be able to handle larger volumes of data, all the while determining which data represents signals compared to noise. Determining what makes the data relevant becomes a key factor. Furthermore, the nature and format of the data can require special handling before it is acted upon. Structured data, consisting of numeric values, can be easily stored and sorted. Unstructured data, such as emails, videos, and text documents, may require more sophisticated techniques to be applied before it becomes useful.
Big data is most often stored in computer databases and is analyzed using software specifically designed to handle large, complex data sets. Many Software-as-a-Service (SaaS) companies specialize in managing this type of complex data. Data analysts look at the relationship between different types of data, such as demographic data and purchase history, to determine whether correlation exists. Businesses often use the assessment of big data by such experts turn it into actionable information. Such assessments may be done in-house within a company or externally by a third-party who focuses on processing big data into digestible formats.
Nearly every department in a company can utilize findings from data analysis, from human resources and technology to marketing and sales. The goal of big data is thus to increase the speed at which products get to market, to reduce the amount of time and resources required to gain market adoption, and to ensure that customers remain satisfied.