Keep Big Data Analytics in Perspective
Big data is beginning to have an important impact on business strategy. Because of the increasing importance of big data, keeping data analytics in perspective is good business practice. Companies are beginning to realize that they can begin leveraging data throughout the planning cycle rather than at the end.
As the big data market begins to mature, companies will be able to run their business based on a data-centric view of the world. Predictive analytics, for example, is making it possible for companies to understand the small and subtle changes in customer buying patterns so that they can make changes in strategy earlier.
For example, Walmart uses social media data to determine what new products customers are starting to demand earlier in the cycle. It is difficult for a retail company to change the products already on store shelves. If a company can predict changes in customer buying preferences six months in advance, it can have a huge impact on the bottom line.
It is easy to assume that all a company needs is to create a big data platform and the strategy will just happen. The reality, of course, is much more complicated. While big data will be an important business tool, a danger exists in relying too much on data alone.
Business leaders need to make sure that they do not trust the results of big data analytics in isolation from other factors that cannot easily be codified into an algorithm.
You find subtle issues such as what strategies are practical in light of changing business conditions. You’ll see emerging trends or a changing competitive landscape that isn’t showing up in the analysis. Senior leaders also bring intuition and knowledge to the table. So before you assume that big data is the panacea for all business strategy issues, make sure that you are taking a balanced approach.