Why is Big Data so important?
In my last posting, I suggested that establishing the capability to “harness” Big Data directly impacts a company’s ability to increase the generation and protection of operating profits and competitive advantage. You could say; what’s new about a focus on profit, we do that every day? Let’s explore linking Big Data and corporate profitability a little more.
In a recent on-line video, I was asked, “Why is Big Data such a big deal?” I answered the question using the following scenario:
A consumer walks into a store to buy a coffee maker for his wife as an anniversary gift. He scans the barcode for the model she wants and enters it into an app on his mobile device to see if he can buy it cheaper through another retailer. The consumer sees that just a half mile away he can purchase the same item for 5 dollars less than the price he sees in this store. Now, one of the retailers has set the price of the product based on a corporate margin calculation. The second retailer knows the exact margin of that product for that store which takes into account all of that SKU’s transactional costs including the change in their fuel surcharges that were incurred two weeks ago.
Which retailer is going to win?
Companies are beginning to focus on harnessing Big Data but there is a lot of confusion regarding the “WHY”. The attached article offers information from a Gartner survey on that very point: https://readwrite.com/2013/09/18/gartner-on-big-data-everyones-doing-it-no-one-knows-why#awesm=~ohUJBlny4JeJN4
In my opinion, learning how to repurpose fragmented data (data that is captured within and outside of your supply chain operation) into actionable insights will be the key to innovation and future success. Success measured by increasing revenue growth and operational efficiencies and therefore sustained increases in profit and market share. This is further emphasized by the following quote:
“Innovation is the ability to convert ideas into invoices.” - L. Duncan
Companies that take Big Data seriously will maintain significant market advantage. In fact, it has been suggested that the processing power of the cloud coupled with Big Data best practices will create “Disruptive” solutions to the status quo. This is much bigger than just adding technical capabilities to process large amounts of data or to connect two different data sources together to conduct data mining. Big Data has the power to transform the way companies will succeed in meeting shareholders’ expectations.
We would appreciate hearing your thoughts and comments. All the best, Richard
