It may seem like the initial buzz surrounding big data was just starting to spread yesterday, but it’s official: Big data is the norm now—and it’s here to stay. We’re officially part of the data economy—where the numbers behind your products matter almost more than the product itself.
In May 2017, The Economist wrote that data is the new oil, saying that, “Many a battle will be fought over who should own, and benefit from, data.” The publication’s comparison of oil and data became immensely popular, and we can understand why. Similar to how oil refineries created real products and entire economies of their own, data is doing the same digitally.
Unfortunately, many organizations aren’t prepared for an economy where data is the hot commodity—one with an unending amount of legalese surrounding use. Without a data strategy in place, businesses stand to miss out on big opportunities. After all, this new data economy isn’t about storing data—it’s focused on knowing what to do with it in near real-time.
Data’s moving—with or without you
The data economy’s already a burgeoning industry—IDC predicts that the sheer volume of data stored will be 44 zettabytes by 2020. For context, a single zettabyte is 1 million petabytes or, in more familiar terms, 1 trillion gigabytes. That’s a ton of data, and it’s finally getting good, too. As tech solutions, like machine learning, have matured, we’ve started understanding that information better, and we’re getting good at sifting through it and extracting value.
The data economy exists because data’s become deeply valuable. A large data set allows you to apply insights immediately and make decisions based on real statistical samples. Marketers can analyze a huge set of information to decide which ads will prove most effective for online visitors, for example, and creators can use that information to see how people interact with their tools.
Witness the data economy in action
Uber and Airbnb are two of the best examples of the data economy in action. These companies embraced data to drive their decision making. Uber recently announced that algorithms will analyze data in real time and charge customers what it thinks you’re willing to pay rather than a flat rate.
The pricing model uses machine learning combined with mapping and other information to decide whether someone going from a wealthy neighborhood to another spot might pay more than a person traveling to a poorer part of town. That, naturally, comes with concerns, but that type of insight can help Uber rake in the profits from its most valuable customers.
Airbnb uses big data, as well, to help hosts decide on a great price for their listing, given that many homeowners don’t know what the going rate for a room is in their own city. Hosts can look at a calendar for each day of the year and see whether their prices are competitive for that specific time period, which reportedly makes them four times more likely to get a booking.
Using data like this is incredibly valuable to companies and will likely shape all businesses going forward—if they choose to allow it.
Stay in the game with a data strategy
You may have a data scientist already, but Gartner predicts that 90 percent of organizations will also have a chief data officer by 2019 to guide their strategies on how to best profit from that digital gold.
The most important thing you can do today? Nail down a data strategy. You need a plan to gather key data and store it, then focus on actually doing something useful with it. Raconteur writes that as algorithms for crunching that data become available to the masses, it’s key to have your big data clean and ready for analysis.
Identifying how data can help your bottom line—even indirectly—is also vital to moving forward. Raconteur also reported that 37 percent of businesses found that leveraging their data improved decision making, while 30 percent said it improved customer satisfaction and reduced operating costs.
Big data and the data economy aren’t just reserved for large enterprises. It works at smaller scales, provided you begin investing early. If you’re considering big data and want to be part of the new economy, focus on having a plan in place, even if you don’t have the data yet—or you’ll risk someone else swooping in and eating your piece of the pie.