HOW BIG DATA IS SHAPING THE FUTURE OF SMALL- AND MID-SIZE COMPANIES
Big data, Artificial Intelligence (AI), Internet of Things (IoT) and 5G are transforming the business world. According to a survey by NewVantage Partners, 97.2% of C-level executives said their companies are investing in, building or launching big data and AI initiatives.1
Organizations across the globe are realizing untapped potential in operational efficiency, customer experience, talent creation, product development and profitability. With this high potential also comes additional risks that should be considered. We look at the transformative nature of big data from three perspectives: the potential benefits, effects on the workforce and new information security risks from using these technologies.
HARNESSING BIG DATA
By appropriately leveraging big data and using the insights it garners, companies are able to improve their business models. Here are some examples of how advanced technology could enhance your competitive advantage:
Improved business intelligence
Big data allows companies to compile millions of pieces of raw data, deriving information that can be used for predictions, modeling and/or scenario analysis. Leveraging the information could provide insights into process, financial and information flows, working capital cycles, customer behavioral analytics, and more. This information can be used to help refine planning and forecasting models over longer time periods.
In utilizing big data, AI can make a tangible impact with advanced decision-making capabilities, influencing more processes and tasks, improving client experience, and creating more business intelligence. With 5G and the cloud, companies can take data from more diverse sources with near limitless storage and processing power. For example, the auto industry is using high-speed communication provided by 5G and advancements in AI to introduce more autonomous vehicles and self-driving transport for all.
Enhanced customer experience
The ultimate goal of business intelligence and AI is to improve the customer experience. Companies can use big data to offer services and products using the customer’s own actions and behaviors to help customize the experience. For example, in the healthcare industry they can combine information on pharmaceutical buying patterns with geographical overlays allowing the detection of emerging health problems that could predict or prevent a flu outbreak. Also, emergency services could be mobilized to deal with localized issues — deploying resources where they are needed most.
BIG DATA AND THE WORKFORCE
The growth of information and data has created new job opportunities, as well as new skill requirements, for the workforce. Companies, governments and universities are working together to prepare tomorrow’s employees today with the knowledge and skills to tackle these challenges. Early signs of these changes can be seen already, for example:
Demand for skilled talent
While some believe technology will eliminate jobs, others argue it will create new jobs for skilled workers. The transition could be as dramatic as the changes experienced in the industrial age, when production lines and automation techniques radically enhanced productivity in manufacturing. As big data and AI grow, data scientists and data experts are among the most highly coveted workers in the IT field. Low unemployment rates and a strong economy create challenges for companies seeking top talent for these roles, forcing companies to look at nontraditional sources to find talent. Instead of recruiting directly from universities, companies like Catalytic are finding their workforce directly from code academies or apprenticeship programs through community colleges. Others are paying for current employees to advance their education in these fields, as many now consider it more beneficial to hire those with advanced degrees in data science than MBAs.
Big data benefits HR
By embracing big data’s predictive and analytical nature, HR departments can make more informed decisions about recruiting and performance. For example, employers can use big data to determine where to distribute resources and find employees with relevant skill sets. It can also influence existing staff by better understanding factors that increase and decrease productivity by evaluating new methods of workflow, similar to employees on a production floor many years ago.
POTENTIAL BIG DATA PITFALLS
While big data is an emerging field that carries significant benefits, companies should develop strategies to address new challenges as well:
Compiling large quantities of customer data, particularly sensitive information, elevates a company’s operational and reputational risk. A cyberattack can damage customer trust and loyalty. According to a 2018 AtScale survey,2 respondents consistently named security as one of the top challenges of big data, and in the NewVantage report, executives ranked cybersecurity breaches as the single greatest threat their companies face. Before embracing big data, companies must understand the risks and develop safeguards to protect customer privacy, while also complying with government regulations.
As big data is applied throughout an organization, companies must create a data-driven culture, regardless of role. With this new, fluid data stream, organizations will need to develop an approach to handle the influx of real-time information. This approach will affect work culture and may require restructuring, which takes time, money and manpower. Under the helm of CEO Dawn Zier, Nutrisystem was able to turn the company around by insisting every business decision be made through a data-driven lens. This cultural change helped the company increase its revenue from $367 million to $691 million and increase its operating income sevenfold in just six years.
It’s clear that big data has significant benefits, especially for customer satisfaction, but those benefits come with risks. Competing in today’s data-driven business landscape requires an awareness of both aspects to be truly transformational for your company and customers.
1NewVantage Partners, 2018
22018 Big Data Maturity Survey, 2018