Big Data in Business: Digital Transformation for Enhanced Decision-making and Superior Customer Experience

Introduction

The term “Big Data” refers to the very large and diverse sets of structured, semi-structured and unstructured digital data from different sources that accumulates and grows very rapidly on continuous basis. Big data is so huge that traditional computational methods are incapable of processing it. Gartner, the world's leading research and advisory company, defines big data as “high-volume, and high-velocity or high-variety information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making, and process automation”. According to IBM, big data is a term applied to data sets whose size or type is beyond the ability of traditional relational databases to capture, manage, and process the data with low latency. On the other hand, big data analytics is the use of advanced analytic techniques against these huge data sets. Big data analytics enables to uncover hidden patterns, correlations and other insights from huge data sets. From these two definitions it can be understood that big data term not only requires data-gathering strategies but also involves a wide range of analytical capabilities and skills. The big data is not a new concept and it has been around for years, however only recently it has gained popularity due to technology advancements which have enabled large sets of data to be analyzed faster and efficiently. Thanks to the recent developments in artificial intelligence and data analytics, extracting critical insights from big data and smart decision-making based on this processed data have become more and more possible. According to Statista (2020a), the global big data market (i.e., relevant software, hardware and services segment revenues) is forecasted to grow to 103 billion U.S. dollars by 2027, more than double its expected market size in 2018.

According to IBM, every single day 2.5 quintillion bytes of digital data is created in various types of digital platforms. That rate accelerates even more with the proliferation of the Internet of Things (IoT) and artificial intelligence technologies. The current daily data creation rate is so high that 90 percent of existing data in the world has been created in the last two years. As of 2019, 59 percent of world’s population is online which means that more than 4.5 billion people are connected to the Internet via various types of computing devices (Statista, 2020b). These online users are actively using diverse type of platforms such as social networking, entertainment, e-commerce, education, health, etc. On these online platforms, huge amount of data is generated by users in every given second. For example, in a single minute more than 4 billion Youtube videos are watched, nearly half million tweets are sent, nearly 47.000 Instagram photos are posted, nearly half million Facebook comments are posted, and more than hundred million spam emails are sent (Forbes, 2018). In today’s highly competitive online business environment, ignoring that amount of data would be a very big mistake for businesses. A very high number of businesses have understood that this huge amount of accumulating data is invaluable source for improving their operations and offerings. Therefore, a lot of businesses have started to invest considerable amount of money to the big data technologies. Thanks to low cost of data storage online business owners are able to store all of these data generated by online users on various platforms. However, for online businesses, being able to store huge amount of digital data is only small stage in the long big data journey. What is important in big data is that how to process it with advanced analytical techniques and derive useful insights and take right actions at the right time in order to stay ahead in the competition.

Big data technologies enable enhanced decision making in businesses. Through these technologies, businesses are able to allocate their scarce resources efficiently, cut operational costs, improve business operations, and increase the productivity of human capital. Big data technologies also enable businesses to better understand their markets. That is, big data enable businesses to uncover hidden patterns behind consumer behaviors and introduce new products and services accordingly. Furthermore, big data also enables businesses to offer personalized products and services that are appealing to each individual customer. Besides providing personalized products and services, big data also enables businesses to carry out scalable and personalized marketing campaigns aimed at the right users, at the right time and in the right form.