Data is the latest addition to the arsenal of every business – be it service, manufacturing or retail. Availability of data on customers has opened up a new avenue for companies to understand and customize the requirements to provide customized solutions to each and every customer. It has led to a war for customers in a scale that brings the Cola Wars from the 1980’s and 1990’s to shame. The market in every sector has become an open battlefield and no one can claim their stake with certainty. Working hard for success is no longer the norm in business, working smart is. The more smartly you handle the data, the more likely you are to succeed.
According to International Data Corporation (IDC) report, “total revenues from big data and business analytics is estimated to be $187 billion in 2019″. This is bound to increase even more with the ever increasing adoption of the digital lifestyle by people. Every day, thousand of Terabytes of data is being produced, each unit of data providing an unique insight into the lifestyle, choices and preferences of the sophisticated individuals of the 21st century. Each new insight into the lifestyle of people is providing more information on what they are likely to buy, what they might buy, what they can be manipulated to buy. The time when machines will understand us better than ourselves is not a far fetched possibility anymore.
These human behavior pattern understanding computer algorithms have been used to great effect by a lot of companies who have effectively used Big Data to conjure groundbreaking profits and and techniques of cost savings. According to NewVantage Partners Big Data Executive Survey, 48.4% of corporate executives say that their firm has achieved “measurable results” from their Big Data investments. Big Data is impacting and bringing about large scale positive changes in terms of Operations, Marketing, Human Resources Management, Distribution and Sales, Logistics, Finance and pretty much in every area in a company’s functioning in an unprecedented scale. McKinsey recently conducted a study to understand and showcase how companies in the US will be impacted with the adoption of big data in their operations and found that, with the adoption of big data,
- US healthcare will generate $300 billion value per year.
- US retail will see 60% increase in their net margin.
- Manufacturing industries will notice up to 50% decrease in product development and assembly costs.
A lot of companies have already got a sniff of the potential that big data carries and have already setup an architecture in their operations in which core business operations are heavily influenced by Big Data such as,
- Starbucks
Starbucks has been at the forefront of Big Data implementation. Using data collected from their reward programs and mobile app, they understand the customers habits and preferred coffee choices. Now when a customer walks into one of their stores and waits in line at the counter to place their order, their preference of order is already displayed to the Baristas. This becomes particularly useful during the busy hours when the waiting time is reduced considerably. The company also uses this data/information to build more relevant marketing campaigns and promotions, decide future menu updates and even decide locations for new stores. The coffeehouse takes information on location, traffic, area demographics, and customer behavior into account to study the prospect of a new branch. This is one of the major reasons why Starbucks has been able to open multiple outlets in the same street and still not suffer loss in any of the outlets.
- American Express
This financial service company, by looking at historical transactions incorporating more than 100 variables have employed sophistical models to find and understand potential customer churn and customer loyalty. American Express claims that in their Australian market, they are able to identify 24% of accounts that will close in the next 4 months. In addition to this, their system takes structured and unstructured data from claims databases and handwritten adjuster notes to identify possible fraud. - General Electric
This famous company which was founded by Thomas Elva Edison has been using data from sensors on machinery like Jet engines and Gas turbines to monitor the functioning, predict maintenance and identify ways to improve the machinery’s processes and reliability. The company has estimated that data could boost productivity in the US by 1.5%, which, over a 20-year period, could save enough cash to raise the average national income of the US by as much as 30%.
- UPS
The logistic company makes over 4 billion item shipments per year through 100,000 vehicles. The company has been using on-truck telematics to understand routes, engine idle time to optimize the efficiency of its large fleet in addition to making calls on predictive maintenance for its vehicles. Since starting the program, the company has saved over 39 million gallons of fuel and avoided driving 364 million miles. Their next step includes completion of the roll-out and applying the operational efficiency to their airplanes.
- Internal Revenue Service America and the city of Chicago
The Internal Revenue Service(IRS) of America has been using Big Data to identify and stop theft, fraud and improper payments of taxes. The IRS has been successful in recovering over $2 billion over the last 3 years.
The city of Chicago has placed sensors around the city which measure air quality, air intensity, sound volume, heat , precipitation, wind, and cell phone traffic to count pedestrians to manage traffic and keep out a vigilance on possible crimes.
Nepal has also made some strides in implementation in Big Data with KMC recently rolling out a plan on trial basis to monitor traffic and pedestrian movement with the help of sensors that monitors and systematizes the time duration of traffic lights as per the vehicular and pedestrian movements in different parts of the city. The infrastructure in Nepal to utilize big data to drive business decisions and manage operations is still in its nascent stages. The economy has not been digitalized enough, the supply chain still functions traditionally and the sectors do not have the data infrastructure in place to collect, analyze and derive insights based on the market metrics at hand.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Global News break or any other agencies.
