2014-02-18 11:07

How to forge a succesful business from data

While there’s a general discussion going on the importance and value of information in business, a more significant issue is lost from sight. Companies have always been gathering data, but with its enormous growth in form of Big Data, it is the quality of information and analytical capabilities that are decisive in the struggle for success – writes Tomasz Lechowicz, business advisor at Gemius.

If one wanted to identify the greatest value for business today and the source of competitive advantage, data would certainly be among the top choices. Information – its quality, storage standards and the skills in processing and analysis – is the most precious capital. The ever-advancing process of globalization and the dwindling barriers in international trade mean that getting the upper hand on competitors becomes a greater challenge. It is not the price or the product’s or service’s country of origin that are decisive any more.

In the contemporary economy, building up and maintaining advantage over competition is founded on several qualities, such as the ability to react quickly and to access the relevant information in time.

Data overflow

According to International Data Corporation (IDC), by 2020 we’ll have accumulated 35 zettabytes (i.e. 35 billion terabyte) of stored data globally, which would constitute a 44-fold growth in the amount of information from 2009. Most analysts believe that even as much as 85 per cent of new information is non-systematized data, e.g. text, network registries, videos or photos. At the same time, business increasingly requires real time decisions taken in immediate response to a piece of information.

In the vastness of Big Data – sets of data stored by business organizations – the tools that take lead allow fast analysis and selection of data in view of their quality, practicality, and warranting conclusions. These instruments should be used in tactical planning and building strategy.

It began in America

It’s not about theory, though. It’s about the application of knowledge in practical solutions. The first victorious campaign of Barack Obama already showed how deep the changes in media and communication channels are. The re-election campaign, in turn, was a perfect illustration of how a set of gathered data can be efficiently applied in brisk election fund-raising and precise targeting of a campaign message to the selected US voters. Most importantly, the way the presidential campaigns were run was the first proof of the fact that the television has lost ground to the new media. It is not the number of ordered spots broadcasted on the cable channels that ensures supremacy, but a perfectly planned and carried out online campaign involving social media, mobile tools, and most importantly, skilfully gathered and processed data. Dan Wegner has become one of the priceless, yet inconspicuous architects of the 2012 Obama’s success. His team of data analysts working for the Obama campaign headquarters was ten times larger than the analogous group headed by Alex Lundry and working for Mitt Romney. This shows not only the scale of commitment, but first and foremost, the Democrats‘ awareness of the huge significance of the new media and Big Data in today’s world. And an election campaign, especially one on such a scale, is largely comparable to an ambitiously conducted business strategy. No wonder the cover of American MIT Technology Review features the U2 frontman Bono with a caption reading „Big Data will save politics”.

The internet, including e-commerce solutions, is the perfect source of data on customers and a natural place to put it into practice. The largest players such as Amazon, eBay or LinkedIn utilize these advantages, processing terabytes of user data on a daily basis. At eBay 25 per cent of employees – around 7500 persons – are responsible for analysing data. The effects of their work are not only used for the basic marketing activities, but more importantly, for incessant optimization of products (for eBay this would mean the sales platform). Nevertheless, the increasing demand for analytics gives anyone, irrespective of the size of their business, a chance to employ innovative tools for processing Big Data and forge the abundance of available data into their own success.

Not only does such approach allow to take strategic decisions based on knowledge, but also improve customer care, thus fostering the relation with clients. This is possible with the use of electronic communication channels. Among the services rendered or sold over the internet, the cutting edge information processing systems are able to provide an individual profile of every single customer. The information may be hammered out into a personalized sales message, or even used to predict the current consumer needs based on their behaviour.

Market practice

The companies who implemented advanced tools analysing the data they gathered noted a 5-6 per cent increase in profitability compared to similar businesses that operate in the traditional ways – i.e. not tapping into Big Data. This is shown in the results of the research carried out by MIT Center of Digital Business (2012). Since the products and services offered by competing companies quickly become similar to one another – a growth of just a few per cent in profitability is in fact a huge advantage.

According to Gartner of Stanford, companies developing state-of-the-art information management systems will outdistance the competitors in their segments by 20 per cent by 2015. Furthermore, McKinsey confirms that organizations employing business data and information analytics in decision-making processes are more effective and gain better return on capital compared to those who don’t do that.

A recent report compiled by McKinsey Global Institute (“Big Data, The Next Frontier for Competition”) claims that in the US alone the market needs 140 to 190 thousand employees specializing in gathering data, and further 1.5m managers who will analyse the gathered data for business implementation. This paints a picture of the great potential and challenge for the markets that Big Data is. Because a large number of market trends, in particular those based on IT solutions, is born in the USA, one may conclude that soon these practices will come to Europe, too. They are, as a result, an important hint for the Polish business.


Business organizations gather increasing amounts of data, both internal and those coming from the market. Big Data itself has been in place for quite some time, but the challenge is to skilfully use the data, and in practice – fast processing of this data, which then may be used in business with the use of the right analytical tools.

Big Data implementation in the world (in percentage)

No action -- 24
Planned action -- 47
Pilot schedule and tools implementation -- 28

Source: “Analytics: The real-world use of Big Data. How innovative enterprises extract value from uncertain data”, IBM, June 2012

Big Data sources (in percentage)

Transaction* - 88
Logging in (online) - 73
Events - 59
E-mails - 57
Social media - 43

* data from the current business activities (e.g. what, how and how much is bought by customers/ business partners)

Source: Analytics: “The real-world use of Big Data. How innovative enterprises extract value from uncertain data”, IBM, June 2012

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