The impact of big data analytics on business operations and decision making

The volume and variety of data generated have reached unprecedented levels in today’s digital era. In 2010, the total amount of data created, captured, copied and consumed globally was 2 zettabytes (one zettabyte is equal to a trillion gigabytes). By 2022, that number had grown to 94 zettabytes. 

This avalanche of information in collected data presents both challenges and opportunities for businesses across all industries. The emergence of big data analytics has revolutionised the way organisations operate, make decisions and gain competitive advantages.

We explore the essence of big data analytics, its influence on business operations and business value, and its pivotal role in driving informed decision-making processes.

What is big data analytics?

Big data analytics is the process of examining vast and complex data sets to uncover patterns, correlations, and actionable insights. Data comes in three states.

1. Structured data: the easiest type to search and organise, as it will be contained in rows and columns and its elements can be mapped into predefined fields. 
2. Unstructured data: accounting for the largest percentage of the world’s data, cannot be contained in a row-column database and is more difficult to search and analyse.
3. Semi-structured data: a combination of structured and unstructured data as it has some consistent characteristics but isn’t rigidly structured.

Extracting valuable information from large volumes of data involves sophisticated analytics techniques and technologies. Some of these methods include:

• Data mining: the process of searching and analysing a large batch of raw data in order to identify patterns and extract useful information.
• Machine learning algorithms: an artificial intelligence method where a system conducts tasks and predicts output values from data without explicit instructions.
• Predictive analytics determine future performance based on current and historical data.
• Data visualisation tools translate information into visuals such as maps or graphs to make data easier to understand and pull insights from.

What are the 3 Vs of big data?

The concept of big data analytics revolves around the ‘3 Vs’ – volume (the amount of data), velocity (the speed of data processing), and variety (whether data is structured or unstructured, and the types of data, such as text, images, and videos).

In recent years, two additional Vs have been added to this model – veracity (how accurate the data is) and value (how valuable the insights gleaned from data are to the business).

What is the impact of big data analytics on businesses?

The impact of big data analytics on business intelligence is profound and multifaceted as it drives numerous positive changes.

Business operations optimisation

Big data analytics optimises business processes across industries. From supply chain management to healthcare initiatives, the application of analytics tools enables organisations to streamline operations, enhance efficiency, and reduce costs.

For instance, a company can use predictive analytics to forecast customer demand, thereby optimising inventory management and ensuring a smoother supply chain.

Informed decision making

Data-driven decision-making has become the cornerstone of successful businesses. By leveraging big data and analytics, companies can make more informed decisions.

These better decisions are backed by insights derived from the analysis of large data sets, enabling businesses to identify trends, understand consumer behaviour, and anticipate market changes.

Enhanced customer experience

Big data analytics empowers businesses to understand their customers better. By analysing customer data, including social media interactions and purchasing patterns, organisations can personalise offerings, tailor marketing strategies, and improve overall customer experience.

Effective pricing strategies

Private companies leverage big data analytics for pricing strategies. They can analyse market demand, competitor pricing, and consumer behaviour to set optimal prices for their own new products and services. This approach maximises profitability and maintains competitiveness.

Competitive advantage

Businesses that harness the power of big data analytics gain a competitive edge. They can have the ability to analyse competitors, market trends, and consumer preferences, allowing them to adapt swiftly, innovate in their field, and develop strategies that outperform rivals.

How does data analysis affect decision making?

The integration of data analysis into a business’s decision-making process has multiple significant positive effects.

Real-time insights

One of the key advantages of big data analytics is the provision of real-time insights. Decision-makers can access in-depth, up-to-the-minute information, enabling agile responses to market changes and making timely decisions crucial for business success.

Predictive capabilities

Predictive analytics empowers organisations to forecast future trends and outcomes. By analysing historical data, businesses can make proactive decisions, anticipate risks, and capitalise on emerging opportunities.

Data-driven strategies

Data-driven decision-making allows organisations to create and execute strategies based on tangible evidence rather than intuition. It helps in aligning business initiatives with market demands, improving the effectiveness of business models and driving innovation.

The benefits of big data in various sectors

The advantages from using big data can also be used for public good, and as interest in using this method grows in the private sector, the applications for use in the public sector to benefit society are also starting to be seen.

In the healthcare sector, the use of big data analytics can play a pivotal role in optimising care and the service provided. Various data sources can be used to analyse patient records, medical research, and treatment outcomes, enabling healthcare providers to enhance diagnostics, personalise treatments, and improve patient care.

The future of big data analytics

The impact of big data analytics on making better business decisions is undeniable. From optimising processes to gaining insights that drive strategic decisions, the utilisation of large data sets has become indispensable in today’s business environment. Organisations that harness the power of data science are better positioned to thrive in an increasingly competitive and data-centric world.

The evolution of big data analytics continues to shape the business landscape, and the market is predicted to grow at a rapid pace. In 2023, the global market was valued at $307.52 billion and it is projected to grow to $745.15 billion by 2030, exhibiting a compound annual growth rate of 13.5%. As technologies advance, the role of big data will expand further, influencing business strategies, operational efficiencies, and decision-making processes.

Become a sought-after specialist in data-driven success

As the field of business analytics grows and becomes more driven by the accrual and analysis of quality data, professionals with skills and knowledge in up-to-date data technologies are more in demand than ever.

Prepare yourself for a leadership position in this exciting area of information technology with an MBA with Data Analytics from Abertay University. This degree is taught entirely online and you have the option to study either part-time or full-time, allowing you to fit your learning around your current commitments.

You will develop core business skills in managing stakeholders across a business and setting metrics for success, while specialising in data analytics and gaining an understanding of effective data collection and data management, deepening your analytics capabilities and competencies.