Big data analytics is quickly gaining adoption. Enterprises have awakened to the reality that their big data stores represent a largely untapped gold mine that could help them lower costs, increase revenue and become more competitive. They don’t just want to store their vast quantities of data, they want to convert that data into valuable insights that can help improve their companies.
As a result, investment in big data analytics tools is seeing remarkable gains. According to IDC, worldwide sales of big data and business analytics tools are likely to reach $150.8 billion in 2017, which is 12.4 percent higher than in 2016. And the market research firm doesn’t see that trend stopping anytime soon. It forecasts 11.9 percent annual growth through 2020 when revenues will top $210 billion.
Clearly, the trend toward big data analytics is here to stay. IT professionals need to familiarize themselves with the topic if they want to remain relevant within their companies.
What is Big Data Analytics?
The term “big data” refers to digital stores of information that have a high volume, velocity and variety. Big data analytics is the process of using software to uncover trends, patterns, correlations or other useful insights in those large stores of data.
Data analytics isn’t new. It has been around for decades in the form of business intelligence and data mining software. Over the years, that software has improved dramatically so that it can handle much larger data volumes, run queries more quickly and perform more advanced algorithms.
The market research firm Gartner categories big data analytics tools into four different categories:
- Descriptive Analytics: These tools tell companies what happened. They create simple reports and visualizations that show what occurred at a particular point in time or over a period of time. These are the least advanced analytics tools.
- Diagnostic Analytics: Diagnostic tools explain why something happened. More advanced than descriptive reporting tools, they allow analysts to dive deep into the data and determine root causes for a given situation.
- Predictive Analytics: Among the most popular big data analytics tools available today, predictive analytics tools use highly advanced algorithms to forecast what might happen next. Often these tools make use of artificial intelligence and machine learning technology.
- Prescriptive Analytics: A step above predictive analytics, prescriptive analytics tell organizations what they should do in order to achieve a desired result. These tools require very advanced machine learning capabilities, and few solutions on the market today offer true prescriptive capabilities.
Benefits of Big Data Analytics
Organizations decide to deploy big data analytics for a wide variety of reasons, including the following:
- Business Transformation In general, executives believe that big data analytics offers tremendous potential to revolution their organizations. In the 2016 Data & Analytics Survey from IDGE, 78 percent of people surveyed agreed that over the next one to three years the collection and analysis of big data could fundamentally change the way their companies do business.
- Competitive Advantage In the MIT Sloan Management Review Research Report Analytics as a Source of Business Innovation, sponsored by SAS, 57 percent of enterprises surveyed said their use of analytics was helping them achieve competitive advantage, up from 51 percent who said the same thing in 2015.
- Innovation Big data analytics can help companies develop products and services that appeal to their customers, as well as helping them identify new opportunities for revenue generation. Also in the MIT Sloan Management survey, 68 percent of respondents agreed that analytics has helped their company innovate. That’s an increase from 52 percent in 2015.
- Lower Costs In the NewVantage Partners Big Data Executive Survey 2017, 49.2 percent of companies surveyed said that they had successfully decreased expenses as a result of a big data project.
- Improved Customer Service Organizations often use big data analytics to examine social media, customer service, sales and marketing data. This can help them better gauge customer sentiment and respond to customers in real time.
- Increased Security Another key area for big data analytics is IT security. Security software creates an enormous amount of log data. By applying big data analytics techniques to this data, organizations can sometimes identify and thwart cyberattacks that would otherwise have gone unnoticed.
This article originally appeared in Datamation. To read the full article, click here.