What’s The Biggest Data Threat For Businesses? (It’s Not What You Think)

Big Data

What’s The Biggest Data Threat For Businesses? (It’s Not What You Think)

The enormous amount of data being generated every day is changing our world, and has given rise to a term most of us are now familiar with: big data. The sheer volume of data available is just one of the many challenges in working with big data. But perhaps the biggest data threat is one that many businesses don’t see coming.

Big data brings big advantages

Thanks to big data, organizations of all shapes and sizes are gaining unprecedented insights into customer behavior, market preferences and business performance. This knowledge is enabling businesses to make smarter decisions, better understand their customers, improve business processes, increase revenue, and more.

One great example comes from German retail company Otto. Data showed that Otto’s customers were less likely to return items when they arrived within two days, and when the items arrived all together at once, as opposed to separate shipments. This makes sense, but it posed a major challenge for Otto, which, like Amazon, sells products from many different suppliers. Keeping every item in stock so that goods can be shipped together is a tall order. Thanks to big data – to be precise, the data from 3 billion past transactions – the company was able to build a predictive model that could anticipate, with 90% accuracy, what customers would want to buy in the next 30 days. This means the right products can be ordered ahead of time. As a result, product returns have reduced by over 2 million items a year.

In another example, PepsiCo used data to drive sales of a new product: Quaker Overnight Oats. The company was able to identify the most valuable shoppers to market the product to – pinpointing 24 million priority households from a dataset of 110 million households. After a carefully targeted launch campaign, these priority customers drove 80% of the product’s sales in the first 12 weeks after launch.

There are many challenges associated with big data. When I work with business leaders to help them develop their data strategy, often the first pitfalls or challenges they think of are around technology or skills. In other words, without the technical infrastructure, in-house knowledge or vast budgets of companies like Amazon or Facebook, many business leaders think the advantages of big data are beyond their grasp.

But thanks to big-data-as-a-service (BDaaS), technology and skills pose less of a problem than you might think. BDaaS essentially refers to the delivery of big data tools and technology – and sometimes even the data itself – through software-as-a-service platforms, meaning companies can access big data tools without having to invest in expensive infrastructure or new hires. As these off-the-peg data and analytics tools become more advanced, my hope is that technology, infrastructure, and skills will become less daunting barriers to working with data.

Data security is another challenge that business leaders cite, and with good reason. As data becomes an increasingly critical business asset, the need to protect that data (particularly personal data) becomes even more vital. That’s why every business needs a robust data security policy in place, and must take steps to educate employees on the potential threats. Most businesses are all too aware of this need, though. What are they less aware of?

Continue Reading

What’s The Biggest Data Threat For Businesses? (It’s Not What You Think)