Have you ever wondered what big data is and how it affects you?
In a nutshell, big data is exactly what it sounds like: the collection of large amounts of information that businesses analyze to discover trends or patterns that help them solve problems, predict outcomes and make improvements.
This gathered information includes traditional and digital sources, like data gathered from business transactions, emails, activity logs and social media. Companies like IBM, Visa and Frontier Business Edge are all using big data to improve both their services and their margins.
The power and potential of big data was being considered as far back as the 1940s, when a librarian at Wesleyan University began estimating the growth rate of information housed in libraries. A Japanese census in 1975 confirmed that the production of information was bypassing its yearly consumption. And by 1980, the first data storage systems were already being utilized worldwide to organize and track this information.
Data managers and analysts can track these results and begin to predict things like prime purchasing and downloading times. Due to the sheer volume of big data (it is called "big"data after all), it can be difficult to link or understand big data without a skilled analyst.
By 2009, nearly every area of the U.S. economy had an average of 200 terabytes of stored data. As a consumer, it can feel intimidating — and perhaps invasive — to know that companies are gathering such large amounts of data about you. On the whole, though, companies are using this data to improve their services for you.
How companies use big data affects you in a variety of ways. First, it makes raw information more usable. As companies store things like transaction data, they are able to more accurately track and record their performance. They can track everything from product inventory to employee sick days, and then analyze this information to uncover weak points within company infrastructure. Visa, for example, uses big data to help reduce credit card fraud.
Second, big data allows for-profit companies, the health care industry, and education sectors to tailor their services based on their typical consumer base. It's how Amazon, for example, provides customized recommendations for products you might like based on what you have recently viewed or purchased. Caregivers can use big data to create customized treatment plans and provide tailored services for patients. Products like budgeting apps and wearable fitness trackers use big data to offer consumers a way to understand their own data by analyzing their patterns and habits for them.
Big data can also significantly improve how companies make decisions, reduce costs, and create new products. Because of their ability to segment and track metrics on a larger scale, companies can make more informed decisions — which they can then pass on to you, the consumer. By tracking big data, companies can offer services like proactive maintenance on new products before catastrophic failures ever occur.
As big data usage grows, it could also create jobs — more and more data analysts and data managers will be needed to accurately make use of this information. One thing is for sure: big data is here to stay.