You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
As entrepreneurs, many of us like to quantify things into numbers we can understand. This penchant for clarity has driven brands to advertise online, a medium that allows them to track results all the way down to impressions.
Advertising online is increasingly popular because it allows companies to target specific demographics with great precision, but also because it gives decision makers the ability to see results in numerical form. Billboards and television commercials lack that tangible, analytical aspect.
It is fair to say that a whole generation of professionals are coming of age at a time when expert judgment is less important than ever before. Data does all the work, all you have to do is read it.
This maxim applies far beyond marketing and includes nearly every major vertical in business. In fact, data may only just now becoming of age. That is in large part due to the emergence of companies that have developed technology specifically to capture and analyze data that no one has accessed before.
Here are three ways big data is changing the way decisions are made.
Most of the inputs for this article are provided by Tomer Levy, CEO of a technology startup Logz.io that is based out of Israel and New York City.
#1 Testing product efficiency
Companies have developed technology that for the first time can understand what machines are saying. It can be used to track every activity within an IT environment, be that a network, an application, or an entire social media platform. A company could use this platform to watch how people use their application and see down to individual keystrokes what activity is going on. There are a million ways to use that data, and those functions are changing the way decisions are made.
One use would be to gauge consumer interest. In the competitive world of applications, a startup needs to know immediately whether its platform has traction with users or not. All of the investment, all of the man hours, and the creative energy invested into the product would be for nothing if people do not use the app.
But what if data could show you why the app was not being used? The cause might be a simple interface issue, or people might not know how to perform a certain function. It is possible to gain this knowledge when you can track usage with complete precision.
“You can look at the data holistically and identify trends, or you can drill down to specific users to see what an individual experience looks like,” says Levy. “Transparency of this caliber is a game changer for decision makers.”
#2 Saving money
Troubleshooting has been a part of growing a business since the beginning of time. A good troubleshooter is someone who correctly reads the results of a mistake and makes the most logical adjustment possible to fix it and engage consumers. Levy’s company Logz.io is drastically reducing the human factor in this part-art, part-science task by making the troubleshooting process shorter and less prone to mistakes.
“A company does not have infinite time to waste and resources to spend endlessly troubleshooting its system,” says Levy. “When time is not on your side, your first adjustment needs to be the right one, and that is what Big Data can help you do.”
Data can tell you that you need to educate users about how the product works or that you need to scrap certain features altogether. It’s not just solving problems, but also driving business.
Just a few years ago, only the most established companies could afford the kind of data that is now becoming available to small businesses and startups. How this new, data-based reality will change the marketplace is anyone’s guess, but companies that do not leverage this newly-available information are almost certainly going to be left behind.
#3 Making pivotal business decisions
Data is a decision-making tool. Left or right? Backwards or forwards? You would not make a decision like that without consulting a map. But thousands of companies still rely on the intuition of a CEO to make a decision based solely on his or her expertise.
The time of hunches and educated guesses is coming to an end. The work of reading data and understanding what it means is just beginning. That can and should radically change the business landscape, particularly in the technology sector.
“Our company makes a data product, but we also use data just like any other company,” says Levy. “We make important decisions based on what the data says. There is no bias, opinion or ego in data, and you ignore it at your own risk.”
The time for objective decision making using big data is now. A lot of small businesses can benefit from the innovative tools available today.