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Firms Stepping Up Investments in Big Data

Companies are continuing to invest in big data technology in a quest to gain advanced business insight and drive value to the bottom line.

shutterstock 136771145 300x300 Firms Stepping Up Investments in Big DataIn fact, 64% of organizations are investing or planning to invest in big data technology this year, compared to 58% in 2012, according to new research from Gartner Inc.

Still, less than 8% of those responding to the survey have deployed these technologies, Gartner notes.

Of the 64% of organizations investing or planning to invest in big data technology, 30% have already invested in the technology, 19% plan to invest within the next year and an additional 15% plan to invest within two years. Media, communications, banking and services are the industries leading big data investment.

“The hype around big data continues to drive increased investment and attention, but there is real substance behind the hype,” says Lisa Kart, research director at Gartner. “Our survey underlines the fact that organizations across industries and geographies see ‘opportunity’ and real business value rather than the ‘smoke and mirrors’ with which hypes usually come.”

Of the organizations that have made big data technology investments:

  • Seventy percent have moved past the early knowledge gathering and strategy formation phases and into piloting (44%) and deployment (25%)
  • Among those planning to invest during the next two years, 80% are in the earlier stages (knowledge gathering and strategy phase)

Companies are using big data and big data analytics to attack a wide array of business problems, according to the survey.

For example, in Gartner’s 2102 and 2013 studies, business cases that improve process efficiency and those that revolve around customer experience are at the top of the respondents’ agendas.

This year, 55% of firms say that they are currently focusing on enhanced customer experience using big data, while 49% are using big data to boost process efficiency.

Additional survey findings include:

  • The majority of use cases to date are incremental to current business practices, including better understanding customer needs, making processes more efficient, further reducing costs and better detecting risks
  • Forty-two percent of firms are developing new products and business models, while 23% are monetizing information directly
  • Retail, insurance, media, communications and banking are among those sectors driving the customer experience priority when it comes to big data
  • Process efficiency is a top priority for manufacturing, government, education, healthcare and transportation organizations

The survey finds that companies are struggling most with knowing how to gain value from big data.

Firms are also struggling with various hurdles when it comes to big data projects, notably not starting projects with questions, notes Forrester Research Inc. Analyst Martha Bennett acknowledges that this may seem to fly in the face of the potential for big data to discover new patterns and gain new insights.

“Such successes don’t start with a data scientist or other expert simply ‘exploring’ the data or running random algorithms,” she notes. “Sure, such techniques will yield results; but without context, there’s no way of telling whether these are noise or signal. Consequently, there’s at best no business benefit; at worst, decisions may be taken that are actually detrimental to the business. In addition, a lot of time typically gets wasted on aimlessly ‘wandering about’ amid the data, trying to see what there is to be seen.”

Typical goals of big data projects may include improving customer service, boosting targeted marketing or reducing costs, she adds. Or, a firm may launch a big data project to address a pain point like customer churn, excessive returns or frequent network outages.

“In all cases, understanding the goal yields a question, or set of questions,” Bennett says. “Just like with an Internet search, these may be modified once the first results are in. But the focus remains, and hence the likelihood of success. And because there’s a clear link to what’s important to the business, it’s also less likely that funding will get turned off. But when it comes to business-facing projects, it is essential that the starting point is a question, or set of questions, clearly linked to a business goal.”

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