You may have been hearing about how big data is a powerful tool that can help organizations gain valuable insights, improve their efficiency, and cut costs. But before deciding whether this will hold true for your business, it’s important to consider the pros and cons of big data. Because while it’s true that many companies have harnessed big data and used it to their advantage, there are significant challenges involved in collecting, storing, analyzing, and managing this information. To make it work for you, it’s vital to understand the best ways to utilize big data, and, at the same time, mitigate the risks including data security and privacy that can be associated with its use.
In this article we’ll dive into what big data actually is and weigh up the pros and cons of big data.
Pros and cons of big data: what is big data?
Essentially, big data is a term used to describe the huge volumes of information rapidly generated and collected in both structured and unstructured forms. Think every internet search made, every post on social media, every email sent, every customer transaction made, and every IoT measurement recorded. If it’s stored, it’s part of big data.
As technology spreads throughout society – through mobile phones, smart TVs, sensors and more - the amount of big data grows exponentially. In fact, it’s estimated that every two years, the volume of data across the world doubles in size!
Big data is so voluminous that it’s impossible for traditional data processing software to manage. But it’s possible to invest in big data analysis, which can help a company identify trends, recognize patterns, and gain insights that can offer them a competitive edge.
Pros and cons of big data: the advantages
Improved decision-making
The more information a company has about its customers and potential customers, the more they are able to answer consumers’ needs and anticipate their future requirements. By identifying patterns, correlations and trends, organizations can gain insights they can use in their decision making. Analyzing huge data sets helps them to improve communications and products, as well as reevaluate risks. This enables them to be more disruptive and agile within their market. What’s more, big data can offer companies greater understanding of how their competitors are performing, which will also positively influence business decisions.
Virtually all departments of a large organization can benefit from the careful use of big data, in areas such as marketing, HR, B2B communications, and much more.
Increased productivity
Big data can also be gathered internally to discover trends and insights that can lead to greater efficiencies within the organization. As the old management adage says, “You can’t manage what you don’t measure.”
Reduced costs
According to SaaS Scout, nearly 60% of survey respondents claimed that big data tools helped them reduce costs and increase operational efficiency.
Big data achieves this in a variety of ways, including:
- Facilitating targeted marketing campaigns to reach customers more effectively
- Digitizing supply chains to improve efficiency
- Improving customer service
- Identifying fraud by detecting anomalies
Pros and cons of big data: the disadvantages
While the benefits are clear, the potential dangers need to be recognized and addressed.
Data security risks
Data security breaches often have a devastating effect on a brand’s reputation, and storing sensitive data can make you a target for cybercriminals. If you’re going to utilize the benefits of big data analytics, it’s essential to establish robust cybersecurity measures to protect that data. Not only from public exposure, but also to ensure that it isn’t leaked to your competitors.
Dubious data quality
Insights, strategies, and data-driven decisions are only as good as the quality of the underlying data and analysis. Data with low veracity can lead to decisions that at best, are worthless, and at worst, actively harmful.
Talent shortages
Big data is useless without access to experts who can interpret it correctly. According to a survey by AtScale, the biggest challenge in data analytics is the lack of qualified big data experts and data scientists. These IT professionals command high salaries and it may be unfeasible for startups and smaller organizations to afford the costs involved in hiring the appropriate professionals.
Compliance
The use of big data also demands the need to follow applicable industry and government regulatory requirements. The leaking of personal data through various data breaches has meant an increasing number of regulations regarding the storage, handling and processing of this information. Ensuring compliance for all aspects of data analysis is a significant cost involved in accessing the potential benefits of big data.
Pros and cons of big data: Conclusion
While the advantages for a company of big data analysis are inarguable, the disadvantages are also significant. Every organization needs to weigh up the pros and cons before deciding if they can afford to utilize its power. They must make sure that they can afford to put in place the processes required to overcome the potential dangers.
