Force Multiplier, a noun, means something that increases effect of the force. In military usage, force multiplication refers to “an attribute or a combination of attributes which make a given force more effective than that same force would be without it” (for more, see this).
Big Data, which is characterized by three Vs, namely Volume, Variety and Velocity can be a major force in running of any large or medium sized businessas as it adds tremendous value by improving quality of decision making. Thanks to Big Data revolution, it is possible to process large volumes of structured and unstructured data in real time and derive insights from large data sets. This by itself is a huge improvement over pre-Big Data era.
What’s even better is that predictive analytics makes it possible not only to analyze the past, but predict the future too with high degree of confidence level. For example, social media data can enrich risk modeling and help auto insurance companies prepare much better risk profile of an individual. Car sensor data can help auto insurance companies better assess risk posed by a driver’s habits (like speeding, fast acceleration or braking) and come up with auto insurance policy tailored to that specific individual with individual level premium (not at a zip code or a city level).
Another good example is assessment of customer life time value (CLV). Using big data, companies can come up with much better assessment of customer life time value. What makes it even better is that predictive modeling can be used on social media or sensor data in arriving at a much better estimation of CLV so that companies can better target customers with high CLV. This has been very effectively used in Travel and Hospitality industry.
Point I want to highlight here is that Big data is a revolution in itself as it enables organizations identify, store, process and analyze data sets from outside the organizations in a way which was not possible thus far. Add predictive analytics to this mix and it pushes Big Data capability to a whole new level – a true force multiplier. Don’t you agree?
Question is how many large and medium sized companies are in a position to take advantage of not only Big Data revolution, but also effectively leverage Predictive Analytics for driving better insights and decision making. Not too many in my opinion. What do you think? Please do share your opinion: