Big data. Chances are you will have heard this term being referenced somewhere, whether it's in the office, on TV or in passing in a news article. There's a reason why it's being spoken about so much. In 2012, big data became one of the biggest technology and business topics discussed in the media, across social networks and increasingly in the board room. What's more, the economic implications of big data are enormous. In a study we commissioned with the Centre for Economics and Business Research (Cebr), we found that by harnessing the value in big data through analytics, the UK could add £216bn to the economy over the next five years. That's a huge amount of money with the potential to transform many of Britain's industries.
But what actually is big data? And what does it mean to the man on the street? Think about how you communicate with your favourite brands, your bank, or even your local council. Most, if not all of these institutions will have various ways for you to get in touch with them - phone, email, and through the website. Perhaps there's even an official Twitter feed where you can leave your feedback on that pair of trousers you bought last week or a recent experience at your GP. In essence, the more touchpoints we use to communicate with one another - mobile, laptops, email, electronic forms, paper forms - the more information we're generating about ourselves.
Although these new ways of interacting with one another are convenient for us, they pose a challenge and equally an opportunity for organisations in managing, analysing and making use of this growing data. This could be socio-demographic information, or insight into what you bought from Sainsbury's last week. Organisations then look to use this information to offer you better deals and more efficient services.
So why should we excited by big data? Believe it or not, as you go about your everyday lives, you're surrounded by examples of big data in action. A good example to start with is loyalty cards. If you shop at Tesco, you may be the holder of a Tesco Clubcard. Every time you pop into the shop to buy your weekly groceries, you'll use your Clubcard at the checkout to redeem points in proportion to the amount you spent in that one trip. Tesco will then send you vouchers at the end of the month - maybe £5 or, if you're lucky, £10 off your next trip. You may even be surprised by some of the other vouchers that they send you - 50p off your next purchase of pasta sauce or £1 off shampoo.
You may be questioning how Tesco knew that you liked pasta sauce and that particular brand of shampoo, but all the supermarket has done is use the data captured by your Clubcard to identify what you like to purchase. These types of loyalty schemes, which are widespread among high-street retailers, can have great benefits for both the brand and the consumer. By collecting fine grained data on your preferences, retailers can make sure that you receive the best offers on your favourite products in the most efficient way.
So how else can big data help you? If you live in a city like London or Paris that has a complex and interwoven transport system, then big data can help you get from A to B. At the moment, there are a variety of apps for mobile devices that will track the location of your bus and how many minutes away it is from your stop. No more waiting indefinitely in the cold for that dreaded bus. Citizens of London will also be familiar with the live travel news and service updates provided by the Transport for London website. Passengers can cross-reference start points, destinations, various means of transportation and timetables, as well as information on track closures or incidents affecting travel. Many of London's bus stops now include 'countdowns' - real-time information boards that track the next 10 buses due to arrive at your stop and the time to wait for each one.
But real world uses of big data aren't just limited to loyalty cards and transport services. Big data is also responsible for powering the many health monitors and applications now available on PCs, smartphones, tablets and in pedometer format. It can even help to run music streaming services or identify fraudulent activity on your credit or debit card.
In summary, big data is not just for the board room, it's for the consumer too. Companies are increasingly starting to recognise the value of big data, with one in five large businesses in the UK assigning financial value to their data on the company balance sheet. This means that, in doing so, they are responding to the demands of their customers. Other businesses and consumers are driving change, adopting new technologies and prompting businesses to react accordingly. Big data analytics can be used to make sense of all this data; to gain valuable insights and be predictive about what is going to happen in the future, based on the data we already have today. This enables businesses to make better decisions faster, and create increasingly innovative ways to provide the services and products we rely on. The next time you wait for a bus or stream music online, have a think about what lies behind that service or how you're receiving that information. It's probably down to data.