in Blog

October 24, 2023

Big Data and Knowledge Management: Business Benefits

Author:




Artur Haponik

CEO & Co-Founder


Reading time:




9 minutes


According to a report by BARC Research, businesses that leverage big data see a profit of 8% to 10% and a significant decrease in overall operational costs. [1] However, between 60% and 73% of enterprise data is never used for analytics, which means that up to three-quarters of all collected data goes unused. [2] This begs the question, how can businesses effectively analyze and derive actionable insights from collected data? That’s where big data knowledge management comes into play.

This guide will delve into the intricacies of big data knowledge management, evaluating everything from what is big data and knowledge management to how it can benefit your business. We’ve also thrown in several big data and knowledge management examples.

What is big data and knowledge management?

Big data (BG) is a broad term used to describe all the policies, processes, and technologies used for data gathering, management, and storage. It can also be described as any data that contains greater variety and arrives in increasing volumes and at high velocity. These characteristics of BG are also referred to as the five Vs.

big data features

Once collected and stored, these datasets are so voluminous that traditional data processing software can’t manage them. That’s why most organizations fail to leverage big data to identify and solve business problems.

Fortunately, there are several software applications that allow businesses to manage, extract valuation reports, and analyze trends from big data. However, being able to view and extract information from BG is only one step of the process. To leverage it effectively, you also need to manage it effectively to derive meaningful insights. That’s where knowledge management comes into play.

Knowledge management is the process of managing collected data and extracting information from it in order to improve and grow business performance. It encapsulates everything from capturing, distributing, and utilizing organizational knowledge.

When utilized correctly, it can transmute available raw data into comprehensible information, which can then be used to derive meaningful insights and inform business decisions. Therefore, to get the full value of collected data, businesses need to combine BG with knowledge management. This way, they can collect, manage, and analyze collected data for actionable insights.

The role of knowledge management in big data

Big data has expansive potential for providing actionable insights – there’s just no way to harness it effectively. That’s where knowledge management comes in. When combined, knowledge management leverages big data’s expansive data sets by performing analytics, thereby harnessing valuable insights from the data.

Essentially, knowledge management acts as the tool that excavates value from big data. It achieves this by first identifying, collecting, and aggregating datasets in BG for analysis, classifying the data to make it more accessible, and then storing it.

Once in centralized repositories, knowledge management can ensure better data governance by using data mining and analytics techniques to derive actionable insights from the data. What sets knowledge management apart from other data management techniques is that it also supports knowledge sharing and collaboration by enabling different employees and departments to leverage collective expertise and insights through various collaborative tools.

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Benefits of big data and knowledge management

Big data provides the gateway for organizations to uncover valuable insights from data collected from disparate sources. When properly leveraged, knowledge management can help businesses uncover valuable insights from this data and make it available to business leaders and other employees, thus acting as a knowledge base for the entire organization.

This fact alone opens up a huge range of possibilities that have the power to revolutionize business processes. Here are some of the most notable benefits of big data and knowledge management in business:

Benefits of big data and knowledge management

Enhanced decision making

With technology and customer needs and preferences evolving at such a phenomenal rate, businesses can no longer rely on instinct or anchor their strategies on past patterns. Fortunately, when merged, the capabilities of big data with knowledge management can overhaul the decision-making process, enabling businesses to make decisions and devise strategies based on real-time information.

This is especially vital for large organizations, which need a unified view of relevant information to facilitate effective decision-making at all tiers.

Higher-quality knowledge across the board

Business intelligence involves more than just giving top-level employees the information they need to make good decisions. It involves having an effective framework for information sharing throughout the organization.

By giving all departments and employees access to real-time organizational information, you can help them make better decisions and improve processes and service delivery expediently. You can also be able to track improvement in specific areas and determine what works and what doesn’t in regard to specific aspects of business.

Improved innovation and product development

The COVID-19 pandemic changed the market forever. In just a few months, everything from customer behavior to market trends and competitor strategies had taken a new turn. Businesses were trying to keep up lest they become irrelevant and shut down- that’s what happened to any business that wasn’t able to leverage real-time information in its decision-making process.

BG provides businesses with valuable, real-time insights into market trends, customer behavior, and competitor strategies. When leveraged correctly, these insights can offer an extensive knowledge base for product development and innovation.

Take a company developing a new smartphone, for instance. Big data can provide valuable insights on market trends, user needs, preferred features, and any complaints about similar products. With this information at hand, the company can use knowledge management to derive insights that fuel innovative designs that address all current market needs.

Risk management and mitigation

Any organization without a proper risk management roadmap and resources to back it up is at constant risk of failure. That’s why up to 36% of organizations plan to increase their investments in risk management and compliance in the next two years. [3]

When leveraged correctly, BG and knowledge management can help detect potential risks and challenges. By helping businesses monitor extensive data in real-time, these concepts can help businesses identify potential issues and provide a roadmap for responding proactively.

Streamlined operations

Streamlining business operations can help save time and cut operational costs. [4] By performing extensive analysis of big data, businesses, and organizations can effectively expose bottlenecks, process gaps, and inefficiencies. Applying knowledge management to this analysis further enhances business capabilities to build a reliable framework to make these insights actionable, thus promoting operational refinement.

Big data and knowledge management examples

The business value provided by BG and knowledge management is more than just a concept. It has infiltrated every aspect of modern-day business, with numerous companies leveraging its numerous benefits to improve operations.

Here are a few examples of big data and knowledge management in retail:

Amazon

Amazon is one of the largest online marketplaces in the world, earning over $514 billion in net sales in 2020 alone. [5] The company achieves this incredible feat by constantly using big data and knowledge management to improve customer experience.

For instance, Amazon has a dynamic pricing strategy that changes product pricing up to 2.5 million times a day to respond to current market trends. Based on several factors, including shopping patterns and competitor prices, Amazon is able to change product pricing to improve competitiveness and boost profits.

Amazon also uses big data and knowledge management concepts in its product recommendations. Whenever a customer buys a product or even looks at it, the company stores this data and uses it to gauge individual customer preferences. This way, it can better recommend more relevant products, leading to more sales.

Netflix

Netflix, the biggest online platform for streaming movies and TV shows, owes its success to incorporating big data with knowledge management. By employing these practices, the company has maintained a customer retention rate of 72%, which is much higher than its competitors. [6]

Everything you do on the platform, including watching a show and how long you spend on the show, what you look at but never watch, and everything in between, is logged and analyzed to gauge your interests. With time, the company is able to tell what you’re interested in and how it can improve your experience.

Starbucks

The Starbucks logo is one of the most recognizable logos in the world. Infamous for writing the wrong names on its customers’ cups, Starbucks has one of the most effective personalization strategies out there – and it makes good use of it. In fact, it’s one of the best examples of big data and knowledge management in retail.

The company typically collects data by providing its customers with reward programs through mobile apps that help it learn more about each customer’s buying habits. With this data, the company is better able to recommend products, improve service delivery, and identify potential locations for new stores.

Final thoughts

Big data and knowledge management are some of the biggest driving factors for success in modern business. In a bid to ensure success and maintain competitiveness, businesses need to constantly reevaluate their products and service delivery to match market trends and evolving customer demands. The benefits of big data and knowledge management are not limited to specific businesses but rather transcend all forms of business. Find out more about Big Data Consulting Services.

References

[1] Bisurvey. com. Big Data Benefits. URL: https://bi-survey.com/big-data-benefits. Accessed October 20, 2023
[2] Enterpreneur.com. How Companies Are Using Big Data to Boost Sales and how You Can Do the Same. URL: https://www.entrepreneur.com/science-technology/how-companies-are-using-big-data-to-boost-sales-and-how/325923, Accessed October 20, 2023
[3] Gitnux.com. Risk Management Statistics. URL: https://blog.gitnux.com/risk-management-statistics/. Accessed October 20, 2023
[4] Symphony, co. The UK, Streamlining Your Business: the Benefits and the Statistics, URL: https://cymphony.co.uk/2023/06/02/streamlining-your-business-the-benefits-and-the-statistics/. Accessed October 20, 2023
[5] Statista.com.  Amazon. URL:  https://www.statista.com/topics/846/amazon/#topicOverview, Accessed October 20, 2023
[6] Zippia.com. Netflix Statistics. URL:  https://rb.gy/sxkvh.  Accessed October 20, 2023



Category:


Big Data