Intelligent use of large amounts of data
Wirtschaft im Südwesten, Regio-Report IHK Hochrhein-Bodensee, Series Wirtschaft digital: Interview with Ralf Walther about Big Data.
Article: Wirtschaft im Südwesten 5/2018
Mr. Walther, what is Big Data anyway?
Unfortunately, the term Big Data is used in very different meanings. On the one hand, it refers to a new problem area that has arisen as a result of the progressive digitalisation of all areas of life. Ever larger amounts of data from increasingly different data sources must be evaluated and processed as quickly as possible. On the other hand, the concepts, solution approaches and the software tools used for them are also entitled Big Data. This offers room for confusion and misunderstanding. Data analysis and the use of the results are not really new. However, due to the changed quantity and quality of today's data, new concepts and tools had to be developed to meet the growing demands. For example, a data project with less than one million data records can be a big data project if it has to meet the corresponding analysis and access time requirements. But the definition of terms is not quite as sharp.
What are the advantages for companies of analyzing this volume of data differently in the future?
The amount and level of detail of data from the individual business areas is constantly increasing, as are the opportunities and possibilities for evaluation and use. However, it is also becoming more difficult to find the right data for one's own added value. If in the past you might have associated your customers only with the sales made per week and with your own advertising measures, today you can link the minutely scheduled marketing campaigns with the corresponding purchases via the online shop; of course, taking into account the current weather on site of the customer. Depending on the industry and company size, this is almost standard today. But smaller companies can also benefit from this development, for example in sales or production. Production conditions and processes already provide an incredible amount of data and parameters. Often this offers potential for cost savings in resources or help with production errors.
Will this be the future?
I think people are just beginning to understand the changes that are taking place. Due to the rapidly growing digitalization, the targeted analysis of data will establish itself as a standard process within companies. The scope and characteristics will of course strongly depend on the company's requirements and will therefore also vary. But no company or responsible citizen can avoid the question of what data and how it is going to be used.
What are the challenges in terms of data protection and personal rights? And how must this be dealt with in advance?
Compliance with legal requirements is of course mandatory, and a lot has changed here. The EU General Data Protection Regulation (GDPR) and the new Federal Data Protection Act, which come into force in May of this year, must be observed. Whenever personal data is involved, the demands placed on companies are particularly high, which means that when planning analyses and using such data, you always have to take into account the effort involved in checking and monitoring the legality of the measures. In general, an assessment of the impact of data analysis and use should be an integral part of data projects, because the impact is not always immediately visible.
Are there industries for which the use of Big Data could be particularly interesting?
Of course, those companies whose business model is already fully digital have a certain home advantage because the data is automatically generated in the individual areas. They were also first confronted with the problems involved and had to find new ways out. However, the potential in the more industrial companies is enormous, the size is not decisive. If, for example, the analysis of production data at a certain point in the production chain reduces scrap by one percent, this can lead to significant cost savings. In marketing and sales, approaches for increasing sales through data projects can usually be found across all industries.
How do I best proceed if my company wants to exploit the potential of Big Data in the future? What is the first step?
In any case, you shouldn't let the press drive you crazy about Big Data or Artificial Intelligence. The data train is already moving, no question about it, but every company can identify the benefits in a targeted manner and should not act hastily. At the beginning, the company should ask itself which data is available and which data could be made easily available. It may sound trivial, but it is essential to define a measurable goal for verification. Do you want to increase sales for a specific product or in a specific market? Should the brand be strengthened? Does the company want to understand the customer structure so that it can better address the individual customer segments? Should the machines be optimized or better utilized? The areas of application are as diverse as the companies themselves. In any case, the mistake of setting up a data project by making a great song and dancing about it and not checking the effects afterwards must be avoided. A negative effect is also a gain in knowledge and can be used for the next adjustment of the optimization process.
Interview: Sunita Patel