by Angela Guess
Forbes contributor Bernard Marr recently wrote, “It’s easy to get caught up in the hype of big data. Huge datasets, fast-moving analytics, complex and diverse data sources are hot right now, but it’s important to understand that big data would be nothing without the little data that goes along with it. Little data, what I call traditional performance metrics, are key to the success of any big data project. These KPIs are what measure the success of any given company. They might include customer retention rate, conversion rate, market share, or any of dozens of other metrics that determine how well your company is doing. Without good Key Performance Indicators (KPIs) it is impossible to have good big data initiatives.”
Marr goes on, “Data, on its own, is practically useless. It’s just a huge set of numbers with no context. Its value is only realized when it is used in conjunction with KPIs to deliver insights that improve decision making and improve performance. The KPIs are the measure of performance, so without them, anything gleaned from big data is simply knowledge without action. For example, a retail company could use a big data initiative to develop promotional strategies based on customer preferences, trends, and customized offers. But without traditional KPIs such as revenue growth, profit margin, customer satisfaction, customer loyalty or market share, the company won’t be able to tell if the promotional strategies actually worked. You’ve heard the old chestnut, what you measure grows? This is true for companies of every size and in every field. Without the right metrics to measure growth, you cannot know if the decisions and initiatives you’ve made based on data analytics are having the desired effect.”
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