Monday, April 7, 2014

Social Media and Big Data

This article begins with comments made by the president of Oracle, Mark Hurd.  He states Big Data spending is growing at a rate of 40% annually, which accounts for 10% of the IT budget. Hurd believes the emergence of social media is a major cause for the increase in demand for using large amounts of data in supply chain applications. Hurd spoke with a Director of Supply Chain Planning for a major international brand about how they now use social media, and mobile promotions, to control the balance of supply and demand. He discovered they sell perishable items, so a highly responsive supply chain is needed. To achieve this goal, they have a network of national warehouses serving regional warehouses with nightly deliveries based on the most recent demand data. Control of supply and demand is maintained by stocking regional warehouses with what will be promoted the coming week via social media and mobile promotions in the region. This company uses their social media presence to develop and launch successful new products based on customer feedback. The company is able to fund this operation by selling at greater profit margins due to brand recognition. It would be more difficult for a small and lesser known company to achieve such success in this way, as they would not have the same money or resources at their command; however, the concept could be something to adapt into their current practices.

Social media is the new go-to department in every company. Everyone you know has a Facebook, Twitter or even a LinkedIn profile. Companies have learned this is an essential piece of their customer’s daily lives and have expanded their teams to specifically reach out to them. However, many companies are still in the early days of employment for social media related positions and most are way behind in trying to analyze this social media data. “We have millions of tweets about our brands, thousands of Facebook “likes,” hundreds of thousands of check-ins on Foursquare. Pinterest and Instagram are adding even more to social-media data deluge.” This all amounts to the “Big Data” that companies have to now try and keep up with. “Big data” refers to a companies growing ability to collect large amounts of information, analyze it instantly, and draw sometimes profoundly surprising conclusions from it. However, do these companies fully understand what all this data is? Companies need to train people to make sense of this data. In order to make sense of this data, companies will need to hire data analysts who specialize in making use of the overwhelming amount of new data created every day. “You will need a strong database person to put the data into forms that can be analyzed. You also will need statisticians who can understand the data and its impact. You must have people adept at understanding behavioral data. The data we are receiving from social media is vastly different from the static, transactional data we had previously gathered. It is unstructured, fluid, mobile and often contradictory.”

Data analysts can help improve the bottom line of any organization by forecasting how to either increase revenues, save money, or mitigate risk. For example, the company that sells perishable items has to operate daily deliveries of their items to retail outlets. A data analyst may be able to optimize the routes of the delivery trucks based on inventory and projected demand. Thanks to the advanced inventory systems and analysis tools offered by companies such as Oracle, the supply chain can be optimized to greater detail than ever before.

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