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Using Big Data for Innovation
It’s possible that big data analysis can bring very insightful ideas and these ideas give competitive advantage in the markerts. Using big data may change the role of innovators and even who the innovator is. It’s getting more important to innovate how to collect, store, organize, analyze and share the data (Gobble, 2013). The innovator might not necessarily be the one creating the innovative product, rather selecting the data sets and analyzing tools through which data mining produces new innovations. However, there will always be needed insightful people to select the relevant results and bosses who see the value of this data mining result.
Examples of innovations? Links?
Paychex provides payroll, human resources, and employee benefits services, primarily to small businesses. Paychex loses about 20% of its customer base each year as not all small businesses find it easy to survive. Erika McBride, manager of predictive analytics at Paychex explained how they developed a model that predicts high risk customers and can track what the Paychex branches are doing (or not doing) in terms of increasing customer retention. Based on the model, some branches developed a year-end retention program, targeting clients most likely to leave by providing free payrolls and loyalty discounts. Turns out that when the retention strategy was applied, the customer loss rate was 6.7%, as opposed to 25.2% loss rate when nothing was done. (Press, 2013) (Other examples could possibly used from this source as well.)
Gobble, MaryAnne M. 2013. Big Data: The Next Big Thing in Innovation. Research-Technology Management , Vol. 56, No. 1 , January-February 2013. Abstract available: https://www.questia.com/library/journal/1G1-315069436/big-data-the-next-big-thing-in-innovation. [2015-3-21]
Press, Gil. 2013. 7 Observations From The Big Data Innovation Summit. Forbes. http://www.forbes.com/sites/gilpress/2013/09/16/7-observations-from-the-big-data-innovation-summit/. [2015-3-23]