Are Indian companies making enough sense of Big Data?
- WEF Davos 2018: Barclays CEO Jes Staley warns against 2006 like complacency
- Narendra Modi’s Davos speech reason of pride for Indians: Amit Shah
- PM Narendra Modi meets Canada PM Justin Trudeau at WEF Davos 2018
- Telangana BJP chief starts month-long tour to expose ‘failures’ of state govt
- Bullet train in India a new challenge: Hitachi chairman Hiroaki Nakanishi
Mumbai: It’s no exaggeration to say that Big Data analytics, the process of capturing, managing and analysing massive amounts of data to generate useful information, was in part responsible in helping the Bharatiya Janata Party (BJP) and its allies secure the biggest election victory in more than three decades.
Taking a leaf from US President Barack Obama’s 2012 campaign that took recourse to analytics to garner votes, the BJP moved beyond just having a presence on social media websites such as Facebook, Twitter or Google Hangouts to holding workshops to educate candidates about social media practices, employed reputation management and analysis tools to identify and nurture social media influencers and enhance its brand.
While governments and politicians have historically been early adopters of newer technologies like Big Data analytics—the US National Security Agency’s much-criticized use of analytics to pry on conversations being a case in point—big companies the world over are following suit and are using sophisticated software to analyse the mountains of semi-structured and unstructured data, looking for hidden patterns, trends or other insights to help them better tailor their products and services to customers, anticipate demand and improve performance.
Companies are using analytics for everything from driving growth, reducing cost, improving operational excellence, recruiting better people to completely transforming their business strategy, according to a September 2013 report by consulting firm KPMG and lobby group Confederation of Indian Industry (CII).
In Singapore, for instance, Citigroup Inc. keeps an eye on customers’ credit card transactions for opportunities to recommend them discounts in restaurants. Santander Bank in Spain, the report said, uses analytics to send out weekly lists of customers who it thinks may be attracted to particular offers from the bank, such as insurance, to its branches.
Tesco PLC applies sophisticated analytics tools to its supply chain data to cut waste, optimize promotions and stock fluctuations, helping it save £100 million in annual supply-chain costs. WalmartLabs, the technology arm of Wal-Mart, acquired predictive analytics firm Inkiru in June 2013 to bolster its ability to create better customer experiences through data, the report said.
Big Data broadly involves three steps—storing data with master data management solutions and frameworks like Apache Hadoop (an open-source software framework for storage and large-scale processing of data-sets on clusters of commodity hardware) and Google Inc.’s BigQuery.
Next comes processing the data with tools like customer relationship management, business intelligence and statistical tools, and finally companies have to use, or apply, the insights culled from the data in their respective sectors.
How companies are using analytics
Telecom services providers such as Bharti Airtel Ltd and Vodafone Business Services, for instance, analyse usage and charging patterns with the help of predictive analytics. So do online travel agencies, e-commerce firms and car makers.
According to Sharat Dhall, president of online travel agency Yatra.com, his firm “is leveraging a combination of in-house and third-party technologies to develop a more holistic and consolidated view of customers and offer more personalized experiences to customers”.
India’s biggest automobile companies including Maruti Suzuki India Ltd, Tata Motors Ltd and two-wheeler maker Hero MotoCorp Ltd, have been sifting through large pools of data that they collect during customer interactions to accelerate decision-making, improve efficiency and sell more vehicles.
During a panel discussion organized by Mint in March, Amitabh Misra, vice-president (engineering) of online retailer Snapdeal, said that “every single decision that we make internally is based on analytics”. He pointed out that about 31% of the e-commerce company’s orders come through our analytics-driven systems.
Indian companies have the advantage of “picking up learnings from global clients”, according to Khanna, who pointed out that some Indian government departments too “are using Big Data analytics amazingly well”. He cited the examples of improved weather and storm forecasts by the country’s meteorological department.
According to Khanna, however, it’s only big companies in India that are applying data analytics to better customer experience and increase revenue while others “are simply learning to store Big Data in data warehouses”.
Banks, for instance, could potentially “map the lives of users” if they analyse all the data they have, such as credit card usage in the country and abroad, ATM usage and online and mobile banking transactions.
“With all this data, banks will know my income, food habits, brands I like, shopping habits, my preference for cash or credit cards, investments I make, etc. A smart decision maker can use all this data to provide me with better offers but as of now, it’s mostly global banks and global retailers that use Big Data analytics effectively,” said Khanna.
The market potential, meanwhile, is huge for vendors of Big Data analytics services.
In a 5 September report, software lobby body Nasscom and CRISIL Global Research and Analytics forecast the global Big Data market opportunity to touch $25 billion by 2015 from $5.3 billion in 2011, and the Indian industry to grow five-fold from the current level of $200 million to touch $1 billion by 2015.
The report added that the information technology services segment will be the major contributor to the Big Data services market.
A 27 June report by software lobby body Nasscom and Blueocean Market Intelligence pegged the Indian analytics market to cross the $2 billion mark by fiscal 2018.
“The availability of humongous un-interpreted data (Big Data), created through global connectivity via smartphones and other smart devices and the need for analysis of consumer behaviour has thrown up plethora of opportunities for the IT sector, which we believe will be the next growth driver,” according to a 30 January report by Edelweiss Securities Ltd.
On 18 April, Wipro said it has increased its stake in US-based Big Data and analytics company Opera Solutions to 12.5%. It had acquired a 6.5% stake in Opera in May 2013 for about $30 million, and analysts said the company might have spent a similar amount to pick up the additional stake. Wipro did not disclose the amount.
Companies have to understand what data to collect, and how to integrate it. Moreover, implementing the right solutions to accurately analyse and interpret the data, and reacting in a timely fashion to insights as they arise, are equally important challenges for companies.
For vendors, the success of Big Data will also depend on a large skilled talent pool. However, it’s the shortage of skilled professionals which may prove to be the biggest challenge for the industry.
The US alone is expected to witness a shortage of 190,000 data scientists by 2018. In India, Big Data analytics and related IT services will create an estimated 15,000-20,000 specialist jobs by 2015.
Arundhati Ramanathan and P.R. Sanjai from Mumbai contributed to the story.
This is the first in a seven-part series.