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Role of Big Data in Decision Making

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Role of Big Data in Decision Making OPERATIONS AND SUPPLY CHAIN MANAGEMENT Vol. 11, No. 1, 2018, pp. 36 - 44 ISSN 1979-3561 | EISSN 2759-9363 Role of Big Data in Decision Making Shirish Jeble Faculty of Management IBS Business School, Pune, India Email: [email protected] (Corresponding Author) Sneha Kumari Symbiosis Center for Research and Innovation Symbiosis International University, Pune, India Email: [email protected] Yogesh Patil Symbiosis Center for Research and Innovation Symbiosis International University, Pune, India enabled seamless integration of information systems ABSTRACT between business partners. It enhanced speed of business to business transactions (B2B), communication and reduced Information systems coupled with internet, cloud cost of inter-company transactions. computing, mobile devices and Internet of Things have led to In the next wave in early nineties, arrival of internet massive volumes of data, commonly referred as big data. It includes mix of structured, semi-structured and unstructured further simplified integration of firms with their business real-time data, constituting of data warehouse, OLAP, ETL and partners. In the last decade, information systems coupled information. Business firms and academicians have designed with internet, cloud computing, mobile devices and Internet unique ways of tapping value from big data. There is a great of Things have led to massive volumes of data, commonly scope of using large datasets as an additional input for making referred as big data. It includes structured, semi-structured decisions. The aim of the paper is to explore the role of big data and unstructured real-time data, constituting of data in these areas for making better decisions. Here we explore how warehouse, OLAP, ETL and information. Computer science big data can be used to make smart and real-time decisions for has advanced to store and process large volumes of diverse improving business results. The paper undergoes literature datasets using statistical techniques. Business firms and review and secondary data to provide a conceptual overview of potential opportunities of big data in decision making. The academicians have designed unique ways of tapping value paper discusses the concept of big data, its role in decision from big data. The objective of this paper is to explore the making and also the competitive advantage of big data for role of big data in making better decisions and how big data different firms. The paper also discusses a framework for can be used to make smart and real-time decisions for managing data in decision making. The topic must be addressed improving business results. for taking better decisions for firms which will contribute to The revolution of big data is more powerful than the high quality knowledge. analytics which were used in the past. Using big data helps managers to make better decisions on the basis of evidences Keywords: big data, big data analytics, social media analytics, rather than intuition. Businesses are collecting more data marketing analytics than required for any use (McAfee et al., 2012); big data helps in making better predictions and smarter decisions. 1. INTRODUCTION Leaders across industries use big data for better managerial Information systems have evolved over the years from practices. There are several researches conducted in being transactions recording system to supporting business individual areas such as transactional data, social media data, decisions at different levels. Traditional information systems supply chain big data etc. However, there is lack of holistic depended primarily on internal data sources such as review of understanding potential of big data for decision enterprise resource planning systems (ERPs) for making makers. Driven by this need we explore the role of variety of business decisions. These datasets were structured and used big data in various decision-making scenarios. This paper relational database management system (RDBMS). These acts as a bridge this gap by achieving the following were used for supporting internal business decisions such as objectives: inventory management, pricing decisions, finding out most a) To explore the existing literature on the fundamental valuable customers, identifying loss making products etc. concepts of big data and its role in decision making Besides, data warehouse was built using this data for analysis b) To explore role of big data in making strategic, tactical and mining purpose. These data sources were integrated with and operational decisions. data from business partners such as suppliers and customers The study is useful for making important decisions with using enterprise application integration (EAI) platforms. EAI the help of big data. In the present era, big data has been used Jeble et al.: Role of Big Data in Decision Making Operations and Supply Chain Management 11(1) pp. 36 - 44 © 2018 37 in many business and educational sectors. This has led to make better predictions and better decisions. 2.1 What is Big Data? In the next section, we review extant literature on big Big data has been defined in several ways by several data and how it is gaining significance for business and authors. Boyd and Crawford (2012) have defined big data as society. Here we have reviewed several definitions of big cultural, technological and scholarly phenomenon while Fan data from leading big data and analytics professionals. We et al. (2014) have defined big data as the ocean of also touch upon different ways in which applications of information. According to Kitchin (2014), big data is defined analytics can be classified. Third section discusses various as huge volume of structured and unstructured data. Waller applications and benefits of big data. Here we review how & Fawcett (2013) define big data as datasets that are too large different institutions such as banks or business firms have for traditional data processing systems and therefore require been able to collect, analyze and use big data for enhancing new technologies to process them. Dubey et al. (2015) their business performance. describe it as the traditional enterprise machine generated Role of Analytics based decision making using big data data and social data. Big data is a term that describes the large is nothing new for some of the leading companies. However, volume of data – both structured and unstructured – that there are still many small and medium size companies which inundates a business on a day-to-day basis. But it’s not the can start taking advantage of this emerging field. In the amount of data that’s important. It is what organizations do fourth section, we present a framework on big data that can with the data that matters. Big data can be analyzed for be used by such companies. This framework could be a insights that lead to better decisions and strategic business starting point to refine the model suitable for their moves. businesses. Finally, in the last section we conclude our study According to Dyche (2014), the concept of big data for with our findings and suggest future research directions. many people is just millions of data which can be analyzed through technologies. Big data in true sense is the proper use 2. LITERATURE REVIEW of data through technologies in any particular aspect. Big In this section, we review the extant literature which data evolved in the first decade of the 21st century embraced provides various ways in which firms are using big data for first by the online and startup firms. A new type of data analysis and decision making. After defining the objectives voice, text, log files, images and videos have come into of our research, we identified keywords such as “Big Data’, existence (Davenport and Dyche, 2013). The proper use of ‘Big Data and Decision Making’ and ‘Big Data Analytics’. big data results in several applications of big data helping in We searched through research papers in top journals, decision making. conference papers and web sources and shortlisted relevant Various techniques and tools enhance the decision- papers. Good quality research papers have been selected making ability. Firms such as Amazon, Netflix have through Scopus, Science Direct and Google Scholar developed algorithms to find out correlation between database. The identified keywords have been typed in the customer searches, past purchase history to predict which database and papers relevant to the topic have been selected. products customer is likely to buy. Customers are reminded Figure 1 shows the number of papers per year published in about their past searches or recommended products based on various journals. their purchase history. This creates opportunity of customers buying some of the recommended products thereby boosting Figure 1 Classification of research papers year wise from top journals Jeble et al.: Role of Big Data in Decision Making 38 Operations and Supply Chain Management 11(1) pp. 36 - 44 © 2018 sales. This technique results in as much as one third of their a model to predict an outcome such as sales forecast or level new sales (Artun and Levin, 2015). Telecom companies of success of a new product launch. The model can take scrape through massive volumes of data to predict which inputs of past data and predict dependent variable. These customers are most likely to leave them. This helps in models can easily be created using statistical tools like SPSS designing policies towards customer retention. or SAS. All the past data with independent variables is known as transactions and keeping a track on these 2.2 Five Vs of Big Data transactions is mainly referred as ‘Transactional Processing While the term “big data” is relatively new, the act of System’. The main purpose of Transaction Processing gathering and storing large amounts of information for System is to capture the information and update the data for eventual analysis is ages old. The concept gained momentum the operational decisions in an organization. There are two in the early 2000s when industry analyst Doug Laney ways to process transactions namely Batch processing which articulated the now-mainstream definition of big data as the processes the data as a single unit over a period of time and three Vs – Volume, Velocity and Variety.
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