Big Data Analytics On Decision Making by Smart Firms in Kenya
Big Data Analytics On Decision Making by Smart Firms in Kenya
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Jackson Machii
The Technical University of Kenya
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Miriam Kaara2
Tutorial Fellow, School of Information Communication Technology, Zetech University
Email: [email protected]
ABSTRACT
Big data designates huge data-sets which demand unique advanced tools and techniques to
collect, analyze, control and envision. Today, big data has captured an extensive interest from
researchers and smart firms. This paper embarked on using desk-research to address the
following objectives: to analyze the technological concepts of big data analytics; to establish
application and uses of big data and its effects on business decisions; to examine the challenges
of big data in decision making by smart firms. The study involved reviewing literature resources
comprising of scientific research reports, journals, theses, and conference papers. The study
concluded that Information Systems techniques, tools, and new intelligent technologies are
paramount in organizations’ strategic decision and planning for a life-long business success and
to meet Kenya's vision 2030 economic projections. The concepts of Business Intelligence (BI)
and the Internet of Things (IoT) development have supported the application of big data by smart
firms enabling efficient quality service delivery such as smart energy, smart healthcare, smart
grids, smart water, smart transportation, smart retail and smart homes.
Keywords: Big Data, Analytics, Business Intelligence, Internet of Things, Information Systems
INTRODUCTION
Big data evolution and the Internet of Things (IoT) have taken precedence in many organizations
with the intent of spearheading decision making and enhancing productivity. A study conducted
in the US shows that big data and analytics impact above 10% of the growth in 56% of the firms
(Hashem &Anuar, 2016). Hashem and Anuar reported that 91% of affluence 1000 companies
invest in big data analytics projects of which 85 % have achieved massive success. Power,
(2014) asserts that big data has taken an extensive interest from researchers and firms have built
a great expectation. Machii and Kyalo (2016) stated that the key pillars of Kenya Vision 2030
Today, organizations are interacting with massive data in an effort to extract relevant and
valuable information to be used in various management levels including operational, tactical and
strategic in making smart decisions. Usually, managers do rely on numbers, tables, charts and
statistics extracted from information systems such Expert Information System (EIS),
Management Information System (MIS) and Decision Support System (DSS) in making
management and business decisions. Numerous firms have seized this opportunity to offer
software solutions by selling information System modules to companies, with intent to improve
and increase companies’ productivity. However, managers swiftly become disillusioned, in the
big data ambiguity concept. Power (2014) states that ‘Data, either big or small, has no meaning
in itself. Its data usefulness is unlocked through context and presentation’. Therefore, managers
are required to clearly know the handling of voluminous data sources. Moreover, a few managers
often do blindly expect magic from a highly-salaried data scientists employed in their
organizations. Managers probe more on what a data scientist intends to do, how and why they are
suitable for that role. They seem hesitant to invest in costly software and hardware to analyze
data useful to the company.
Information systems such as MIS, DSS, and EIS, have facilities and tools which allow managers
to access useful information for making informed executive decisions so as to put the company
at a competitive edge. The systems have been developed to store, fetch and extract key
information to support strategic decisions processes, procedures, policies including various
activities involved. The data sources utilized by these systems include; transactional databases,
ubiquitous Online Transaction Processing (OLTP), external news and market trends. This
extraction of facts within large data sets requires Business Intelligence (BI) which allows
information become available for top management to make a decision and strategic planning.
The activities involved in a business intelligence system include data integration, data cleaning,
and preparation (Silahtaroğlu & Alayoglu, 2016). Firms are required not only to share data in
real-time between diverse investors but must modify their responses based on precise,
personalized, and uniqueness of knowledge in order to convert customer’s data and information
into valuable insights.
Firms progressively use Big Data Analytics(BDA) for example in search analytics, web
analytics, customer analytics, search engine optimization, customer analytics, as well as pay per
use management in order to customize knowledge of a customer’s like lists of sites, product,
suppliers, competitors, blogs, retailers, user details and data analytic from or about those sites
(Xu, Frankwick, & Ramirez, 2015). According to Dinh, Phan, & Bui, (2016) recent studies, have
dealt with management of knowledge aspects such as business analytics, business intelligence,
knowledge discovery and data mining. This means they have focused strongly on the exploration
of knowledge, but exclusively not absolutely supported knowledge exploitation. Often than not,
there has been slight effort to assess the influence of big data on the entire organizational
process, knowledge management as well as service orientation trends. Therefore, this study
embarked on an empirical analysis on the use and impact of big data, analytics and business
intelligence in decision making.
Objectives
The specific objectives of the study include:
i. To analyze the technological concepts of big data analytics;
ii. To establish the uses and application of big data and its effects on business decisions;
iii. To examine the challenges of big data in decision-making experience by the smart firms.
LITERATURE REVIEW
Big Data
The BDA possess competency for firms to appreciate insights from large data in different
sources and IoT enables the integration of sensors, Bluetooth and identification of radio
frequencies within a real-world environment enabled by well-networked services (Hashem
&Anuar2016). On daily basis, there are a number of profit-making applications creating big data
(Venkatram, et al. 2017) within smart firms; for example Enterprise Resource Planning (ERP-
payments and purchases), Customers Relationship Management System, (CRM-offers and
segmentation etc.) and web technologies (i.e. weblogs). Big data principally entails large data
sets i.e. Terabytes headed for Exabyte’s (Figure 1 below) involving unstructured complex
heterogeneous sources such as smartphone applications, sensor, political science, social media
www.researchacies.org| Vol. 1 Issue 1 June |2018|
Big Data Analytics in Decision Making by Smart Firms in Kenya 4
along with Internet-based tools which demand unique advanced technologies to collect, store,
analyze, control and envision or visualize, its growth was estimated to be 25 billion by 2015
(Acharjya & P, 2016). For instance, Facebook holds data of more than 500 terabytes each day
comprising of updated status, likes, posts and photos (Xu, Frankwick, & Ramirez, 2015).
According to Katal, Wazid, & Goudar (2013) organizations experience rapid data from
heterogeneous sources and varied formats growing at a huge speed. As a consequence, they
experience a challenge in handling such enormous volumes of data.
Bigdata is mainly characterized by 5 V’sproperties: variety, volume, velocity, veracity, and value
(Akter &Wamba 2016; Katal, Wazid, & Goudar, 2013). Power (2014) notes that‘variety as
digital format of numerous formats takes account of photos, email and text documents’;(2)
Volume where IoT brings about Big Data, for instance, researchers are initiating contemporary
knowledge domain sites as collaborative forums, blogging and streaming of videos on top of e-
commerce platforms or e-government sites of which acts as digital setting designed for business
operations online (Katal, Wazid, &Goudar, 2013).(3)Velocity represents the speed at which data
is collected, processed and analyzed at real time (Akter & Wamba 2016). (4)Veracity refers to
the reliability, truthfulness, and accuracy of the mined data (Akter &Wamba 2016). (5) Value is
the informational benefits (Akter & Wamba 2016) achieved after data mining.
METHODOLOGY
The study is centered on desk research. Various sources of literature were critically analyzed.
comprising of secondary sources of information such as case studies, scientific research journals,
reports, theses, and conference proceedings reports from management information system,
management and computer science field of study.
Today’s technology advancements allow smart firms to acquire the thorough potential of data
mining and analytics of big data. For instance, big grid environments; cheap, plentiful storage;
quick processors; reasonable open source; distributed platforms; parallel processing;
virtualization and high throughputs cloud computing (Bolohan & Ciobanu, 2013). Smart firms
have to automate their decision-making process by optimization techniques that build up data
reliance to facilitate tactical and routine staff planning, inventory control other than back-office
operations (Liebowitz, 2013). Nair & Shetty (2014), term data analytics to be challenging with
respect to data compilation and storage.
The types of analytics designed for countless data sources among data manipulation technologies
include:(i) Retrospective data analytics – encompasses historical data along with quantitative
tools for patterns and outcomes identification to formulate future inferences. It involves business
intelligence; (ii)Predictive data analytics – the custom for simulation and modeling to fashion
scenarios grounded on past historical data; (iii) Prescriptive data analytics – insinuates planned,
quantitative analyses involving real-time data triggered events (Power, 2014).
The SAS High-Performance Analytics involves not only querying, descriptive statistics,
summarizations reports but also solves complex business problems scenarios using high-end
analytical techniques at high speed. It makes organizations enjoy and confidently grab
opportunities for good decision making permitting high competitive edge and valuable insights
from big data (Bolohan & Ciobanu, 2013). High-Performance Analytics have aided analysts to
predict markets through running of algorithms and routines to process the firm’s huge data
extracted askey insights (Liebowitz, 2013).HPA uses three modern distributed processing power
to handle these data volumes. They include grid computing, in- memory, and in- database
(Figure 2 below). They allow firms to enjoy a competitive edge by utilizing HPA advancements
whereas providing scalability, flexibility, IT- resource utilization and extraordinary returns.
stated that SAS grid computing involves a fundamental grid infrastructure that ensures automatic
control to realize workload offset, parallel execution, and high resources computing within a
shared environment.
The users throughout the organization level should understand, appreciate, embrace and trust it
in their every day in making decisions. The Managers should strike balance in the processes,
people, and technology for the firm to develop trust, reliability and achieve their strategic goals,
mission, and objective. Some of the new emerging technologies that facilitate interactive
analysis, batch processing (Apache Hadoop) and stream processing (Strom, Splunk etc.) and
comprise of MapReduce, Apache Spark and Storm (Acharjya & P, 2016). As a consequence,
various firms have to adopt new technologies (Sathya, et al. 2015) of collecting, processing,
analyzing and visualizing big data including Hadoopbesidesrelated tools such as YARN, Hive,
Spark, Pigas, Map Reduce, and NoSQL databases.
These are analytical software grounded on programming model used to solve problem cases
(Assuncao et al. 2014) and consist of MapReduce, Apache Hive, Hadoop kernel and Hadoop
Distributed File System (HDFS). Hadoop is an open source implementation of MapReduce
application. Liebowitz (2013) pointed out that the master node segments and distributes data
input into manageable sizes and the worker node converges subproblems results. The ‘divide and
conquer technique (i.e.Map Step, Reduce Step) can be used in Map reduce to process the
voluminous data set. Hadoop and MapReduce data processing are intensive and storage is fault
tolerant. For instance, Amazon EMR allows clientele to instantiate Hadoop cluster using
Amazon Elastic Compute Cloud and Amazon Web Services for scalable computing and
transferring of the huge data (Assuncao et al. 2014). Hadoop implements HDFSto reproduce and
segment data sets in multiple nodes.MapReduce is presented via Google to create a hardware
abstraction and enhance concurrent execution of programs based on various clusters (Nair &
Shetty, 2014). Apache Mahoutdeliversan application intelligent learning techniques for large-
scale and intelligent data analysis applications(Liebowitz, 2013). Core algorithms of mahout
including clustering, classification, pattern mining, regression, dimensionality reduction,
evolutionary algorithms and batch based collaborative filtering run on top of Hadoop platform
through a map-reduce framework.
Text Mining
The text mining is the most used for analyzing web content which consists of unstructured
content. The unstructured data that organizations collect from heterogeneous sources (i.e. social
media, emails etc.) requires text analytics to process into insight value (Olszak & Zurada, 2015).
The data warehouses are a subject-oriented, nonvolatile and integrated collection of numerous
data for cleaning, integration, aggregation, and queries. It consists of operational databases or
historical data mine for corporate decision makers(Ranjan,2009). The Data warehouses allow
consolidation of varied data sources and formats by process of extract, transform and load (ETL)
in order to normalize information throughout systems to optimized querying(Marín-Ortega, et al.
2014). A Data Mart focuses on departmental data thus reducing database complexity (Heang &
Mohan, 2016).
Dashboards
Dashboards are used by smart firms as visualization tools to facilitate a better presentation of
business value and historical trends in terms of charts, graphs, and tables in a friendly interface at
real-time(Silahtaroğlu & Alayoglu, 2016; Olszak & Zurada, 2015).
Web Mining
This involves analyzing web content using methods and tools grounded on Internet protocols as
well as Application Programming Interfaces. It facilitates data integration of different sources
and formats through web-enabled systems (Olszak & Zurada, 2015).
Figure 5: Summary Architecture for Big Data Analytics (Source: Chan, 2013)
According to Ram et al. (2016), BDA helps smart firms to significantly enjoy big data to better
customer satisfaction, manage risk, create a competitive edge, enabling real-time insights for
business optimization and decisions making. According to Ranjan (2009), a retailer who
correctly utilizes big data intelligence could fully enjoy the full capabilities of upscale of about
60% working margins through acquiring of market shares compared to its competitors.
Generally, the five major benefits of BDA include:
Ranjan, (2009) further notes that business value realized from BI on decision making to a
company include: (1)identification of customer profitability, loyalty and future customers; (2)
products and service segmentation in relation to customer’s needs; (3)Reduction of downtime of
equipment via predictive maintenance; (4) Fraudulence detection; (5) Profitable rates selection
for insurance premiums; (6)Improved e-commerce or business strategies; (7) Stock control; (8)
Detection of warranty-reported problems reducing product design deficiencies.
Smart firms can use BDA to clearly comprehend insightful and valuable information flow by
probing the huge data volumes in real- time. Organizations can use BDA to clearly comprehend
their customers better to realize optimal engagement of customers. Regardless of its use; the big
data at itself is not a solution but acts as a raw material. The challenge being faced is to convert
and obtain insights and knowledge from data for use in solving problems and better the
performance of a firm. BDA can enable managers to make enriched business decisions (Xu,
Frankwick, & Ramirez, 2015). Dinh, et al (2016), argue that characteristics of big data and the
knowledge management systems seem to drive big data to influence competitive advantage. The
intelligence approach to BDA aids data-driven organizations to create a novel-generation of
Knowledge Management Systems on the service-oriented basis to enhance the development and
knowledge unification. By harnessing service-oriented approach, firms can manage, control and
run business with techno-innovation revolution thus enabling a competitive edge from those they
are competing with. The payback will be a unified integration, cloud solutions, all-inclusive
commercial acumen for better organizational responsiveness.
Big Data analytics provide a variety of prospect and opportunities (Ram et al. 2016), for
facilitating productivity, quality and critical thinking in problem-solving and decision making.
The key applications posed by Big Data analytics involved utilization of business intelligence
and other technologies to advance efficient decision making, customer needs customizations,
creating strategies and plans for segmentation of new markets exploration, services, and
products, better turnovers of inventory, reduction in complaints made by customer, improving
staff development, productivity as well as efficiency. Hashem & Anuar (2016) argued that usage
of big data technologies facilitates data processing and storage to realize meaningful information
for quality services. Likewise, big data enables managers to make decision strategy for any
services and resources growth. For smart firms to achieve their objectives they must be aligned
with right tools and techniques for better and efficient data analytics. The tools facilitate
collaborative communication to enable quality service, customers’ experiences as well as the
realization of business potentials. Organizations with common interests can easily be known
using data analysis to enhanced collaboration and development between them. Moreover, data
analytics allows governments to implement suitable policies in such areas as people's social care,
health, governance, education, etc. In addition, smart firms have contributed a big role by
transforming various aspects of human life in all sectors such as business ventures, education,
transportation, health, energy, and so on.
Nuaimi, et al. (2015) argues that privacy and security issues need to be carefully addressed. The
massive big data analysis allows meaningful patterns to be correlated and analyzed. The resulting
information mandate organizations to enhance protection and confidentiality of users' crucial and
sensitive information. This can be achieved through authorization, authentication and encryption
techniques or measures (Acharjya & P, 2016). The ability of smart firms to collect, process and
store individual or group big data brings about privacy concerns (Chan, 2013). The storage of
this massive data is expensive and a shortage of storage space is the main challenge (Acharjya&
P, 2016). The adoption of novel technology including integrating new systems features for
CONCLUSION& RECOMMENDATIONS
BDA has been recognized as a new techno-innovation that influences business operation. The
study has looked at the technological aspect of big data analytics, business intelligence, data
mining, IoT, SAS high-performance analytics (HPA) and cloud computing in smart firms. The
study focused on the various characteristics of big data and established the various roles and
effects of big data on business decisions. It also explored its challenges in decision making as
experienced by smart firms. It was noted that business intelligence plays a significant role in
streamlining a firm’s which includes increasing productivity and creating quality products;
market segmentation; determining current customer profile; predicting future customer profile;
establishing product pricing strategies; planning human capital; formulating strategic plans and
customer loyalty prediction.
The study recommends that the firm’s need to invest more in big data analytics and technologies
in order to make trendy decisions and strategies for quality services and resources growth. For
firms to achieve smartness level as well as improve service delivery, there must be the
deployment of right tools and techniques for BDA. However, big data should not be regarded as
an ultimate solution in itself but barely as a raw material. Managers ought to convert data into
insights and knowledge for use in decision making for better performance. They should strike a
balance between three key measures i.e. processes, people, and technology for their firms to
develop trustworthiness, reliability and achieve their strategic goals. This addresses the challenge
of knowledge discovery and visualization of big data analytics which includes a disconnect
between database systems and analytics tools.
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