MIT professor Andrew McAfee once said, "the world is one big data problem."
In studying his work, what's clear is this: data itself isn't a problem, it's our ability to use, analyze, and act upon it. Real-time data is information that's captured as it flows.
Real-time data is available immediately for analysis. The power to instantly receive and analyze this data helps you to adjust quickly.
You might be amazed by how many businesses leverage data in real time. Best of all, you can use real-time data too! Real time data streaming, combined with visualizations, help you to make informed decisions. Even better, you can quickly act upon information.
In this tutorial, I'm going to share examples that'll spark your thinking about how to use data in real time. You'll learn how industries use real time data, plus get ideas for how you can apply it.
What Is Real Time Data (And When Should You Use It?)
Think of real-time data as a constantly flowing faucet of information. As long as the faucet is on, you get new data to work with. As the analyst, you follow these incoming datapoints to seek understanding. Then, you can make needed adjustments.
In contrast, data has historically been reported in batches. That means that there were set intervals to capture and measure data points. This created more lag between when things happened and when you could act upon them.
Think of the electric meter on your home. A reading was "batch" reported by an employee of your local utility company once per month. Now, these meters typically feature internet-connectivity. That transforms your meter into a real-time data source for streaming and analysis.
Several key forces make real-time data more popular than ever:
- Cheaper sensors. The concept of "Internet of things" advocates for connecting everything to a network. The rise of this idea led to lower cost sensors. Many devices now act as real-time data sources.
- An increased focus on data-driven teams. Forbes reports that 86% of companies have a team dedicated to data. It illustrates that companies care more about using data than ever before. This data-driven culture creates a thirst for more real-time data streaming.
- Falling storage costs. Cloud storage gives companies immense scale at a lower cost. Plus, on premise storage continues to decline as per-gigabyte costs decrease. Backblaze data shows storage is a third of the cost per gigabyte versus ten years ago. This means you can store more data points.
All these factors mean that the use of real-time data will only become more popular. Here are two examples of real time data streaming and how businesses use it.
1. Manufacturing Data
Believe it or not, factories are some of the most technology-friendly facilities.
Regardless of what's made, data drives modern manufacturing plants to success. Most products need precise setups. Whether it's temperature, or time spent at specific parts of the line, details matter. That means that you need as much information as possible to understand the operation.
Machinery and equipment have many sensors attached. Then, real-time data is fed to a data capture system. In turn, real time data visualization tools make the information easier to review. Skilled operators review the incoming data and make any needed adjustments.
Real-time gives operators the opportunity to adjust. That leads to better yields, higher quality, and improved performance.
Data real time is also a need for manufacturers understand profitability. A study by CEBR found that 80% of companies using real-time data analytics improved revenue. It's clear that companies that embrace the analysis of real-time data are more connected to customers. Plus, you can understand individual cost drivers to understand optimization opportunities.
2. Stock Market Data
A classic example of real-time data is stock market data. Constant buying and selling moves the share price in real time.
Many traders monitor real-time data using tools like Bloomberg terminals. Active traders see data real time streaming as a must so that they can act upon the most current price points.
The Michael Lewis book Flash Boys chronicles the need for data real time capabilities. In the opening chapter, he tells the tale of a build of an entirely new, 827 mile fiber optic line. This new line reduced the lag of new data from to 17 to 13 milliseconds. For high frequency traders, this made all the difference.
The constant movements won't matter to long term investors. But active traders need real time data. It's the difference between those extra percent gains on key trades.
Real-Time Data: Practical Use Cases
We've reviewed several scenarios and use cases for real-time data. You might be wondering: "what is real time data's usefulness for my business?" Moreover, you might be wondering how to bring it to life within your business.
At a high level, you need the following to use real-time data in your business:
- A method and tools to capture data as it's created.
- A tool to gather, consolidate, and database your information.
- A tool to review, visualize, and share the data you capture from your database. Real time data visualization tools like PowerBI are powerful options.
Here are three tangible steps you can take to determine how you might use real-time data in your business:
1. Assess Your Business Needs
Don't let data be "the tail that wags the dog."
In short, that means that you shouldn't create data for data's sake. The purpose is to use data to help us understand the business. Too many organizations create countless metrics that draw focus to the wrong topic.
Start by asking yourself what it is that you want to know about your business. And more importantly, ask what you would change if you know that data more often. If you find it compelling, it's time to think about capturing real-time data.
2. Explore the Data You've Got (And the Data You Need)
You've listed your data needs. Now, you can assess if it's possible to use real time data streaming. There's no one size fits all solution. The data a restaurant tracks is radically different than a retail establishment.
At this stage, it helps to look to industry peers to see what they track and analyze. Plus, assess what tools are common in your industry. You're looking for the hardware and software combination that captures data. Then connect it and stores it in a database that's ripe for analysis.
As an example, check out this Instructables guide. It uses inexpensive sensors to capture motion, then adds the data to a SQL database. The motion data helps count visitors. Then, you can analyze causes and effects to determine the trends in your business.
3. Capture, Share, and Analyze
Real-time data is just the start. Sure, you can capture every individual signal from equipment or your payment data. To find meaning, you've got to review and understand the data.
That's why dashboards are so popular. Real time data visualization gives you indicators to understand your performance. After you set up your data pipeline, connect it to a dashboard tool to monitor.
A common tool for data dashboards is Microsoft PowerBI. It's popular because you can connect it to a litany of data sources. If you store your data on a SQL server, you can share that data in a PowerBI dashboard. Typically, you don't have to know any code to create a dashboard. It's as easy as drag-and-drop.
These visualizations give your team a way to understand the data. Better yet, most graphics feature drilldown capability. That means that you can click to explore the data at a more detailed level.
Real time data visualization helps users outgrow spreadsheets. They make your real time data streaming efforts more actionable.
Learn more about PowerBI real time data streaming on Microsoft's documentation page.
When You Shouldn't Use Real Time Data
So far, I've shared the many benefits of looking at data in real time. But there are situations where real time data can confuse the situation. Or the cost of obtaining and managing real-time data outweighs the benefit derived.
Ready to start your data journey? Before you start using real-time data, consider these scenarios.
Data in Real Time Is Cost Prohibitive
Data is powerful. But with that power comes a cost. You've got to think about capturing, storing, and retaining your data. And because real-time data is a constant faucet of new datapoints, so too are the costs incurred.
Real time data streaming costs can add up over time. You might need to consider cloud providers or build your own storage.
It's important to consider the cost of compliance. For example, sensitive personal data carries with it a significant risk. Data is increasingly regulated. That means that you could be subjected to penalties or fines if you don't comply. Real time data streaming multiplies the impact and cost of data breaches.
Real-time data dramatically increases the consideration you'll need to give to your security.
When Real Time Data Is More Noise Than Signal
Just because you've got data doesn't mean that you should use it.
Not all data is meaningful. If my business is only open during the day, checking my dashboard for real time data at night is a fool's errand. These real time data visualizations could lead you astray.
It might seem like a silly example, but it's something I've seen in my career. You create a dashboard with real-time metrics, but people focus only on recent data points. An overemphasis on specific points means losing sight of the big picture. You miss the forest for the trees.
Here's another classic example: many businesses do invoicing at month-end. While I might be able to see my billing data at any time, doing so isn't predictive. That means that a single data point won't guide you toward a full month projection. Don't share your revenue dashboard with your sales leader without explaining these shortcomings.
In every organization, it helps to train the users of your data. In a dashboard, consider adding tooltips or written notes to help explain the data. If you use real-time data, explain the cadence and frequency of the data.
You can capture data in real-time. But if your data points show up in "lumpy" increments, then this approach might not be right for you. Consider not just your ability to capture the data, but how often you get meaningful signals. Then, determine if real-time data creates understanding, or simply adds to uncertainty.
More Data Driven Resources
Can't get enough of data real time information? We've got you covered with more tutorials to help you think about data.
Check out our leading resources below. They'll help you learn more about how you share and use data. These tips help you understand and grow your business.
- 12+ Best Data Visualization Software Tools (Free + Paid) for 2022Daniel Strongin29 Mar 2022
- How Small Businesses Can Use Big DataAndrew Blackman04 May 2022
- How to Present Data & Numbers in Presentations (Like a Pro)Andrew Childress18 Jun 2022
What Is Real Time Data? Now You Know
This tutorial explored the power of using data in real time. You know now "what is real time data?" and sparked ideas for how you could use it. Real time data streaming in a visualization can change the way you operate. Think of data real time streaming as your key to react quickly.
It's your turn to think about real time data, and how it could change your business. Ask yourself: what question do I want to know most often about my business? Then, explore if you can capture the real time data that helps you answer those questions.