When big data was hyped as the next technology set to transform the Business world many organizations began to collect as much of it as they could lay their hands on. Data centers proliferated as companies sucked in data points from customer interactions, supply chain partners, mobile devices and many, many other sources.
It looked as though enterprises had jumped on board with the idea of big data, but what they were actually doing was hoarding information. Very few had any idea about how to unlock the insights contained within. Businesses that saw the value and pioneered analytics are beginning to see a major return on their investment.
In a global, cross-industry McKinsey survey of 530 C-level execs and senior managers, almost half said that data and analytics have significantly or fundamentally changed Business practices in their sales and marketing functions, and more than a third said the same about R&D. Big data can have a major beneficial impact, but realizing those potential benefits requires a winning strategy.
As the cost of data storage has declined and trends like the rise of the IoT have begun to generate even more useful data, the amount of information being collected and stored has soared. We can track things on a granular level today that would have been impossible in the past.
In retail, to give just one example, we can plot a customer’s course around a store or track their attention on a webpage. The gold mine that many organizations have been sitting on has grown enormously, but the value is buried in nuggets of insight that need to be extracted.
The cost of conducting analysis has dropped sharply with the advent of affordable analytics, artificial intelligence (AI) and machine learning. What used to be an intimidating capital and time investment fraught with risk is fast becoming an accessible strategy that’s now affordable, convenient and more flexible than ever. The companies that have successfully mined their data for insights have gained a demonstrable competitive advantage.
Organizations that have struggled with the logistics of data collation and analysis are measuring the cost and downsizing data centers. Because they’ve failed to benefit from big data so far, they are grossly undervaluing their data. This short-sighted thinking will be exposed in the mid to long term as their competitors make better decisions about where to move next.
Others have recognized the cost benefits of leveraging powerful analytics tools in the cloud, where the costs of storage and Big Data tools as a subscription merit the investment and provide a more palatable ROI for those who are serious about mining value from their business data.
The evidence that data-driven companies outperform the competition has been quietly amassing. A Bain report from 2013 found that while just 4 percent of companies were good at analytics back then, they were already twice as likely to be in the top quartile of financial performance in their industry, three time more likely to execute decisions as intended, and five times more likely to make decisions faster.
