Getting big impact from big data

24. January 2015

Date: 23-01-2015
Source: http://www.mckinsey.com/

New technology tools are making adoption by the front line much easier, and that’s accelerating the organizational adaptation needed to produce results.

The world has become excited about big data and advanced analytics not just because the data are big but also because the potential for impact is big. Our colleagues at the McKinsey Global Institute (MGI) caught many people’s attention several years ago when they estimated that retailers exploiting data analytics at scale across their organizations could increase their operating margins by more than 60 percent and that the US healthcare sector could reduce costs by 8 percent through data-analytics efficiency and quality improvements.1

Unfortunately, achieving the level of impact MGI foresaw has proved difficult. True, there are successful examples of companies such as Amazon and Google, where data analytics is a foundation of the enterprise.2 But for most legacy companies, data-analytics success has been limited to a few tests or to narrow slices of the business. Very few have achieved what we would call “big impact through big data,” or impact at scale. For example, we recently assembled a group of analytics leaders from major companies that are quite committed to realizing the potential of big data and advanced analytics. When we asked them what degree of revenue or cost improvement they had achieved through the use of these techniques, three-quarters said it was less than 1 percent. Read the rest of this entry »