The Business Impact of Big Data
Many business executives want more information than ever, even though they're already drowning in it.
Big Data is big news these days. Still, I'm sure there are those among you who wonder whether Big Data is actually a big deal, or just a big bloated bag of hot air.
It's a legitimate question, and you're not alone in asking it. In fact, McKinsey Global Institute (MGI) and McKinsey Business Technology Office recently did an in-depth study on the issue called, "Big Data: The Next Frontier for Innovation, Competition and Productivity." Their conclusion: Yes, it is a big deal. In fact, its potential is huge in every sector they examined.
The study examined five areas:
It not only found the potential for huge benefits from using Big Data - McKinsey actually found early adopters putting it to use in every sector already.
What's more, there is enough Big Data accumulated to put it to use today, the report found:
The growth of big data is a phenomenon that we have observed in every sector. More important, data intensity - i.e., the average amount of data stored per company - across sectors in the global economy is sufficient for companies to use techniques enabled by large datasets to drive value (although some sectors had significantly higher data intensity than others).
They even looked at whether the average schmuck would benefit and discovered $600 billion worth of savings to consumers based on personal location data alone (you know - data about where you are and have been).
For instance, travelers would shave 10-15 hours off drive time, equaling an annual savings of roughly $150 billion in fuel consumption, according to a report summary published on the Financial Times (free registration required). And on behalf of average schmucks everywhere, I'd just like to say bless em for that news. (I won't go into Big Data's privacy cost, and neither does McKinsey. Suffice it to say I think Big Data makes Facebook, Apple and GPS look like mere spy toys and that privacy will be as obsolete as Kodachrome film for everyone but the Amish.)
But as you might expect, there are challenges, particularly in integration. Tomorrow, I'll write more about Big Data, including why it doesn't necessarily mean what you think it means and the integration challenges you'll face.