What's the Big Deal About Big Data?

Loraine Lawson
Slide Show

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:

  • U.S. health care
  • U.S. retailers
  • Europe's public sector
  • Worldwide manufacturing
  • Global personal location data

 


The 156-page report is available for free download and includes a list of ways Big Data can create new opportunities and savings:

 

  • $300 billion more value each year for the U.S. health care system, two-thirds of which would come in reduced expenditures
  • Up to a 50 percent decrease in product development and assembly costs for manufacturing
  • $149 billion worth of operational efficiencies for European governments
  • A potential for retailers to grow operating margin by 60 percent

 

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.



Add Comment      Leave a comment on this blog post
May 17, 2011 8:44 AM Julianna DeLua Julianna DeLua  says:

Big Data is getting bigger by the minute. Just today, I had two conversations with industry pioneers on Big Data in the context of McKinsey report - how you can link the ability to tackle Big Data to Innovation, Competition and Productivity.  In one conversation with a healthcare insurer, we talked about how they can mine medical records to predict diseases and other health outcomes for better quality of care and reduced costs.  The benefits cut across member loyalty, operational efficiency and proactive response -- say if one of your members is complaining about being denied coverage, you can respond quickly instead of losing that member in addition to the family and friends that this person may have influence on. 

Another customer, Global 500 bank, talked about how business executives are now paying more attention to info mgt team now, given that they have a common vocabulary like customer sentiment and psychology of selecting offerings based on life events-kids going to school, marriage, etc.  The bank is looking to improve cross-sell and upsell campaign efficiency, streamline operations based on customer feedback and put sentiment trading to work.  This is just a few of many exciting Big Data projects that organizations are engaged in. To share more about how organizations are becoming data-driven and harnessing the full potential of Big Data,  Informatica is hosting an interactive, online event on June 6 and we love to hear from you.  http://www.informatica.com/more/9-1-launch

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Sep 19, 2011 6:17 AM Barry Barry  says:

Global 500 bank, talked about how business executives are now paying more attention to info mgt team now, given that they have a common vocabulary like customer sentiment and psychology of selecting offerings based on life events-kids going to school, marriage, etc

Reply
Sep 19, 2011 6:18 AM Mark James Mark James  says:

Interesting post, it's funny how much money is spent to save money.

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