Big Data Is The Next Frontier For Innovation, Competition and Productivity

Author: Steve McDonnell
Spotfire Blogging Team

Author: Steve McDonnell
Spotfire Blogging Team

Last month I blogged about Big Data challenges and opportunities. This month I want to elaborate on Big Data opportunities. According to research by the McKinsey Global Institute, the potential value that can be extracted from big data is enormous:

• A retailer could use big data to increase operating margins by more than 60 percent
• The U.S. healthcare industry could use big data to create more than $300 billion of value every year
• Services enabled by personal location data could result in $600 billion of consumer surplus spending

Much of the opportunity to use big data is for organizations, both in the public and private sector, who find themselves in the middle of a convergence of data about every aspect of their business – information about their products and services, about their buyers and suppliers and about consumer preferences and intent. With the right policies and enablers in place, McKinsey believes that big data will be a primary source of competitive advantage and enhanced productivity for companies. 

The report outlines five broad ways that companies can leverage big data today:

1. Accessibility – by making big data more accessible in a timely manner, companies can reduce their time-to-market by reducing search and processing time of data and better integrating the information in R&D, engineering and manufacturing.
2. Experimentation – tracking, storing and analyzing transactional data can lead to insight that improves operational performance in everything from managing inventory to managing people.
3. Segmentation – creating even finer distinctions among customers can lead to products and services that exactly meet customer needs, something already used today by many companies in the private sector and a significant opportunity for organizations in the public sector.
4. Decision-Making – supporting or replacing human decision making with advanced analytical models can improve decision-making, minimize risk and reveal insight that today remains hidden within large data sets.
5. Innovation – improving products through the use of data about how they are used, creating after-market services based on data analysis and developing new mobile, location-based services are all potential sources of new revenue for companies.

Read the full report at the McKinsey website.