The 2011 Mckinsey Big Data report (see the Mckinsey.com website for a free copy) covers a broad range of issues with Big Data. Given their expertise on all thing technical, their over 300 page report provides some significant gravitas on the topic. Of course they will be fishing for consulting assignments as a result, but they touch the nerve of a real issue. How can organizations stay on the leading edge?
The Mckinsey answer is to provide technology to look at all aspects of your business and systematize your approach. The data that might be accumulating without being analyzed may hold the key for getting closer to your customer by understanding their behavior better, or perhaps understanding your suppliers better, or providing a mechanism to be more methodical creating more predicable results and less variability in your operations.
The report doesn’t spend any significant time on the mechanics of Big Data technology like Dyanamo from Amazon or the open software Hadoop to analyze massive amounts of data. The paper is aimed at identifying the pain of not properly using Big Data, and building a business case why a significant amount of money should be spent to master your data. In all fairness, they do provide some additional granularity, with some industries being more appropriate than others. They do spend time discussing four examples: health care, government services, manufacturing and telecom/mobile.
Major ways that Big Data can add value include mechanisms for both companies and consumers to become better informed and create transparency for pricing and trends. It can provide the platform to create new business models that are disruptive for existing approaches. It might also take more human decision making out of the process, and replace it with algorithms. The intent is not to dehumanize the world, but to get over the reinvention of the wheel for the 6 billionth time.
The report also looks at the problems with Big Data implementations. There are legal and structural reasons why the Big Data approach may hit roadblocks. Data security, talent shortages and technology infrastructure are three areas that will slow or stop Big Data.
The report ends with a smidgen of their consulting approach, starting with a methodology outline of how to create a value potential index for your company, and some of the suitability metrics that they would employ to see if Big Data is appropriate.
The potential benefits for this approach are significant, if you are in an appropriate industry, have some budget available, and the stomach for some real disruptive changes. But this is what separates the leaders from the pack.