Big data – the collection of data sets, now so large it makes it difficult to process them using traditional data processing methods – is a term that many marketers have become concerned about lately.
Capturing, storing, sharing, curating and visualising this data becomes nearly impossible using traditional methods such as spreadsheets or analytics solutions.
The exponential increase in data means, big data has become key in competing and growing a business. Due to the enhanced insight and decision making potential it provides, leaders in every business industry have to understand the implications and how to use big data, not only to get ahead of the competition, but to drive business efficiencies and increase profitability.
McKinsey Global Institute has studied big data in five different domains including the European public sector, healthcare and retail in the United States and global based personal location and manufacturing data. Big data has shown to be effective in generating value in all of these domains. Retailers using big data have the ability to increase operating margins by as much as 60% or more. Using big data in the healthcare industry could help to create more than $300 billion every year in value in the United States, according to McKinsey’s Big data: The next frontier for innovation, competition, and productivity report.
There are basically five ways that big data can help businesses create value. It can unlock value by making information more transparent and usable and at a higher frequency and allows businesses to store their data in digital form, which is much more efficient. Big data usage will provide for growth of productivity as well as consumer surplus. While the actual use will vary depending on the specific sector, all sectors can gain some benefit from big data. Some sectors however, are naturally set for a greater gain.
Computer and consumer electronics for instance as well as government and finance and insurance markets are likely to see a much higher gain from using big data than other industries. Still, all industries can benefit provided they learn how to use big data effectively.
Unfortunately there is a shortage of skilled staff that is needed for companies to take full advantage of big data. McKinsey Global estimates that by 2018, markets may face huge shortages of people that have the skills and experience needed to handle big data. In the United States alone it is estimated there is already a shortage of nearly 200 000 skilled professionals able to take on the challenges that big data presents. Those working with big data will need the skills necessary to use the analysis to make decisions that will benefit their respective organisations.
A recent article by ITweb points out that South African corporates lag on big data analytics. This was further backed up by a local study conducted by Strategy Worx, which showed that CIO’s within South African companies are not using big data analytics or systems in any substantive way, a clear opportunity to drive value in the local market.
This will not doubt lead to big shortages in data analytics skills in the local market as South Africa will need to play catch-up with its international counterparts to maintain competitiveness.
There are a number of issues that must be addressed before businesses and marketers can fully capture big data’s full potential. Any policies that are relevant to liability, privacy and security and/or intellectual property will need to be fully addressed before big data can offer its benefit. Companies will need to ensure they have skilled people working for them and that they have the technology needed to fully capture the benefits of big data. Being able to access data is of course, an important factor to consider.
Yoav Tchelet is executive digital director at dotJWT.