We wanted to share a detailed summary of the report on Big Data by McKinsey Global Institute (MGI) that was released last month, as it contains relevant points and interesting statistics.
The report describes the state and growing role of digital data that has now entered every sector and economy, as well as the impact of the growing amount of data. MGI claims that there is strong evidence that Big Data can contribute significantly to national economies, creating substantial value for the overall world economy. Their research suggests that the public sector can increase its productivity through effective use of Big Data. For instance, the value to the US healthcare system could be $300 billion a year, and US retailers could boost their operating profit margins by 60 percent. However, MGI notes the challenges organizations face with reaching the full potential of Big Data, such as limited analytical and managerial talent to make big data advantageous and valuable for businesses.
Some relevant key findings from the research include:
1. MGI estimates the new data stored by enterprises exceeded 7 exabytes of data globally in 2010. In addition, the new data stored by customers around the world exceeded 6 exabytes in the same year.
2. Organizations are using Big Data analytics more to make decisions by analyzing datasets, including from mobile and social networks, on customers, employees and sensors embedded in products. This is leading to innovation of new business models, products and services. For example, there will be a better match between products and customers.
3. The use of Big Data will encourage new growth opportunities and competition among businesses.
4. Some sectors are positioned for greater gains from the use of Big Data. Those sectors include computer and electronic products, financial and insurance, and government. Public sectors, such as the education vertical, have experienced negative productivity growth due to high systemic barriers.
5. Concerns over the use of Big Data include data policies, privacy issues, developing new techniques and technologies, organizational change and talent, access to and integration of information from various data sources, and industry structure.
6. Under techniques for analyzing Big Data, MGI listed various methods from statistics and machine learning for data mining, including association rule learning, cluster analysis and classification. Data fusion and data integration are also significant techniques that allow analysis of data from multiple databases to extract valuable insight.
7. Visualization supports Big Data and is becoming more important to portray information in a consumable way for people to understand.
Please see below for a direct link to the full report. The report includes an overview of Big Data techniques and technologies, the potential of Big Data and key findings in five types of verticals (health care, public sector administration, retail, manufacturing and personal location data), and the implications for organization leaders and policy makers.
McKinsey Global Institute, May 2011
Big data: The next frontier for innovation, competition, and productivity