Big Data: The next frontier innovation, competition, and productivity
McKinsey Global Institute (MGI) study which briefly summarizes as:
MGI studied big data in five domains—health care in the United States, the public sector in Europe, retail in the United States, and manufacturing and personal location data globally. Big data can generate value in each. For example, a retailer using big data to the full could increase its operating margin by more than 60 percent. Harnessing big data in the public sector has enormous potential, too. If US health care were to use big data creatively and effectively to drive efficiency and quality, the sector could create more than $300 billion in value every year. Two-thirds of that would be in the form of reducing US health care expenditure by about 8 percent. In the developed economies of Europe, government administrators could save more than €100 billion ($149 billion) in operational efficiency improvements alone by using big data, not including using big data to reduce fraud and errors and boost the collection of tax revenues. And users of services enabled by personal location data could capture $600 billion in consumer surplus. The research offers seven key insights.
The opportunity to increase an operating margin by 60 percent is likely to get any CE0’s attention.
However, I would advise that you read the full report and pay close attention to the seventh insight that concludes this summary and the report:
Several issues will have to be addressed to capture the full potential of big data. Policies related to privacy, security, intellectual property, and even liability will need to be addressed in a big data world. Organizations need not only to put the right talent and technology in place but also structure workflows and incentives to optimize the use of big data. Access to data is critical—companies will increasingly need to integrate information from multiple data sources, often from third parties, and the incentives have to be in place to enable this.
Guess what one word is never used in the full report (156 pages)? Starts with an “s.”
Give up? Semantics.
Privacy, IP, security, etc., are more popular topics but if you were to open up to public access all 6,000 plus HR systems at the Pentagon, evil doers would have as much trouble as the GAO in auditing it. Why? A lack of documented semantics. Eventually they too would throw up their hands and move onto more useful (from their perspective) activities.
The potential for value and all the popular problems are present in Big Data, but semantics come first. Otherwise it’s just a Big Mess.