Big data has dramatically changed the way people work, think and do business over the past few years. Yet, applying big data to corporation is not an easy thing. It takes time, money and skills. McKinsey & Company conducts a survey and identifies some important facts on how to get better performance on big data application.
In 2014, a poll conducted by McKinsey & Company suggests that companies only see moderate revenue and cost improvements. Among 714 companies around the globe, only the ones invest substantially in data-analytics talent and in big data IT capabilities can produce significant returns. Based on the study, the average of 6 percent of the increase in profits from big date investment initially is seen, and it increase to 9 percent for five years’ span. The investment amounted to 0.6 percent of corporate revenues. It returned 1.4 times of the amount of investment and increase to 2 times over five years.
There are also some strategies on investing Big data identified from the study. First, early investment is a key. The study also showed that early investment in big data analytics can raise the pace of improvement in operating profits. The companies differentiate themselves from competitors with optimized data-analytics technology integrated into the workflow. These first movers companies accounted for roughly 25 percent of the increase in the profits. Secondly, make a combined investment. Companies combining investments in IT and big data would gain advantages from the complementariness and coordination. The performance will be improved substantially as well. About 40 percent of the profit improvement is measured in the study. Thirdly, investing in talents. Data are facts that have no particular context and hence they do not have a clear meaning. Only if we organize and give context to transform the data into information that we can leverage the benefit of big data. With the increasing application of big data, skilled big data analytics will be in a great demand and it is critical to take actions. The study identified that 15 percent of operating profit increases from big data analytics were derived from hiring experts.
Companies strategically invest in big data can truly benefit from it. By accurately targeting customers and optimizing operation and supply chains can generate an operating-profit increase in 6 percent. The three investment patterns above account for about 80 percent of the operating profit increase in the study. Not to mention how companies can benefit from capturing future opportunity by analyzing big data to gain competitive intelligence on the market. Big data is a trend. Only the companies invest timely and smartly can reap the gains.