The McKinsey report covers general issues of Big Data, and specifically how its adequate applications could generate extra revenue and cost savings at the same time, as well as improve quality and efficiency. The report takes a look at 5 sectors:
- healthcare in the United States,
- the public sector in Europe,
- retail in the United States,
- global manufacturing, and
- personal-location data globally.
The research offers 7 insights:
1. Data is now a major part of production that businesses increasingly depend upon.
2. Big Data can create value in 5 ways:
- by making information transparent and usable at much higher frequency;
- by enabling organizations to collect more accurate and detailed information on everything (from product inventories to sick days etc), thus helping them to boost performance;
- by allowing ever-narrower segmentation of customers and more precisely tailored products or services ;
- by allowing sophisticated analytics to substantially improve decision-making;
- by allowing manufacturers to use data to create innovative after-sales service offerings such as proactive maintenance.
3. Big Data will become a basis for competitiveness and growth of individual firms.
4. Big Data will spur productivity growth and consumer surplus.
5. Analysis suggests that some sectors will get grater gains from Big Data than others. The sectors to gain most from Big Data are computer and electronic products and information sectors, as well as finance and insurance, and government.
6. Organizations will experience a shortage of talent to take advantage of all that Big Data has to offer.
7. Several issues need to be address before Big Data can deliver its full value:
- policies related to privacy, security, intellectual property and liability;
- right talent, technology, structure workflows and incentives need to be put in place first;
- integration of information from multiple sources, often from third parties, will need to be put in place.
Original McKinsey report: Big data: The next frontier for innovation, competition, and productivity