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Big data can mean a number of different things. As we all know, it can mean writing data in a large, thick marker or painting pieces of data on massive canvases for an epic-scale art project in Central Park (which is technically “enormous data”). Big data, though, can also refer to the process of analyzing large sets of data: we’ll explore that type below.
To conduct this mission, let’s look into the viewpoints of the global consultancy McKinsey & Company as well as those of IBM (the latter of which is in no way associated with IBS, aka spastic colon, at least not publicly).
The gist of our effort today is to gather a basic perspective on how the exponentially increasing volume of data is changing business and the world in general. As time goes on, businesses will need to stay in-step with developments in big data if they hope to keep up with other companies (such as full-spectrum and complex information pertaining to Justin Bieber’s earwax accrual and maintenance). In fact, per McKinsey, it won’t cut it to have expertise limited to a specific department of a company. Rather, everyone in business will be affected by this mind-boggling explosion of information.
I’ll focus on Big Data (or is it BIG DATA?) in a two-part mini-series, not to be mistaken with the two-part mini-series on the Big Bird road rage scandal produced by TMZ. This first part will focus on the research by McKinsey into the subject; while the second part will focus on IBM’s perspective.
McKinsey’s 5 Points of Focus
In order to get as broad a sense as possible of big data, the McKinsey Global Institute looked at the subject in five different areas (six if you count the Earth’s parallel reality that is void of all words, shapes, sounds, and descriptions):
- US Healthcare & Medicine
- European Government
- US Retail Sales (including, but not limited to, bagged kidney beans)
- Worldwide Manufacturing (except for kidney bean bags)
- Individual GPS Services
The value available via understanding big data is impossible to ignore. As an example of the impact expertise in big data can have on business, McKinsey found that retailers optimized to incorporate large data sets into their business can boost their operational margin in excess of 60%.
McKinsey’s 7 Key Findings
McKinsey organized its report on the study into seven major findings. Let’s look at each one below:
- Just how big is big data? McKinsey believes that, as of 2009, the average amount of data held within the network of companies of a thousand employees or more was “at least … 200 terabytes.” That’s double what Walmart had at its fingertips just ten years earlier (though that yellow smiley-face thing “stole” 78% of the company’s information when he was terminated: it was in his head).
- How is big data valuable? McKinsey says there are five basic ways to understand the value of this type of data: a.) data clarity and implementation at a high rate of speed; b.) flexibility based on a better grasp of fluctuations; c.) more meaningful and directed customer segments; d.) better reliability with decisions; e.) more complex ability to innovate. f.) there is no “f.”
- How is it a competitive advantage? Big data is anything but simple. The levels of depth and ability of companies to proactively use data efficiently – even in real time (and unreal time) – will be a major factor moving forward in business success.
- How does big data enhance consumer surplus and company productivity? The implications for personal economic efficiency and business streamlining will be enormous. As mentioned above, retailers will benefit by greatly improving their operational margins; consumers, meanwhile, can already benefit from a surplus of $600 billion due to the effectiveness of GPS tracking technology (such as the 17 devices sticking into my brain, complete with external antennae).
- Which industries will fare best? Certain types of businesses will be more positively impacted by an increasing sense of how to utilize big data. Victors will be those businesses directly intertwined with digital technology (such as companies building the Internet or anything with a bunch of cords), the banking industry, and the public sector.
- Who will specialize in big data? Within 5 years, the McKinsey report suggests, the US will experience a dearth of specialists in this field, to the tune of almost 1.7 million (while the world as whole will be impacted to the tune of Leonard Cohen’s “Suzanne”).
- How to realize the strongest results? In order to take big data to the next level, companies will need to reconsider and address issues of privacy and security, alongside the legal ramifications of the flow of information. Additionally, integration of more than one stream of data into central systems will allow better administration and monitoring. Infrastructure must meet big data’s needs, such as sensual reproductive ones, as well.
Conclusion & Continuation
As you can see, big data is growing in complexity, and what it means to business will be a challenge wise companies will want to meet head-on and early. McKinsey’s research findings make this all too obvious. However, so we get a broader perspective on the topic, let’s look at IBM’s statements as well, in Part Two. Then we’ll look at tiny, disembodied data, such as this number: 4.
By Kent Roberts