1. DATA – IT’S THE REAL DEAL
Whether we like it or not, we live in a world where we are driven by data. Every second some
or other type of data is getting captured. In other words, data now drives us every day and we
need to acknowledge the importance and use it to our advantage. Data are now woven into
every sector and function in the global economy, and, much of modern economic activity
simply could not take place without them. The use of Big Data — large pools of data that can be
brought together and analyzed to discern patterns and make better decisions — will become
the basis of competition and growth for individual firms, enhancing productivity and creating
significant value for the world economy.
Until now, the torrent of data flooding our world has been a phenomenon that probably only
excited a few data geeks. But we are now at an inflection point. According to research from the
McKinsey Global Institute (MGI) and McKinsey & Company’s Business Technology Office, the
sheer volume of data generated, stored, and mined for insights has become economically
relevant to businesses, government, and consumers.
Big Data has the similar power of IT innovation and investment to transform our lives. The same
preconditions that allowed previous waves of IT-enabled innovation to power productivity, i.e.,
technology innovations followed by the adoption of complementary management innovations
are in place for Big Data. Data metrics and advanced analytic capabilities will have ongoing
impact on productivity.
All companies need to take Big Data and its potential to create value seriously if they want to
compete. For example, some retailers embracing big data see the potential to increase their
operating margins by 60 per cent.
BIG DATA: A NEW COMPETITIVE ADVANTAGE
The use of Big Data is becoming a crucial way for leading companies to outperform their peers.
In most industries, established competitors and new entrants alike will leverage data-driven
strategies to innovate, compete, and capture value. In healthcare, data pioneers are analyzing
the health outcomes of pharmaceuticals when they were widely prescribed, and discovering
benefits and risks that were not evident during necessarily more limited clinical trials. Other
early adopters of Big Data are using data from sensors embedded in products from children’s
toys to industrial goods to determine how these products are actually used in the real world.
Big Data will help to create new growth opportunities and entirely new categories of
companies, such as those that aggregate and analyze industry data. Many of these will be
companies that sit in the middle of large information flows where data about products and
services, buyers and suppliers, consumer preferences and intent can be captured and analyzed.
Forward-thinking leaders across sectors should begin aggressively to build their organizations’
Big Data capabilities.

2. FIVE WAYS TO LEVERAGE BIG DATA
1. Big Data can unlock significant value by making information transparent.
2. As organizations create and store more transactional data in digital form.
3. Big Data allows ever-narrower segmentation of customers and therefore much more
precisely tailored products or services.
4. Sophisticated analytics can substantially improve decision-making, minimize risks, and
unearth valuable insights that would otherwise remain hidden.
5. Big Data can be used to develop the next generation of products and services.
VALUE CREATED BY THE USE OF BIG DATA
But it’s not just companies and organizations that stand to gain from the value that Big Data can
create. Consumers can also reap highly significant benefits. For instance, users of services
enabled by personal-location data can capture $600 Billion in consumer surplus.
Take smart routing using real-time traffic information, which is one of the most heavily-used
applications of personal-location data. As the penetration of smart phones increases, and free
navigation applications are included in these devices, the use of smart routing is likely to grow.
By 2020, more than 70 percent of mobile phones are expected to have a GPS capability, up
from 20 percent in 2010. All told, we estimate that the potential global value of smart routing in
the form of time and fuel savings will be about $500 Billion by 2020. This is equivalent to saving
drivers 20 Billion hours on the road, or 10 to 15 hours every year for each traveler, and about
$150 Billion on fuel consumption.
Sensitivities around privacy and data security are just one hurdle that companies and
governments need to overcome if the economic benefits of big data are to be realized. One of
the most pressing challenges is a significant shortage of people with the skills to analyze big
data. By 2018, the United States alone could face a shortage of 140,000 to 190,000 people with
deep analytical training (in statistics or machine learning) and another 1.5 million people with
the managerial and quantitative skills to be able to frame and interpret analyses effectively
enough to base decisions on them.
There are also many technological issues that need to be resolved to make the most of big data.
Legacy systems and incompatible standards and formats often prevent the integration of data
and the application of the more sophisticated analytics that create value. Ultimately, making
use of large digital datasets will require the assembly of a technology stack from storage and
computing through analytical and visualization software applications.
Above all, access to data needs to broaden. Increasingly, companies will need to access data
from third parties, e.g., business partners or customers, and integrate them with their own. A
vital competency for data-driven organizations in the future will be the ability to create
compelling value propositions for others, including consumers, suppliers and potentially even
competitors, to share data. If it looks unlikely that data sharing will occur despite the potential
for societal benefits (a market failure), legislators may then have to step in.
As long as companies and governments understand the power of Big Data to deliver higher
productivity, better value for consumers, and the next wave of growth in the global economy,

3. there should be a strong enough incentive for them to act robustly to overcome the barriers to
its use. By doing so they will unleash avenues to new competitiveness among companies,
higher efficiency in the public sector that will enable better services, even in constrained fiscal
times, and enable firms and even whole economies to be more productive.
Sounds like too much information to handle? Understanding the intricacies of the data is
indeed complex and can be overwhelming. We the team at Intelligent Application specialize in
using data to effectively increase your organization’s productivity. Learn more about us at
http://intelligent-applications.net/ . We have helped several firms tap into this resource and
increase efficiency and productivity. So why not you and why not now?