You may think of “big data” as a passing fad or a trend that doesn’t impact you. But if the perspectives and experiences of 1,469 C-level executives are any indication, big data promises to make a big impact on organizations of all sizes across industries. (Still not clear on just what big data is? Find out why and how data is going extreme.)
In April 2012, McKinsey & Company surveyed 1,469 C-level executives about three trends in digital business, including big data and analytics. Here are key findings from its subsequent report, Minding your digital business (registration required):
Big data and analytics are top priorities
C-level executives are putting big data and analytics front and center. More than half of all respondents say their organizations have made big data and analytics at least a top-ten corporate priority on their strategic agendas (see exhibit 1).
In fact, about half of the respondents indicate their main reason for addressing big data is to build a competitive advantage. And nearly one-third say the plan is to build a new business or tap into new profits by taking advantage of these trends.
The respondents are laying these plans with good reason. When compared to the trends of digital marketing, social-media tools, and delivery platforms such as cloud computing and mobile, more companies are making strides with big data and analytics. More executives say they have outperformed competitors in their use of big data and analytics than in applying any other trend. And 56% of executives within health care and pharma, and 50% within business-to-consumer companies have experienced the same when it comes to big data (see exhibit 6).
If you’re feeling overwhelmed by the thought of collecting and analyzing all the data dispersed throughout your organization, you probably need to dispel a few of the big-data myths.
Improving performance with data insights
Here’s how they plan to accomplish those goals. Though companies are using or think they should use big data and analytics to improve performance in numerous areas, 49% of the respondents said when it comes to big data, their companies are focusing their efforts on:
- Customer insights
- Targeting to improve overall performance
Moreover, 60% feel their companies should focus on using data and analytics to generate these insights (see exhibit 3).
Yet only 20% said their organizations have fully deployed data and analytics to generate insights in one business unit or function, and only 13% use data to generate insights across the company.
Overcome these hurdles to take advantage of big data and analytics
Though plenty of C-level executives grasp the value of big data and analytics, they face a few roadblocks in pursuing their strategic objectives, the following being the top ones:
- Insufficient investments
- Organizational structure not designed to take advantage of priorities
- IT system shortcomings
While only about 33% of respondents feel their companies are spending enough to build out these capabilities, almost half say their companies are underfunding these initiatives. Interestingly, while 36% of CEOs feel investments are about right, only 30% of CFOs and COOs feel the same, and even fewer CMOs and CIOs agree.
In addition to ramping up investments (which could help address IT shortcomings), McKinsey makes clear that organizations need to reconsider their team structures and seek CIOs who actively sponsor digital business activities.
How is your organization taking advantage of big data and analytics? Have you found ways to overcome barriers to success?