McKinsey & Company recently released a report titled “The Age of Analytics: Competing In A Data-Driven World.”
The opening paragraphs neatly sum up their findings:
"Big data’s potential just keeps growing. Taking full advantage means companies must incorporate analytics into their strategic vision and use it to make better, faster decisions."“The question for companies now is how to integrate new capabilities into their operations and strategies — and position themselves in a world where analytics can upend entire industries."
For a lot of companies, that's enough information to take action.
But for those that need more, the report does a good job spelling out a few key specifics, which we've summarized here:
- Why do Big Data, analytics and benchmarking improve performance? — because they fuel discovery and innovation. Businesses “no longer have to go on gut instinct; they can use data and analytics to make faster decisions and more accurate forecasts supported by a mountain of evidence."
- When should companies incorporate Big Data, analytics and benchmarking? — the good news is it’s not too late to add Big Data, analytics and benchmarking: "The urgency for incumbents is growing, since leaders are staking out large advantages, and hesitating increases the risk of being disrupted.” The bad news is the longer you wait to the more likely you are to either be left behind or blindsided. "Leading companies are using their capabilities not only to improve their core operations but also to launch entirely new business models. The network effects of digital platforms are creating a winner-take-most situation in some markets. The leading firms have remarkably deep analytical talent taking on various problems — and they are actively looking for ways to enter other industries. These companies can take advantage of their scale and data insights to add new business lines, and those expansions are increasingly blurring traditional sector boundaries."
- How should companies incorporate integrate Big Data, analytics and benchmarking? — the short answer is intentionally, because to "realize the full potential of data and analytics," these capabilities have to be integrated with existing business structures and personnel: "The first challenge is incorporating data and analytics into a core strategic vision. The next step is developing the right business processes and building capabilities, including both data infrastructure and talent. It is not enough simply to layer powerful technology systems on top of existing business operations.”
What we've seen firsthand is that none of this is as difficult as it seems.
(Most of our clients start by integrating Big Data, analytics and benchmarking at the C-suite or partner level, because it can almost immediately be used for management decisions, and then expand adoption from there.)
If there's anything threatening in the report, it's the fate of companies who move slow, or adapt poorly, which is disruption and destruction.
You can read the full report here.
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