We’re operating in an environment where the pace and velocity of change is making it almost impossible to use the past to predict the future, and the sheer volume of data we encounter on a daily basis is daunting.
Every year, the amount of information online doubles. By 2020, some 50 billion devices will be emitting data non-stop. More shockingly, companies with 1,000 plus employees now store more information than the Library of Congress.
This data deluge feels like an old science experiment. Scientists found that when a frog was placed in a pot of boiling water it quickly jumped out. However, when the frog was placed in a pot of cool water that was slowly heated, the frog remained in the pot and ultimately boiled to death.
We’re being overwhelmed by data
How many of us feel like the frog? We’re being slowly overwhelmed by vast amounts of data, and yet are left ravenous for useful, actionable intelligence.
If we can wrestle through the information onslaught, research suggests companies using data and business analytics to guide their decisions are more productive and have higher returns on equity than their competitors that don’t. The McKinsey Global Institute found that “big data ushers in the possibility of a fundamentally different type of decision making. Using controlled experiments, companies can test hypotheses and analyze results to guide investment decisions and operational changes.
The bottom line is improved performance, better risk management, and the ability to unearth insights that would otherwise remain hidden. Radical customization, constant experimentation, and novel business models will be new hallmarks of competition as companies capture and analyze huge volumes of data.”
Large-scale data gathering and analytics are becoming the new frontier of competitive differentiation in innovation and growth, and some analysts say real-time data has become as important to business success as labor and capital.
Is Big Data a new corporate asset?
Businesses can no longer afford to operate on observations and hunches but must uncover solid business revelations. Big data could become the new corporate asset that will cut across business units and function as a powerful brand does, representing a key basis for competition.
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Yet, it’s estimated most organizations use less than 5 percent of their data, and a report from Oracle last year found that 14 percent of a company’s revenue is lost because enterprises are challenged by managing and analyzing info. Big data solutions offer new tools and techniques that allow companies to affordably exploit the other 95 percent of their data, and 73 percent of CEOs are taking advantage of them by making significant investments in their organization’s ability to draw meaningful customer insights from their data, according to an IBM study.
Companies that ignore big data will do so at their peril, considering how customer expectations for real-time relevance are driving the need for informed interactions with them. Additionally, as information becomes more readily accessible, it can threaten companies that have relied on proprietary data as a competitive advantage, so companies need to start seriously thinking about how they can exploit big data’s potential.
Good thing too — most of us aren’t that fond of boiled frog.
This was originally published on the OC Tanner blog.