Big data: lessons from the leaders is an Economist Intelligence Unit report, sponsored by SAS. It explores how far along companies are on their data journey and how they can best exploit the massive amounts of data they are collecting.
The business landscape is being shaped by data as never before. The sheer magnitude of data being produced is staggering. According to Eric Schmidt, Google’s chief executive officer, the world creates 5 exabytes of data every two days. That is roughly the same amount as was created between the dawn of civilisation and 2003.
When the Economist Intelligence Unit surveyed executives for the first report in this series, Big data: harnessing a game-changing asset, published in 2011, almost half of our respondents said that data had become an important factor for their business. Nearly 10% said that it completely changed the way their company worked. But the report also found that many companies struggle with basic aspects of data management and with their attempts to exploit their data effectively. It would seem that the next step in the big data journey is for companies to discover how they can extract value from the data they gather.
During the first half of 2012, the Economist Intelligence Unit sought insight on this issue and more. In a survey sponsored by SAS, 752 senior executives from a broad range of sectors and countries shared their thoughts on the world of data. In parallel, interviews were conducted with 15 executives, consultants and specialists who are regarded as data pioneers. Highlights of the research are as follows:
There is a strong link between financial performance and effective use of big data. Many companies are aware of the power of big data, but are not yet fully exploiting the data they collect. The survey findings suggest that they should not delay. Top-performing companies—dubbed “strategic data managers” in our previous report--process data more rapidly and see the rewards of doing so across functional areas. They also place a higher premium on data than do their peers, collect more of the data available outside of their organisation and use them more broadly across the business.
Companies become successful at exploiting data by focusing on business priorities. It is tempting to think that technology can transform a business. It can, but companies need first to recognise the problem they want to solve. Big data can only work its magic if a business puts a well-defined data strategy in place before it starts collecting and processing information. And that strategy should be based on key business priorities; the data component is developed afterwards, with the aim of serving those priorities. The importance of strategy is also a theme of the survey results. Forty-six per cent of executives from companies that significantly outperform their peers financially say they have a well-defined data strategy, more than four times the figure for those on par with their peers.
Talent matters as much as technology. Executives need to ensure that analytic thinking is not confined to the IT department. Managers across all parts of an organisation should be thinking about how data can improve performance and, with the help of data experts, transforming those thoughts into actions. This requires more than knowledge of computer programming and statistics. Data professionals are now required to understand a company’s priorities and competitive environment, so that they can exploit data to answer the right questions. Finding such people is not easy: 41% of survey respondents say that a lack of skilled staff hampers their attempts to process data more rapidly.
Social media analytics and web-tracking technologies can transform the way businesses collect data about customers. The impact of big data is felt across almost all functional areas. But according to interviewees, some of the biggest gains are being seen in customer-facing areas. Loyalty cards—which businesses use to collect fine-grained data on customer preferences—have already led to significant changes in retail and entertainment. Data from web-tracking technologies and the analysis of user-generated content on social networks are becoming similarly important. Nearly three-quarters of companies surveyed (66%) are already collecting web data. When used effectively, customer data can lead to dramatic improvements in loyalty, as well as more effective methods for enticing customers away from rivals.
Date Published: August 19th 2012