By Samuel Greengard
Big data and analytics have a solid future in the business world as these tools help organizations recognize complex patterns that might otherwise go undetected. But achieving results is easier conceptualized than realized.
Although many organizations have embraced big data and some are benefiting from next-generation analytics, the vast majority of enterprises continue to struggle with the concepts, according to a new Bain & Co. survey.
The report, “Driven by Data,” analyzed attitudes and performance at more than 400 global companies. It found that organizations with strong analytics capabilities outperform their competition in a number of ways. They’re twice as likely to be in the top quartile of financial performance within their industry, 5 times more likely to make decisions faster, three more likely to execute decisions as intended, and twice as likely to use data “very frequently” to make decisions.
Bain also notes that many organizations struggle to put big data to work effectively. These companies are “getting some of the anticipated results from big data but not the full potential of benefits they’d hoped for,” observes Rasmus Wegener, a partner in Bain’s IT practice.
The problem, he says, is that many organizations lack the right operational tools. Only 36 percent of respondents say they have a dedicated data insights team. Less than a quarter believe they have a clear strategy for using analytics effectively, and only 19 percent say they have “high quality, consistent data” in their organization.
Some industries are further along than others in implementing an effective big data strategy. These include financial services, technology and health care providers. Businesses that have a strong need for consumer insights, such as retail and consumer packaged goods, are frequently laggards, the report notes. What’s more, despite growth of big data spending at a predicted rate of 30 percent annually for the remainder of the decade, companies will continue to convert this spending into business value at a much slower pace.
” When it works, big data has the potential to create substantive results for businesses, but less than 5 percent of businesses are able to achieve significant results,” Wegener points out. “We expected to see big data falling into many of the chronic alignment gaps between business and IT, but we hardly expected to see such slim odds for business success.”
Wegener’s recommendations? Organizations should approach big data as a strategic and organizational effort, not a technology project. “CEOs and other senior management need to ‘walk the walk’ and show that they are using data-driven insights to make business decisions,” he says. In addition, “They have to show that they mean business by investing in data insights talent and by demanding that managers at every level of the company make data the core of critical decisions.”
What’s more, big data projects must begin with a business rationale and prioritization for the data needed to conduct the analysis, he notes. “Too many companies fall into the trap of simply using BI tools to mine the data they have on hand, rather than first having a strategic discussion, gaining an understanding of the data that’s needed to move the business forward, and then putting steps in place to create and harvest that data.”