According to IBM, 90 percent of the data in the world today was created just in the last three years. How does a company embrace their petabytes and yottabytes, mine the data for actionable knowledge and communicate that knowledge to the right people?
For most companies, that question remains unanswered, based on research published in the Fall 2012 issue of MIT Sloan Management Review.
The researchers surveyed companies about their data usage. A picture emerged of organizations hungry for insights but unable to consume anything more than tidbits from their mounds of data:
• 65 percent of respondents said their organizations were effective at capturing data, but just 46 percent of respondents said they were capable of mining the information and transmitting insights to the right people.
• Only four percent of organizations use all of the data that they capture.
• Nearly 30 percent of the surveyed organizations said that they use “not much” of the data they collect.
Data must be visible to be useful. People can generate a competitive advantage and innovation only when the insights that would accelerate these achievements reach their inboxes. IT groups typically perform well on capturing, storing and protecting data. However, most IT departments are overwhelmed by having to decide how data should be delivered to increase business value.
IT is not obsolete. It is the key to organizational transformation. MIT Sloan researchers suggest that companies need a “data-aligned culture” with “an organizational mindset that can nurture data’s metamorphosis from insight to value.”
Increasingly, analytics guide business strategy. But companies must bridge the communication gap between IT, the people who analyze business data and the business itself. Data analysts must be empowered to write comprehensive recommendations and implementation plans that help answer the eternal question, What should we do next?
Consider the astonishing capabilities of location analytics. When analysts combine location data with information about retail transactions, information emerges about which market segments are buying what, where, when – and why. Companies like Starbucks and McDonalds use location analytics to plan business expansion.
Innovations from data mining can exact a steep price. A business uses analytics to achieve a competitive edge, but is forced to discard business models and regularly analyze petabytes of data. Then there are the personal costs. Discarding business models and continually tweaking business processes can unnerve people and challenge vested interests. This shifting, roiling business landscape appears in the research. Respondents who reported that analytics improved their company’s ability to innovate were also likely to report disorder in the power structure.
Amidst this shifting landscape, organizations must guard against disconnecting the logic from newly standardized processes and operations. Social business is one way to increase personal connections and show more – not less – empathy to customers.
Businesses that hunger for insights and innovation face sizeable challenges – some of those challenges as extensive as their hard drives full of data waiting to be analyzed.