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Companies collect mountains of data, but often don't use the information in any useful way. Jim Zimmermann, Director, Skillsoft Books24x7 explains how companies that have invested in analyzing their Big Data repositories have often discovered information that have a large impact on the direction of their businesses.—Jennifer Bosavage, editor
What’s the big deal about Big Data and Big Analytics? All successful organizations collect lots of data – about customers, purchases, manufacturing, supply chain, employees, their web sites, etc. – and the amount of data is increasing exponentially (for example, location-based data, RFID transactions, medical records, etc). Although some of this data is structured, there is an increasing amount of unstructured data such as free-form text, images, videos, audio, etc. Much of the data that has been collected is just sitting somewhere waiting for someone to decide if it may have value to an organization.
A recent McKinsey Global Institute study, “Big data: The next frontier for innovation, competition, and productivity,” defines Big Data as “datasets whose size is beyond the ability of typical database software tools to capture, store, manage, and analyze.” Big Analytics is the process of analyzing Big Data to derive value for the business. Big Data and Big Analytics have been successfully employed in both the private and public sector to use the data to derive business value. Organizations that have invested in analyzing their Big Data repositories have often discovered information or trends that have a profound impact on the future direction of their organizations.
The McKinsey study, continues: “Our research finds that data can create significant value for the world economy, enhancing the productivity and competitiveness of companies and the public sector and creating substantial economic surplus for consumers. For instance, if U.S. health care could use big data creatively and effectively to drive efficiency and quality, we estimate that the potential value from data in the sector could be more than $300 billion in value every year, two-thirds of which would be in the form of reducing national health care expenditures by about 8 percent. In the private sector, we estimate, for example, that a retailer using big data to the full has the potential to increase its operating margin by more than 60 percent. In the developed economies of Europe, we estimate that government administration could save more than €100 billion ($149 billion) in operational efficiency improvements alone by using big data.”
The study finds “A shortage of the analytical and managerial talent necessary to make the most of big data is a significant and pressing challenge and one that companies and policy makers can begin to address in the near term. The United States alone faces a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts to analyze big data and make decisions based on their findings.”
The push toward Big Data and Big Analytics fuels an organization’s need for advanced technology-based analytics tools as well as top analytical talent to perform analysis of the data and to apply the findings to produce improved business results. Analysts point to a need to build an internal analytical culture, and they claim that despite early successes, analytics are not integral to decision-making processes in most organizations.
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