Big data and analytics have rocketed to the top of the corporate agenda. Executives look with admiration at how Google, Amazon, and others have eclipsed competitors with powerful new business models that derive from an ability to exploit data.
The trend is generating plenty of hype, but we believe that senior leaders are right to pay attention. Big data could transform the way companies do business, delivering the kind of performance gains last seen in the 1990s, when organizations redesigned their core processes.
As data-driven strategies take hold, they will become an increasingly important point of competitive differentiation. According to research by Andrew McAfee and Erik Brynjolfsson, of MIT, companies that inject big data and analytics into their operations show productivity rates and profitability that are 5% to 6% higher than those of their peers.
Even so, our experience reveals that most companies are unsure how to proceed.