The hidden fortunes of data and analytics
As technology becomes more and more pervasive, we are seeing an increased integration of mobile devices, sensors, applications and other data feeds into everyday life. With this comes an upsurge in the amount of data being collected and stored.
There are two key questions that need to be asked in light of this ever-growing data resource:
- What are companies doing with all this data?
- Are they extracting the value hidden in these huge data stores?
Is data the new gold?
Today’s C-level executives are facing unprecedented business demands. These range from operating in more countries, dealing with new regulations and increasing government oversight, to complex tax policies, cost reduction, increasing risks and customer centricity. This complexity is further compounded by complex systems and data management.
Data has become so powerful that participants in the 2012 World Economic Forum in Davos, Switzerland, declared it a new class of economic asset, like currency or gold. Those organisations that are collecting, managing and analysing their data effectively have seen benefits in the form of better business decisions and a lasting competitive advantage.
The difficulty in reaching that tipping point is that data is not confined to an organisation’s systems but increasingly includes external data, which makes it difficult to unlock that elusive term called value. The so-called “internet of things” is adding more and more data to our world. The challenge for businesses is how to extract value from this.
The Big Data explosion
The amount of data available and that is being produced is enormous. It is also created and shared at incredible speeds, for example: approximately 98000 tweets are shared every 60 seconds. The variety of data sources is incredible and varied, from social media platforms to log files.
At KPMG, we believe that key to effective use of data lies in its veracity and value. The information attained and available is only of use if it can be relied on. It is important for organisations to consider the sources of data are trustworthy.
The biggest challenge is not to get caught in the hype of data analytics or rolling out data projects because everybody else is doing it. The focus must be on creating value for your organisation. What is the business problem you need to solve by looking at this data?
Anybody can run data analytics on enormous datasets, but it is only those organisations that are getting veracity and value right that will succeed.
Data benefits strategic decision-making
A recent Economist Intelligence Unit survey highlighted the fact that the department that benefited the most out of data was the strategic decision-making department, followed by the marketing and communications department and, lastly, customer service.
Organisations are also realising that there are risks associated with data collection and analysis. For example, it might be a legitimate way of collecting data but would your customers like it if they knew what you know about them? What about moving your customer data between countries? Certain data models can actually pinpoint the exact identity of a person, just by collecting the right types of data. What if that person never gave their permission to use this detailed information? Is it still legal or ethical to continue?
Data and analytics is a hidden fortune. But businesses need to understand why they are collecting the data and what risks need to be addressed before the data is used commercially.
How is your business capitalising on Big Data?