Embedding ‘big data’ and analytics into company operations enables firms to achieve gains in productivity and profit 5 - 6% higher than competitors in the sector. In order to harness this valuable data properly however they need to develop a plan from the start.
According to three business analysts who have just published an article* in McKinsey Quarterly, companies wishing to reap the benefits of harnessing ‘big data’ need to draw up a plan. If this seems blindingly obvious, it may be surprising to learn that the analysts found that the majority of firms do not take the time to draft a simple plan which would allow them to work out how data, analytics, frontline tools and people can be brought together to create business value. “The power of a plan is that it provides a common language allowing senior executives, technology professionals, data scientists, and managers to discuss where the greatest returns will come from and, more important, to select the two or three places to get started,” underline the authors. A good plan will highlight, among other things, which of the firm’s businesses will be allocated the most capital and what capabilities are needed to ensure strong performance.
Three core elements, plus ‘enabler’
The article argues that in order to put a plan together, a company should focus on three key areas: first, choosing the internal and external data they intend to integrate; second, selecting, from a long list of potential analytic models, the ones that will best support their business goals; and third, implementing intuitive frontline tools that integrate the analysed data into day-to-day processes and translate modelling outputs into tangible business actions in a way that employees will understand and take on board. And while details and approaches will vary by industry, the authors point to a great structural similarity across industries. McKinsey’s advice is that most companies will need to plan major data-integration campaigns, using internal data from customers, transactions, and operations, plus external information from partners along the value chain. Going forward, they’ll also need to integrate data from sensors embedded in physical objects. The analysts also point to a “critical enabler needed to animate the push toward data, models, and tools” – a Big Data Plan is likely to disappoint if the organisation does not have “the right people and capabilities.”
Key challenges for Big Data planning
Each company’s Big Data Plan will need to meet a number of common challenges. The analysts underline that a plan must have the support of top management. In fact it is up to senior management to prioritise investment and balance it with the company strategy. In addition of course, they must ensure the plan is accepted by all employees. The authors compare the advent of Big Data planning with the introduction of company strategic planning several decades ago, pointing out that the basic decisional elements of a Big Data Plan are analogous to those of a Strategic Plan. Once the plan is in place it provides a pathway forward. Integrating data, launching pilot projects, creating new tools and training programmes can all take place as part of a clear vision. The initial plan will obviously be adjusted over time. Indeed, one of the main advantages of big data and analytics is that firms can learn new things about themselves that up to now they have not been able to see.
* Big Data: What’s Your Plan? by Stefan Biesdorf, David Court and Paul Wilmott