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NewImageEvery company should have a plan for dealing with the exponential growth in their data. That is, they need a Big Data Strategy. While the term, Big Data, has been thrown around a lot in both business and technical publications, very few stop to define it in such a way that make it a useful and actionable business concept.

Big data is characterized by the dramatic growth in the volume of data (internally generated and from external sources) available to businesses. It is a characteristic of a companies IP generating capability and presents new opportunities for companies to grow revenues through better customer (AKA data) insights. Data growth have been around since the beginning of time, but has become a challenge given the recent improvement in integration, adoption of the cloud, and leveraging of social networks.

There are some very powerful and somewhat overwhelming statistics driving the big data discussion that should make business stop, listen, and think:

– $600 to buy a disk drive that can store all of the world’s musicNewImage

– 5 billion mobile phones in use in 2010

– 30 billion pieces of content shared on Facebook every month

– 40%projected growth in global data generated

– 235 terabytes data collected by the US Library of Congress by April 2011

– 15 out of 17 sectors in the United States have more data stored per company than the US Library of Congress

– $300 billion potential annual value to US health care—more than double the total annual health care spending in Spain

– €250 billion potential annual value to Europe’s public sector administration—more than GDP of Greece- $600 billion potential annual consumer surplus from using personal location data globally

– 60% potential increase in retailers’ operating margins possible with big data

– By 2018, the United States alone could face a shortage of 140,000–190,000 more deep analytical talent positions and 1.5 million more data-savvy managers. This alone is hugh!

NewImageMcKinsey Global Institute understands this issue quite well. In there “Big data: The next frontier for innovation, competition, and productivity” report, released May 2011, they identified five ways that Big Data could create value:

1. Big data can unlock significant value by making information transparent and usable at much higher frequency.

2. As organizations create and store more transactional data in digital form, they can collect more accurate and detailed performance information on everything from product inventories to sick days, and therefore expose variability and boost performance. Leading companies are using data collection and analysis to conduct controlled experiments to make better management decisions; others are using data for basic low-frequency forecasting to high-frequency nowcasting to adjust their business levers just in time.

3. Big data allows ever-narrower segmentation of customers and therefore much more precisely tailored products or services.

4. Sophisticated analytics can substantially improve decision-making.

5. Big data can be used to improve the development of the next generation of products and services. For instance, manufacturers are using data obtained from sensors embedded in products to create innovative after-sales service offerings such as proactive maintenance (preventive measures that take place before a failure occurs or is even noticed).

So, if you are into Big Data, then spend some time mining the MSI report. It is time well $pent.

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