The McKinsey & Company research arm, a.k.a. the McKinsey Global Institute, recently published its report entitled ‘The Age of Analytics: competing in a data-driven world’, which follows up on its 2011 study that predicted big data would be the next frontier for innovation.
In the past five years data and analytics tech has certainly moved forward, but the rate of progress leaves something to be desired. In fact, according to the findings, only a fraction of the value it had predicted in its 2011 report has been captured to date, although certain sectors seem to adopt faster than others. Algorithms are becoming more sophisticated, the volume and availability of data continues to rise, and computational power and storage have seen steady improvement. Together these trends are fueling advances in tech and disrupting traditional business approaches.
As data ecosystems continue to evolve, analytics providers will inevitably accrue value; however, certain data generators and aggregators will begin to develop unique value. Currently, data and analytics tech is fuelling six disruptive models that have the potential to transform the nature of competition, including:
- Large-scale data integration
- Data-driven discovery & innovation
- Radical personalisation
- Orthogonal data sets
- Enhanced decision making
- Hyperscale, real-time matching
Among the major conclusions drawn from the research, one thing made especially clear was that most firms are only capturing a small fraction of the potential value of data & analytics. Based on assessment, the report postulates that this slow pace of progress is at least partially attributable to ineffective transformation strategies and a lack of commitment to comprehensive implementation of data & analytics tech, which is necessary to realize its full value.
The report concludes by noting recent advances in machine learning, and goes on to predict an even bigger change on the way as deep learning begins to reach its maturity. The organisations that manage to leverage these capabilities to their advantage will be able to build the sort of unique, significant value needed to differentiate from competitors.
To read or download the complete MGI report, click here.