Big data - Harnessing a game-changing asset

Big data Harnessing a game-changing asset A report from the Economist Intelligence Unit Sponsored by SAS Big data Harnessing a game-changing asset Contents Preface 2 Interviewees 3 Executive summary 4 Big data: sorting out the skill sets 5 Introduction 6 About the survey 6 Data matter 8 Global Partners LP: from data to dollars 9 Scripps Health: fostering a data-driven culture 11 Early days of big data: a land grab 13 The data sceptics 14 Growing pains 17 ManpowerGroup: managing knowledge 18 Stages of evolution 20 U.S. Gas & Electric: preparing for the deluge 21 ABN Amro: on the leading edge of data management 22 Conclusion 23 Appendix: Survey results 24 © Economist Intelligence Unit Limited 2011 1 Big data Harnessing a game-changing asset Preface Big data: Harnessing a game-changing asset explores the impact of big data and how companies are handling it. It also looks at the organisational characteristics of companies that are adept at extracting value from data. The Economist Intelligence Unit conducted the survey and analysis and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. The author was Dan Briody. Gilda Stahl edited the report, and Mike Kenny was responsible for layout. We would like to thank all of the executives who participated in the survey and interviews for their valuable time and insight. September 2011 2 © Economist Intelligence Unit Limited 2011 Big data Harnessing a game-changing asset Interviewees ABN AMRO ManpowerGroup Paul Scholten Dennis Edwards Chief Operating Officer Chief Information Officer Retail and Private Banking Business Mueller Water Products Cathay Pacific Airlines Bob Keefe Steve Tunstall Chief Information Officer Head of Corporate Risk Management Sanofi-Aventis EMC Serge Gornet Scott Yara Director of Vaccine Operations in Vice-president, Products Southeast Asia Global Partners LP Scripps Health Ken Piddington Jim LaBelle Chief Information Officer Corporate Vice-president of Quality, Medical Management and KPMG Physician Co-management Stan Lepeak Director, Global Research U.S. Gas & Electric Shared Services and Outsourcing Practice Greg Taffet Chief Information Officer Lanco Group Ajay Dhir Wharton Business School Chief Information Officer Eric Bradlow and Peter Fader Professors of Marketing and Levi-Strauss Co-directors of the Wharton Business School Wim Vriens Customer Analytics Initiative European Director of Business Process Improvement and New Business Operations Duke University David Dunson Professor Statistical Science © Economist Intelligence Unit Limited 2011 3 Big data Harnessing a game-changing asset Executive summary T he era of big data is upon us. As ever-more data pour through the networks of organisations worldwide, the race is on to extract insight and value from this abundant resource. The opportunities are enormous, as are the challenges. But companies that master the emerging discipline of big data management can reap significant rewards and separate themselves from their competitors. Indeed, research conducted by Eric Brynjolfsson, an economist at the Sloan School of Management at the Massachusetts Institute of Technology, shows that companies that use “data-directed decision-making” (defined “not only by collecting data, but also by how it is used—or not—in making crucial decisions”) enjoy a 5-6% boost in productivity. In June 2011 the Economist Intelligence Unit conducted a global survey of 586 senior executives, sponsored by SAS, to look at the state of big data, along with the organisational characteristics of companies that are adept at extracting value from data. It also explores the most challenging aspects of data management. The research findings are as follows: n There is a strong link between effective data management strategy and financial performance. Companies that use data most effectively—what we define as strategic data managers in our taxonomy of big data users—stand out from the rest. Fifty-three percent of respondents in this group say their organisations achieve higher financial performance than their peers, compared with 36% overall. The survey shows that these companies recognise the significance of data and attribute the responsibilities for data management strategy most consistently to the C-suite; 47% of survey respondents in this group report that it is set by either the CEO or another C-level business executive. These businesses understand the potential of big data and are already leveraging their data to their competitive advantage, applying them to strategy development, product direction, market development and operational efficiency. n Extracting value from big data remains elusive for many organisations. For most companies today, data are abundant and readily available, but not well used. Survey results confirm this. Nearly one in four survey respondents says the vast majority of its company’s data are untapped. Another 53% say they only use about half of their valuable data. Yet 73% say that data collection in their organisation has increased over the last year. These figures indicate that organisations are still learning how to manage big data. 4 © Economist Intelligence Unit Limited 2011 Big data Harnessing a game-changing asset Big data: sorting out the skill sets well-defined data management strategies that focus resources on collecting and analysing the most valuable data; Companies surveyed by the Economist Intelligence Aspiring data managers—companies that Unit fall into four loosely defined categories of big understand the value of data and are marshalling data management (see “Stages of evolution”, page resources to take better advantage of them; 20). Each group has specific characteristics, which Data collectors—companies that collect a large we assessed by cross-referencing the responses of amount of data but do not consistently maximise their each group against those of the rest of the survey value; and respondents: Data wasters—companies that collect data but Strategic data managers—companies that have severely underuse them. n Many companies struggle with the most basic aspects of data management, such as cleaning, verifying or reconciling data across the organisation. Nearly one-third of respondents admit their data governance practices are insufficient. Many struggle to deliver important data to the right people within an acceptable timeframe. And there is also a dearth of workforce skills required to sift through, analyse and develop insights from big data. Some experts believe that big data is not yet a boon to most businesses, and that there is an urgent need for more analytical capability.