Gartner calls it Data Deluge. McKinsey calls it Big Data. No matter the name, the flood of incoming data to an organization, and data captured from the Web, is doubling every 18 months says McKinsey in its August 2010 Quarterly Report. Web communities, and technologies for capturing and analyzing information, give organizations access to customer data as never before.
How can the enterprise capitalize on all this captured data and knowledge within its organization?
The August 2010 McKinsey Quarterly Report offers advice:
1 – Rethink how people are organized
Employees are a company’s strongest assets. Traditionally, employees are organized around business units (finance, IT, marketing, etc.) What if employees were instead organized around critical tasks? Dow Chemical, an example in the report, set up its own social network to help managers identify the talent they needed to execute projects across different business units and functions. To broaden the talent pool, Dow even extended the network to include former employees, such as retirees. Furthermore, companies are leveraging web technologies and unified communications solutions to bring people together across organizational boundaries.
In this example, the organization was able to quickly identify and access the best talent and resources through the network. Not only that, but these resources could collaborate to innovate and solve problems, making the network and its people a true competitive advantage.
2 - Understand how data/information flows within your organization
For organizations to take advantage of intellectual capital and for technology to be effective, organizations need to understand how knowledge sharing and transfer take place. First, an organization must identify the type of information needed. With so much data, you want to pay attention to the useful and relevant data. Then enterprises can begin by mapping informational pathways through which information travels, observe how employees interact, and identify wasteful bottlenecks.
3 – Pay-as-you-go for applications that make intelligent use of data
There is no shortage of web applications, software, and other resources that can help an organization capture, organize, and make sense of its data. What is new is paying for services rather than hard physical assets that require large capital investments. These service offerings are the new assets that allow companies to purchase units of service and account for them as a variable cost. The real benefit is that businesses pay only for what they use. This becomes especially relevant for businesses with seasonal spikes and those wanting access to the latest technology and upgrades, for example.
Cloud computing best represents this new model, as companies are now accessing computer resources provided through networks.
4 – Leverage IT as a tool to reduce environmental impact
Interestingly, the environmental footprint of all this data is growing. McKinsey says electricity produced to power the world’s data centers is generating greenhouse gases on the scale of countries such as Argentina or the Netherlands. However, McKinsey research also shows that the use of IT in areas such as smart power grids, efficient buildings, and better logistics planning could eliminate five times as many carbon emissions as the IT industry produces. The demand for IT capacity and services will continue to explode; enterprises should be looking for IT-enabled solutions in other areas of the company to offset the environmental impact of the ever-increasing demand for data. Also, by harnessing the power of cloud computing, enterprises lessen their environmental footprint by using only what they need.
5 – Use acquired data for a new revenue stream
As data is captured within an organization and externally mined, enterprises should consider if and how a new source of revenue may be generated. McKinsey encourages businesses to ask themselves these questions, to assess a new opportunity:
• “Who might find this information valuable?” Can the company sell information related to consumer behavior or preferences?
• “What would happen if we provided our product or service free of charge?” If a company increased its online customers or membership significantly, a new revenue stream may come from advertisers or other companies who want access to this community of customers.
By capitalizing on all this captured data, enterprises can quickly and smartly invent new ways of doing business and create new market opportunities. The bottom line is that data can be a competitive advantage and a profit creator.