Simon London:
Before we get into detail on the latest research, I think it might be helpful
to take a step back and clarify what we mean in terms of the age of analytics. Cynics would
say, “Come on. Companies have been collecting and analyzing data forever, pretty much.” So
what’s really new here? What’s driving the data-analytics revolution?
Nicolaus Henke:
Thanks, Simon. It’s a great question. We think there are three things that
have really changed. The first thing that has changed—simply, there’s loads more data. Believe
it or not, about 90 percent of the world’s data existing today didn’t exist two years ago. Ninety
percent. The second one is we simply have computing power, with the cloud and connectivity,
that is much, much lower cost than it was ever before. So we can compute more.
The third is that by leveraging machine-learning techniques, we can analyze much more. To
give you an example, in the past it took a statistician to come up with a potential hypothesis
for regression, and it took a day or two. You could make, maybe, three a day. With these new
techniques, you can add all these things together. We can, in our normal work, do hundreds of
millions of calculations a day, which obviously increases the granularity of our work.
Michael Chui:
If I could just build on that idea, while all those trends have come together, one
of the things that’s happened between the time we published our big data report in 2011 and
now is the degree to which CxOs and senior leaders have started to understand that this is
changing the basis of competition in individual sectors.
While we’ve discovered there’s a lot more work to be done, we’ve seen an awareness, at
the executive level, of the importance of using data and analytics in order to compete and,
increasingly, to make decisions in very different ways. For example, people are conducting
experiments rather than just basing judgments on the experience they’ve had in business.
Simon London:
Michael, as you mentioned, in 2011 we published a big piece of research
flagging the transformative potential, I think it’s fair to say, of this new wave of data and analytics.
Five years on, how much of the potential you identified back then has been realized? What
does the report card look like?
Michael Chui:
To be honest, the progress has been mixed. We have seen some industries
and some domains—such as location-based services and, to a lesser extent, retail—that
really have moved the needle. One of our observations is that those are places where we’ve
seen digitally native companies create competition. And that really forced the industry forward.
However, there are a number of other industries—whether it’s the public sector, healthcare, or
even manufacturing—where some progress has been made. But, honestly, with regard to the
total amount of value that could potentially be captured, there’s a lot more work to be done.
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