Benefiting from the data explosion

The volume of data companies and public sector organisations generate has exploded in recent years. Owen McQuade looks at the implications, and opportunities, for businesses and public services.

For £500 (€597) you can now buy a disc that can store all the world’s music.  With the growth of the online world and five billion mobile phones in the world, the amount of data has grown into a torrent.  With the drive towards innovation through rapidly developing information-based technologies, the intelligent use of data now offers companies real competitive advantage. The arrival of social media has added further to this torrent with an explosion in the amount of user-generate data.  Some commentators see this as the beginning of the era of ‘big data’ or as Chris Anderson, Editor-in-Chief of Wired, terms the ‘Petabyte Age’.

This torrent of data is impacting on many organisations across a wide range of sectors.  It offers significant challenges in being able to manage the bigger volumes of data and also offers the opportunity to tailor products and services to meet end-user needs.

Whilst ‘big data’ will impact on all sectors of the economy, some sectors will see more innovation through the use of data than others.  Consulting firm McKinsey has identified five areas that offer the most potential for exploiting big data:

• health care;
• public services;
• retail;
• manufacturing; and 
• personal location data.

Big data offers significant opportunities to innovate in how health care is delivered.  One such opportunity is the potential to improve efficiency and effectiveness by exploiting the vast amount of electronic information that is available throughout health care systems.  There are other pools of big data that offer innovation, these being pharmaceutical R&D data, clinical data and patient behaviour data.

In retail, because financial transactions are now mostly electronic, companies are capturing a mass of transactional data which they are translating into personalised offerings.  In the physical world, millions of networked sensors are being embedded in devices such as the smart phone, industrial processes and even in the home.  This offers the opportunity for the next phase of innovation in the manufacturing sector.

How big data captures value

Perhaps the simplest and often most effective value is created by creating transparency in the data.  By sharing data with key stakeholders in any process there are immediate benefits.  Although this might be possible relatively easily, there are often cultural barriers within organisations that resist the sharing of data outside the organisation.

Segmenting populations to customise actions offers innovation in the retail sector and in the delivery of public services.  Retailers are only beginning now to start leveraging the vast amount of personal shopping data being gathered.

Big data analytics offer the opportunity to support, and even replace, human decision-making with automated algorithms.

New business models will emerge in many sectors using the pools of data that will become available.  Many of these pools are to be created in the future through things such as the introduction of smart meters for utility services.  The development of telehealth and telecare will free up vast amounts of data on patients and will offer new opportunities to service the growing needs of an ageing population.

As the era of big data begins, there will undoubtedly be developments in the near future not foreseen today.  Much like the growth of social media and cloud computing which were mere concepts not that long ago.  The era of big data will challenge all sectors of the economy and promises to revolutionise several sectors in the medium term.