Management consultancy firm McKinsey & Company published research in April 2016 that found that most businesses in its survey made significant investments in big data and advanced analytics.
The big question has been raised about the return on investment attached to these expenses, effectively elevating the big data issue to board level.
The research, based on a random sample of 714 global businesses, found significant productivity and operating profit benefits from investing in big data assets such as data warehouses. But to achieve these benefits the business must have access to data analytics talent and big data IT capabilities.
According to Richard McLaren, digital vice president at McKinsey, big data is a board issue. “The world is changing rapidly. Many boards use their intuition to make decisions, but this is no longer enough,” he says.
“It’s the board’s role to ensure the company and its executives make decisions on outwardly focused evidence. This is not just about big data. The idea that what worked last year will work in the future is a fallacy. External data must play a key role in decision-making,” he explains.
One of the conundrums which businesses grapple with when putting systems in place to manage and analyse data is how to extract the right information to make better decisions, which comes down to the availability, volume and relevance of the data.
McLaren says this means businesses must be aware of the information flows that matter to customers, as well as information about operations, safety information and data about how the business is meeting its compliance requirements.
“Does the organisation have a plan to obtain and capture the best available information? Does it have the right capabilities to handle this information?” he queries.
Directors must also have a handle on information that can prove the business is complying with the relevant laws and regulations that determine how it carries out its activities.