Companies have more data than ever at their disposal, but are they doing enough with it? Taking full advantage requires tackling legal, regulatory, and talent challenges.
To make data and analytics more than just buzzwords, companies need to think about whether they’re following best practices, hiring the best talent for their needs, and getting what they want from their data. In this episode of the McKinsey Podcast, McKinsey senior partners Nimal Manuel and Bill Wiseman talk with Cecilia Ma Zecha about how more companies can make the best use of the data they collect and what the potential is for advanced analytics to help both business-to-consumer and business-to-business companies.
Cecilia Ma Zecha: Hello, and welcome to this edition of the McKinsey Podcast. I’m Cecilia Ma Zecha, an editor with McKinsey Publishing, based in Singapore. Organizations have more data than ever at their disposal, but actually deriving meaningful insights from that data and converting knowledge into action is easier said than done. Today we’re talking to Nimal Manuel, a senior partner in McKinsey’s Kuala Lumpur office. We also have Bill Wiseman, a senior partner normally based in Taipei, but who joins us today in Kuala Lumpur. Thank you both for being here.
Cecilia Ma Zecha: What is the potential of data and analytics to transform how companies organize, operate, manage talent, and create value? These are words that we hear all the time, but what’s the real potential?
Bill Wiseman: When you just look at some basic statistics, like the fact that half of the world’s data was created just in the last ten months, meaning that half of the world’s data, in the history of mankind, was created in less than the last year. It’s just truly shocking. The pace of change that we’re seeing is completely radical. I serve primarily industrial companies, and the way that I see companies taking action and using that data really is to drive another wave of productivity.
You had the wave of lean, you had the wave of outsourcing, and now we’re seeing the wave of productivity driven by data and analytics, enabling organizations to refine the way that people work together, the way that processes perform, and the way assets are productive. If you think about an oil well, for example, you’ve got more than 300 sensors downhole that are spewing out data at the rate of about a gigabit a second, in some cases.
Nimal Manuel: I want to build on what Bill said because there are two important steps here. There’s a lot of data being generated. A, not all of it is being captured, and then B, of what’s captured, a fraction is being used.
The cost of storage has gone down, so I see many of my clients storing more and more data but still struggling with how to best harness this data. Now at least we’ve got more and more of the relevant data to be used. Bill serves a lot of the B2B industrial-type companies. I serve more of the B2C, consumer-oriented companies, mostly in emerging markets.
There’s an increasing awareness that to compete and to be sustainable, they’ve got to go beyond gut instinct for doing business. It’s got to be data driven, it’s got to be analytics oriented, and that’s how business decisions have got to be made, on the commercial side as well as the operations side. The interesting thing is we are starting to see more and more use cases and applications of this data, but it’s nowhere near at scale.
Cecilia Ma Zecha: And why is that? What are the challenges that organizations face in adopting analytics? Bill?
Bill Wiseman: The biggest thing I see actually has nothing to do with data science or mathematics or data storage, it has to do with legal and governance frameworks. Most of the clients I work with are multinational. They’re dealing with different legal domains across countries. They’re dealing with different issues of consumer protection, different levels of employee protection.