McKinsey Study: Some Great Stats to Chew On
In the spirit of full disclosure, I decided to save my health care post (I may separate it into two parts) because if you are not familiar with the U.S. health care system—past, present, and possible futures—you need a bit of background to understand how broken it is as well as how it compares to other sectors in the “big data and analytics world.” What’s really interesting about the McKinsey Study is that it looks at several industries across the big data spectrum, from novice to advanced, and needless to say, health care is on the low end of this one! There are a lot of reasons for this—that’s why I’ve got two posts in the works—but it’s safe to say that it comes down to privacy (not necessarily a bad thing) and lack of competition. Look for my health care posts beginning next week and if you haven’t already, check out my first set of takeaways from the McKinsey study.
Now, on to some fun McKinsey stats to chew on.
First let’s just take a look at the size of data (you and I both know that it’s big but sometimes it’s just fun to look at how big it really is) that is being generated:
- The world “used” more than 7 exabytes of disk storage capacity in 2010—nearly 80% of it is duplicate data. Have you ever heard the saying that data never dies? That would be because there are many copies of it available. In other words, once it’s out there you really can’t unring the bell.
- In 2009, all U.S. industries had, on average, 200 terabytes of stored data per company with more than 1,000 employees. Some sector companies had more than 1 petabyte.
In case you were wondering where all this “stuff” was coming from, you may not be surprised to learn that financial services sectors (banking, securities, investment services, etc.) led the way. (If you are a frequent reader of our blog, you may remember my post on credit card fraud detection where I break down the data numbers for you.) Communications, media firms, utilities, and government are quickly catching up due to high volumes of operations (for example, smart grids) and multimedia data (like streaming video). Today, multimedia data accounts for more than half the Internet backbone traffic and by 2013 is expected to be greater than 70%. Here’s a great “little” factoid for you: Wal-Mart’s (yes, I posted about them too) data warehouse now includes more than 2.5 petabytes of information, approximately half of the letters delivered by the U.S. Postal Service in 2010.
What is causing what appears to be this never ending data surge? Well, some of it is due to the Internet of Things. Huh? Look, there are a growing number of sensors and other devices embedded in “things” like RFID tags in towels to prevent theft (true story) or sensors in cars or smart appliances. Anyway, these “things” are viewed as “connected node” (machine-to-machine) devices and are expected to grow by 30% this year. In other words, more stuff is producing more data for us all to “crunch on!”
Who is considered the best-in-class according to McKinsey? Well it probably won’t surprise you that there are retailers and financial services companies on the list as these sectors were the first to recognize and reap the big data analytics rewards. Included in the list:
- Tesco, the third largest retailer in the world (after Wal-Mart and Carrefour), takes its ginormous amounts of customer loyalty data and “mines” it to segment customers and determine promotions.
- Amazon.com, the largest online retailer in the U.S., uses its customer data to power its recommendation engine (you know, all those “you might be interested in this” offers that come up when you are on the site).
- Wal-Mart (of course) for its early adoption of vendor managed inventory.
- Harrah’s, a hotel and casino, uses all of its customer-related data to compile detailed and complete profiles of its customers and then uses those profiles to increase customer loyalty through targeted marketing campaigns.
- Progressive Insurance and Capital One, use their customer-related data to test out different offers and then tailor those successful offers to customer segments.
Some final words to munch on. The PatternBuilders Framework is all about making our customers best-in-class: what would that look like in your industry? You know you’ve got all the data—now it’s what you do with it that matters!