The Big Data Era
by Gerald Trites, FCA

A growing part of business is a focus on data. Companies that have learned how to obtain and create value for data are the companies that will succeed in the modern world. That is why data analytics has become such a big industry. And why the ability to analyze has become such a major part of the search for talent by many organizations. The importance of data is well known. What is not quite as widely appreciated is the magnitude of the change being wrought by data.

In June, 2011, McKinsey Global Institute published their landmark study, "Big data: The next frontier
for innovation, competition, and productivity". Since its publication, the study has gained influence in business, academia and research. Big data has become a major watchword of the 21st century.

When we talk about big data, we mean the vast quantities of data that are created and consumed every day in our world. Not very long ago, we discussed data in terms of megabytes. Then came gigabytes and in larger systems, terabytes. Each exponentially larger than its predecessor. Now we are talking about exabytes.

To get an idea of the meaning of exabytes, one of them is equal to a byte times 10 to the 18th power. That's equal to one quintillion bytes. To put it another way, one exabyte is more than 4000 times the total information stored in the US Library of Congress.

The data is being created at a growing rate through internet traffic, media, research and many other ways. A significant portion is generated through social media, mobile devices, the cloud, etc.

From a business point of view, the data represents a vast resource for defining customer needs, designing new products, determining business trends and developing strategy. The value of data is becoming so important that its presence marks the dawn of a new revolution in business, one in which the success and even the survival of a business depends on its ability to create value from the data, to direct it to the creation of strategic advantage. Companies are beginning to realize this and are ramping up the search for talent that has analytical abilities; something that is becoming a major industry in itself.

But the creation of value from data is subject to a number of constraints. The old ERP and CRM systems, while designed to direct data analysis to strategic decision making, were never designed to cope with the vast volumes of data in the big data world, nor were they designed to cope with the data that comes from social media, although Social CRM has been moving in that direction. The analytical sophistication of these business systems needs to be seriously improved. Also, corporate systems tend often to be segmented into different platforms, thus restricting the mobility of data and the ability to analyze it.Finally, too many managements and their advisors don't get it yet - are not "data-minded" and therefore will miss the strategic advantages that come from big data. And the shortage of people with serious data analytical abilities limits the ability of business to create that value, even if they realize it needs to be done. Absolutely a big challenge for educators and corporate trainers.

We've gone from bytes to exabytes in less than thirty years. In a world of exponential growth, imagine what the next thirty years has in store.

For a copy of the McKinsey report, go to the McKinsey Global site here.