"Big Data" is such a new field, and growing seven times faster than the information/communications technology market, that few companies are confident about how they should approach it. Does keeping on top of the relentless flow of information require a small internal team or outsourcing?
It’s unlikely that your Big Data effort can remain fully internal, unless your company is currently overstaffed. Insiders will have to be taken off other tasks. Big Data research is time-consuming, not least because the mountains of data that companies amass are often separately housed in departmental silos—R&D, manufacturing and engineering, for example.
As the McKinsey Global Institute points out, an ideal plan smoothly coordinates internal and external elements. “Companies will increasingly need to integrate information from multiple data sources, often from third parties, and the incentives have to be in place to enable this,” the consultant said. Chances are, your current analytical methods are outdated, even if they are of relatively recent origin.
MIT researcher Andrew McAfee points to an Allstate contest that offered a $10,000 prize to competing teams that developed new methods for predicting vehicle-based insurance claims. The winning entry was 340 percent more accurate than the company’s then-current analysis. Even large companies can be out of their depth with Big Data. Support areas that consultants can help you with include planning and needs assessment, data/process mapping, integration planning, technology support and change management. Some of this you can generate in-house, but probably not all of it.
So let’s assume that some level of consulting will be needed. How do you locate the right firm? The answer lies in a realistic assessment of both where your company is and where it’s likely to be.
According to Matt Fumento, vice president for strategy and development at consulting company Spring International, “In selecting a Big Data consultant, the most important considerations are determining where you are in your evolution of having integrated processes/systems/data feeds and determining what you’re trying to accomplish. Suppliers have different strengths, depending on your needs and objectives. We recommend developing a plan that coincides with company growth plans and outlines the steps to be taken both in the short and longer term. With that in hand, it will be easier to determine which supplier can be helpful.”
The important thing is to right-size the data flow so it doesn’t overwhelm your organization. There’s not much point in enabling a steady flow of analyzed information that nobody in the company has the time or the mission to act upon. Your staff will need to include people poised on the all-important gap between business and technology.
One of the biggest roadblocks to hiring a Big Data consultant may be finding one that isn’t already overbooked. Ian Bertram, a vice president at technology analyst Gartner, told Financial Review that there’s a serious shortage of data scientists in 2012. “Many universities have dropped technology components but need to bring them back, combined with business management and analytical skills,” he said. “We will be in short supply for several years now until the next wave comes through.”
But the rewards of a high-priority approach to Big Data can be great. According to McKinsey estimates, retailers who optimize their information flow could increase operating margins by more than 60 percent, and the U.S. healthcare sector could create more than $300 billion in value annually (two-thirds of that from reducing health expenditures by 8 percent). The consulting company estimates that “users of services enabled by personal-location data could capture $600 billion in consumer surplus.”