The application of analytics capabilities to business and other problems offers massive opportunity, and we’ve only just scratched the surface in realizing the potential. That’s the high-level takeaway from McKinsey Global Institute in a new 136-page report, The Age of Analytics: Competing in a Data-Driven World.
The report updates another frequently-cited McKinsey report from 2011 — noted for its predictions of major data science talent shortfalls — adding recent developments and new trends such as the impact of machine learning and deep learning.
“We think data and analytics represent the single biggest opportunity available to management teams to create value, improve performance, and change the nature of competition,” said Nicolaus Henke, global leader of McKinsey Analytics, in a prepared statement about the new report released this month. “The biggest barriers companies face in extracting value from data is adapting core processes and building new capabilities at scale. Embracing analytics is not about adopting a new tactic. It’s about changing your business model and the fundamental way you make decisions.”
Among the themes of this report are the following:
- Most companies are capturing only a fraction of the potential value from data and analytics, according to MGI. A great deal of the value is still being left on the table. MGI said that the greatest progress has been in location-based services and in retail, both areas with digital native competitors. But other industries have captured less than 30% of the potential value, including manufacturing, the public sector, and health care.
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