I’ve written before about the rise in data driven organizations, but there are still many who remain to be convinced about the power of big data to change how your organization behaves.  If you’re still unconvinced, a recent report from the McKinsey Global Institute (MGI) may help to convince you.

The paper builds on previous analysis of the area by MGI back in 2011, and suggests that since then, the range and scope of analytics in our organizations has grown considerably.  Indeed, the challenge now is less about whether you should, but how new analytics capabilities are integrated into their daily operations.

Integrating analytics

That 2011 paper outlined five key areas in which analytics could make a big difference for organizations, and the success in achieving improvements has been uneven at best.  The retail sector, for instance, have done very well, but industries such as healthcare and the public sector have been laggards.  As with many other technologies, the speed with which early adopters adapt to new technologies can see them rapidly moving away from those who are slower on the take up.

These early adopters are using analytics both to improve their core business, but also to create entirely new business models.  With talent in the field at such a premium, there is often a winner takes all approach to adoption, with those who invest heavily marching ahead.

As with so many innovations, those who build analytics based organizations from scratch have a clear advantage over legacy companies that have to overhaul existing systems.  Somewhere between the two are those who have invested heavily in technology, but who have not yet changed their organizations to fully capitalize on the technology.  Such organizations struggle with talent and process related issues, and therefore are not yet seeing the true value of analytics.

Making the move

The report suggests that a first challenge to overcome is to successfully incorporate data with the overarching vision for the company.  Next, organizations need to develop the capabilities and business processes to fully capitalize on the data they collect.  As with so many new technologies, it is these ‘softer’ elements that matter as much, if not more than, the actual technology itself.  These challenges have thus far largely not been met, hence why so many organizations are not realizing the true potential of analytics.

We should be under no illusion however, as these challenges are only going to grow, so the onus really is on incumbents to grasp the nettle immediately to prevent falling even further behind.

With machine-learning and deep-learning tools growing in scope and availability, the next generation of applications could be significant, and impact on all aspects of the organization.

Of course, it isn’t just McKinsey that are examining this issue.  A paper last year from the Institute for Corporate Productivity examined the rise in workplace analytics.

The paper, called The Promising State of Human Capital Analytics, reveals that nearly 70% of organizations are now using some form of human capital analytics to monitor performance amongst employees.

“Successful companies tend to be those that purposefully use data to anticipate and prepare rather than to react to daily problems,” the researchers say. “The future focus of professionals in the human capital analytics field will increasingly be on using analytics to guide strategic decisions and affect organizational performance.”

The report goes on to report that senior managers support the data they get back from their analytics projects, even though studies suggest they don’t always use data when making their own decisions!

Data and analytics are already shaking up multiple industries, and the effects will only become more pronounced as adoption reaches critical mass—and as machines gain unprecedented capabilities to solve problems and understand language. Organizations that can harness these capabilities effectively will be able to create significant value and differentiate themselves, while others will find themselves increasingly at a disadvantage.