Impact of big data and social media #2 – McKinsey Quarterly

by Justin Souter on November 18, 2011


Second in a series of two posts about big data and social media. First post is here. This particular post draws upon three articles published in the McKinsey Quarterly.

Getting to grips with ‘big data’

Here, I’m concentrating on ‘big data’ which, I think, is rather eloquently captured in this vignette by Brad Brown, Michael Chui, and James Manyika:

The top marketing executive at a sizable US retailer recently found herself perplexed by the sales reports she was getting. A major competitor was steadily gaining market share across a range of profitable segments. Despite a counterpunch that combined online promotions with merchandizing improvements, her company kept losing ground.

When the executive convened a group of senior leaders to dig into the competitor’s practices, they found that the challenge ran deeper than they had imagined. The competitor had made massive investments in its ability to collect, integrate, and analyze data from each store and every sales unit and had used this ability to run myriad real-world experiments. At the same time, it had linked this information to suppliers’ databases, making it possible to adjust prices in real time, to reorder hot-selling items automatically, and to shift items from store to store easily. By constantly testing, bundling, synthesizing, and making information instantly available across the organization—from the store floor to the CFO’s office—the rival company had become a different, far nimbler type of business.

[Quote from the first article highlighted below]

Aim of this post

The aim of this post is to help you get your head round this fast-emerging topic, and start building the connections both mentally and practically you need to help your business compete in this area.


There are three articles:

  • Are you ready for the era of ‘big data’?
  • Competing through data: Three experts offer their game plans
  • Seizing the potential of ‘big data’
If you have problems reading the articles via the embedded widgets, you can click on the sub-section headings to take you to the original articles on the McK Quarterly website. The link above the documents takes you to the Scribd location (i.e. where there PDF is publishined online).

Are you ready for the era of ‘big data’?

“Radical customization, constant experimentation, and novel business models will be new hallmarks of competition as companies capture and analyze huge volumes of data. Here’s what you should know.” Useful introduction to the topic.

Are you ready for the era of ‘big data’

Competing through data: Three experts offer their game plans

“MIT professor Erik Brynjolfsson, Cloudera cofounder Jeff Hammerbacher, and Butler University men’s basketball coach Brad Stevens reflect on the power of data.” Practical tips about what strategies to pursue.

Competing Through Data — Three Experts Offer Their Game Plans

Seizing the potential of ‘big data’

“Companies are learning to use large-scale data gathering and analytics to shape strategy. Their experiences highlight the principles—and potential—of big data.” Looking forward…

Seizing the potential of ‘big data’


Arguably the rate of change in the business world is speeding up. Technology, and IT in particular, is giving rise to disruptive changes that organisations of all types [I would argue] must engage with to prepare for the future. Companies like IBM are tooling up to take advantage of the opportunity, and the effect is going to noticed throughout the business – e.g. marketing departments are encouraged to recruit for technology skills!

The upsides are incredible insights, competitive advantage, and empowerment. The downsides are lack of relevant skills, overwhelming technical change, and being out-innovated by more savvy competitors.

You could argue that this is the preserve of big business, but with the power of Software-as-a-Service, and the affordability of Cloud computing then – used wisely – big data could very well be effective for all sizes of organisation.

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