When I read the Harvard Business Review about a study that was conducted by MIT addressing how Big Data improved business my human antenna went up. Excuse me, but has anyone even done any digging. The answer is yes.
Here’s the truth. Where are these case studies? There was a team at the MIT Center for Digital Business, working in partnership with McKinsey’s business technology office and with our colleague Lorin Hitt at Wharton and the MIT doctoral student Heekyung Kim. Harvard Business School set out to test the hypothesis that data-driven companies would be better performers. There were a bunch of structured interviews with executives at 330 public North American companies about their organizational and technology management practices, and gathered performance data from their annual reports and independent sources.
the use of data-driven decision making were, on average, 5% more productive and 6% more profitable than their competitors
Not everyone was embracing data-driven decision making. In fact, we found a broad spectrum of attitudes and approaches in every industry. But across all the analyses we conducted, one relationship stood out: The more companies characterized themselves as data-driven, the better they performed on objective measures of financial and operational results. In particular, companies in the top third of their industry in the use of data-driven decision making were, on average, 5% more productive and 6% more profitable than their competitors. This performance difference remained robust after accounting for the contributions of labor, capital, purchased services, and traditional IT investment. It was statistically significant and economically important and was reflected in measurable increases in stock market valuations.
Reference: Harvard Business Review; Big Data