The McKinsey & Company Global Institute just issued a report entitled “Big Data: The Next Frontier for Innovation, Competition, and Poductivity.” But it might just as well have been called, “The Economic Justification for Corporations, Credit Bureaus, Healthcare Providers, Retailers (and others) to Continue to Invest in Capturing Private Data.” In a nutshell, McKinsey’s researchers observe that the capture and analysis of mass amounts of personal data is destined to be a job engine and a boon to the world economy. The report’s authors cite a $300 billion benefit for healthcare providers in the U.S. alone; 250 Euro value to “Europe’s public sector;” and a $600 billion “consumer surplus” generated from using personal location data globally.

Thus we see the economic justification for capturing more and more personal data in the name of innovation and competition. It will lead to a 60% increase in retailers’ gross margins, and the 140,000-190,000 hardcore scientists and analysts will also create the need for an additional 1.5 million managers across multiple industries and the public sector.

Still, something about the whole premise should be seen as additional incentive to accelerate hiring and development of alternative strategies for storing and managing personal data – this time on behalf of the individuals who generate them. The McKinsey study makes no mention of personal data by individuals (though it does raise the specters of privacy concerns, security general public concern). When the authors observe “a shortage of the analytical and managerial talent necessary to make the most of big data,” it can be regarded as a tremendously optimistic view toward higher employment rates (“the U.S. alone has a shortage of 140,000 to 190,000 people with deep analytical skills”) or it can be seen as the big green light for enterprises to capture (and hold captive while they analyze) massive amounts of “exhaust data.”

Sure it can be for the public good, but the authors want to see the “right infrastructure is in place to ensure innovation” and competition (presumably among enterprises) and then starts to talk about benefits to “users” and “safeguards” be put in place to address public concerns.

There’s a “supply sider” feel to the report. As if the entire reason any of us should be interested in sucking up, analyzing, visualizing and presenting this data is to cut costs and improve efficiencies and then it will “trickle down” to the “consumer,” who incidentally is sometimes noted to be the “owner” of some of these data (like behavioral stuff). This is probably an accurate snapshot of how IT execs and management consultants should look at the opportunities surrounding “data capture, manipulation, analysis, visualization…” However, I’m haunted by a few terms that are blithely included in the prose. One is the mention that, because there is so much data, machines are required to “assist or replace” human decisionmaking.

That’s may be true, but such machine-generated logic is prone to amplify its own errors. What if the machines filter out or draw conclusions about what’s important by merely following its own ever-evolving set of rules? This seems totally out of the individual’s control. At the recent Internet Identity Workshops (IIW) I participated in a discussion of the power of “VRM plus CRM” that presumed that the massive investment in aggregation and interpretation of personal data under the control of enterprise databases would be accompanied by parallel development of tools and platforms operated by “trusted entities” that enable individuals to take more control of their own data.

Iain Henderson of MyDex, provided a graphical timeline depicting how CRM is evolving to include more data and metadata on individuals while leaving room for “agents” acting on behalf of individuals to develop resources in parallel according the the evolving principles of VRM.

Current CRM systems keep data about individuals locked inside corporate systems. They are the ones who will benefit from the billion dollar benefit from better analytics of massive amounts of data. McKinsey’s Report provides ample justification for that investment to continue. Still, a significant amount of economic value will be generated by giving individuals more “say” in what they are willing to reveal, to whom and under what conditions. Short of that, we’re are are all destined to remain the source of “exhaust data,” raw material for all the data mining, analytics, sentiment analysis… that will bring value to the corporate economy.

That is neither a market nor a conversation.

Categories: Articles

Tags: customer care, VRM, socialCRM, Big Data