Big data is changing the way businesses operate and is opening up new revenue streams. Rapid growth in the storage of information means that firms are investing heavily in this area. Gartner forecasts that 21% of companies with an annual turnover of $250 million will employ chief data or digital officers by 2015.
Innovation in business is increasingly being driven by large sets of data. This focus means managers must become more tech savvy. Many are finding a value in unlocking the potential of data with analytics.
Demand for employees skilled in this area has skyrocketed. According to research by employers’ network Tech Partnership and business analytics group SAS UK, the rate of job growth has surged 160% in the UK alone.
This growth is led by financial services, but from consulting to retail and from media to telecoms, companies are reaping the benefits of using consumer data to assess market trends and inform strategy.
A survey of 600 companies in the US and UK conducted by Accenture found that two-thirds had appointed a senior figure to lead data management and analytics over an 18 month period, and 71% expected to do so in the near future.
Companies see graduates of business schools, which are increasingly focusing some of their content on data management, as pipelines to satisfy demand.
“The future leaders of the world are the guys coming out of the MBAs and they are the guys who will establish the governance of data,” says Mazhar Hussain, director at KPMG Digital and Analytics.
As companies have poured investment into big data, business schools have found a new gap in the market. The provision of master’s programs in business analytics has greatly increased as demand from managers has risen.
“All businesses are affected by the new surge in data and are scrambling to take advantage of it and make sense of it,” says Kalyan Talluri, director of the MSc Business Analytics program at Imperial College Business School.
Analytics is now a necessary part of business education, he says. For Imperial in London this includes the new KPMG Center of Advance Business Analytics and a £3 billion campus extension devoted to data science. Imperial will house big established technology companies such as IBM and Intel.
It will hope to draw on the university’s sterling reputation for science and engineering. “This is one of our main selling points,” says Kalyan.
Many more top-flight business schools have launched specialist master’s degrees focused on data analytics. Imperial’s will take on 40 students at its launch in 2015 and other schools across Europe and the US have larger intakes and report insatiable demand.
This is driven by a need among businesses to hire staff who can lead big data efforts and firms which are generating revenue through digital services. Big banks including Goldman Sachs, for instance, have invested in financial analytics to offer data services to clients.
“There is an increasing demand for graduate business students with analytical talent,” says Jennifer Whitten, director of career services at W. P Carey School of Business in the US.
There is a need for data scientists but managers too must be equipped to deal with the vast quantities of data that companies are mining.
A survey last year by SAP, the business software group, found that 28% of workers use predictive tools regularly, and that figure is expected to rise to 42% over the next five years.
Most roles in analytics are within a functional department, with a big demand in marketing, finance and supply chain management, according to Jennifer. “Almost every industry is involved in trying to understand data across organizations, and they are all looking for talent that has the technical and business savvy to… Drive decision making within an organization,” she says.
Mazhar at KPMG calls this the fourth wave of economic value – after computers, the internet and mobile technology.
A fast-growing wing of the professional services group, KPMG Digital and Analytics has partnered with Imperial to drive insights in data, but the close connection to the business school will also act as a recruiting tool.
Mazhar says the 15 member team will have tripled in number by the end of 2015, such is demand from clients for services related to big data. “We’re looking for talent,” he says.
Many professional services firms have seen huge revenue growth led by their digital service lines – big data, the cloud and cyber security. This includes Deloitte Digital, which is rapidly expanding its consulting team to deal with increased digital demand.
“Consulting is a very viable option for our graduates,” says Kalyan at Imperial, along with technical analytics positions and management roles.
“There is a huge amount of need to see through the fog,” says Mazhar, who is also director of the KPMG Centre for Advanced Business Analytics. SAP’s survey found that 92% of respondents had seen the volume of data in their organization increase over the past year, while three-quarters believed their business needed new data science skills.
“Companies have recognized the need for deeper analytical rigor in decision making,” says Michael Hasler, senior lecturer in information, risk and operations management at the McCombs School of Business in Texas.
“The internet – and lower cost computing and data storage – has enabled organizations to gather and store much larger amounts of data that can be analysed… For informed decision making,” he says.
While company managers recognise the benefits that big data can bring, they are struggling to find people with the right skills – but potentially the biggest roadblock to widespread adoption of analytics is privacy.
Companies will increasingly need to integrate information from multiple data sources, often from third parties, and the incentives have to be in place to enable this, while issues related to privacy, security, and even liability are yet to be resolved.
Questions are also raised about the intellectual property rights attached to data, and who is responsible when inaccurate data leads to negative consequences. The security complex has been heightened by recent scandals involving large data breaches, including at media group Sony and US retailer Target.
“There’s definitely a trust issue and it’s a fine line that needs to be managed,” says Mazhar.
But he adds enthusiastically: “Data is going to change the way organizations work, from recruiting to creating new products to going to market – the whole stream of that strategy element will all change as a result of the way data impact it.”