McKinsey director, David Court, doesn’t claim it is easy to achieve big impact with big data. Amazon and Google may thrive on data analytics, but most companies fear doing it or restrict it to small parts of the business. 

Many companies profess to be on board but are frustrated at the lack of results or change in practices. When Court and colleagues at the McKinsey Global Institute asked companies “what degree of revenue or cost improvement they had achieved through the use of these (data analytics) techniques,” three-quarters said it was less than 1 percent.

Court suggests four ways to help firms make the transition from being merely big data enthusiasts to committed quants.

1. Adopt new technologies to scale impact. Few areas are enjoying more investment or innovation than big data and analytics technology. Some products even offer ways to deal with the challenge of achieving scale. Court notes that targeted solutions from providers help clients achieve direct impact on the bottom line and do it swiftly. Second, self-service tools are building users’ confidence in analytics. And finally, it’s becoming easier to automate processes and decision-making about big data. Sensors, for example, can capture real-time, large-scale data, and analyze it in real time, as with software that predicts the severity of insurance claims.

2. Focus on change management. Benefitting from big data analytics is about much more than using new technology. Court writes “Managers need to change their way of making decisions to take advantage of analytics.” Changing all of a company’s decision-making processes would be too overwhelming. Focus instead on changing behavior and processes in areas such as pricing, inventory allocation, or credit management.

3. Redesign jobs. Automating jobs changes the responsibilities and roles that go with them. If you automate pricing, for example, a key part of the profit formula will be done by a machine, making it necessary to redefine the human’s role. For example, insurance claim managers might work only on the most complex or severe claims.

4. Build a foundation of analytics in your culture. Encourage engagement with competitions that reward and recognize teams that generate powerful insights through analytics. Hold training boot camps on self-service tools. Create a community of power users to support newbies. And share the excitement at meet-ups, with good words from leaders, and newsletters.

Source: McKinsey Quarterly, “Getting Big Impact from Big Data,” January 2015.