‘Data is the new oil’ is a maxim that’s rolled out so often by data analysts these days, it has become cliché. The phrase was first coined by Clive Humby, architect of the Tesco Clubcard scheme, addressing delegates at the ANA Senior Marketers’ Summit in 2006. It’s hard to believe that over a decade has passed since this well-worn statement first entered circulation.
However, as an analogy it doesn’t quite resonate with me. Oil is a rare commodity that is in short supply. Prospectors have to go searching for it, and oil is rarely found in a location that allows easy access.
Data, on the other hand, is in abundant supply. Organisations often have more data than they know what to do with. There’s no need to go searching for it because data these days is all around us, generated in its zettabytes as a by-product of everyday business activity. Access is easy, too. Just log on to your social media account or open your Sales tracker.
Data, then, is not much like oil in many ways. However, the two DO share one characteristic that is extremely pertinent. It is this characteristic which is the reason that Clive Humby’s claim that ‘Data is the new oil’ is still in use today.
Crude oil is useless. It is only in its refined state, when it has been transformed into petroleum, chemicals, plastic, etc. that it becomes commercially valuable. Similarly, raw data is of little use to businesses. Facts and figures, taken out of context, are meaningless. It is only once data has been refined and transformed into a connected, contextual ecosystem of business intelligence that it yields its full value.
So it is not the data itself that is valuable, though it has great potential; it is the refining process that gives data its value. The companies who are the best at refining and transforming their raw data into meaningful analytics are the ones who are deriving the greatest benefit from this abundant resource.
Just as oil refineries turn natural resources into profit-generating commodities, Business Intelligence and Analytics packages can transform humble data into insights that, if acted upon astutely, can make (or save) organisations a lot of money.
However, if the success of a business in leveraging its data can be measured in the size and quality of its refinery, then the New Year comes with a warning. There is more data coming our way than at any time before in Human history.
900 Exabytes* of new information was generated in 2016. This is more than was generated in the previous 2,000 years combined. And predictions are that this rate of generation will grow by a factor of 10 over the next 5 years.
* That’s a big number, so let’s put it into context. Every minute, 200 million e-mails are sent, 300,000 Tweets are made and more than 70 hours of video footage is uploaded to YouTube. Every minute! Source: VCloud News
Translation: We will be inundated by data in 2017. Companies that successfully transform and leverage their data to drive business decisions will be better informed, better prepared and better rewarded for their efforts in 2017 than those who do not.
Data is the new oil? Perhaps, in 2006. But in 2017, data stands alone as a unique commodity, the sheer scale of which we’ve never seen before. Isn’t it time your business invested in its data refining processes?