Recently, there has been a flurry of activity around data-driven decision making. The McKinsey Global Institute’s recently released study, "Big Data: The next frontier for innovation, competition, and productivity," states that “Analyzing large data sets—so called big data—will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus… For example, a retailer using big data to the full could increase its operating margin by more than 60 percent.” The Social Science Research Network made a similar discovery in its report, “Strength in Numbers: How Does Data-Driven Decisionmaking Affect Firm Performance?” stating that “Using detailed survey data on the business practices and information technology investments of 179 large publicly traded firms, we find that firms that adopt Data-Driven Decisionmaking have output and productivity that is 5-6% higher than what would be expected given their other investments and information technology usage.”
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