The explosion of data that is taxing storage systems is also driving the requirement for advanced business analytics. With all that data being created, collected and stored with our IT infrastructures, business leaders want the capability to be able to harvest insights that will help them make better decisions. While information overload was once a barrier to good decision making, today’s technology and analytics expertise make it a real benefit.
Business leaders are yearning for deeper knowledge and insights on all aspects of their business and they know that the information they need is available within all the data flowing through the company IT systems. The growth of social conversations and content across the many online channels is providing business leaders with a never ending stream of incoming data. The challenge is to turn all that data into insights and then develop strategies/actions based on those insights.
Advanced analytics solutions can help business leaders adopt a proactive versus reactive strategy, enabling them to predict future behaviors and events before they occur. Insights generated can help business leaders optimize individual business decisions, processes and entire business models, as well as manage risk and fraud, with the goal of improving the development and delivery of products and services. Analytic applications are also being used to help marketing leaders understand customer buying preferences. Advanced analytics also involves new technologies to search unstructured content and other search enhancements.
As with any advanced technology, its not just the analytic tools themselves that are important, advanced analytics can require new processes and new skills. In fact, businesses will need help understanding how to insert analytics into all business processes. Every process also has the potential for the application of analytics to improve decisions or to selectively adjust the process itself to handle out of normal situations.
Determining the appropriate combination of analytical techniques and the different aspects of the process they can support, will become a critical domain skill for business process managers and developers across every organization.
Advanced Analytics encompasses more than just Business Intelligence. Business intelligence mainly provides us historical analysis, but also increasingly incorporates powerful ways of analyzing what has already happened. We can increase the scope of the information that is analyzed and we can reduce delays between the data creation and its analysis, but at heart this is a look backwards.
Advanced Analytics solutions help us look into the future, predicting what can or will happen. We don't want to only spot past patterns of suspicious activity that might indicate fraud had already occurred. Think of the additional value if we could look at an action as it is taking place, predict the results, spot the fraud that will ensue and be able to stop it before it materializes. What if we could predict the likely sales in a store from remaining inventory for various possible purchases at this moment, and offer inducements to a customer to pick the product right now that maximizes likely total revenue?
So it is not surprising that leading companies are interested in using Advanced Analytic solutions to give them a competitive advantage. In 2011, I expect to see increased interest in advanced analytic capabilities that can identify, analyze and describe patterns within all the information “noise”, giving business leaders important predictive insights they can use for making better decisions. In 2011 look for advancements in streaming technologies, mathematical algorithms and predictive modeling as applied to business analytic solutions.
Quotes from the Marketplace
Analysts have forecasted that the business analytics market will continue to grow at a good pace over the next ten years. Here are some quotes from the buzz in the marketplace around the analytics topic.
“IDC forecasts the business analytics market to grow at a compound annual growth rate (CAGR) of 7.0% over the 2009-2014 forecast period with even greater growth expected over the next ten years.” – IDC (Link)
“Predictive analytics allows us to leverage unsolicited and unbiased customer feedback and strategically improve our business. We now can also monitor competitor and industry websites, including blogs and news feeds, and other publicly available textual information to maintain a current view and better understand how the public perceives our competition – Nino Ninov, vice president of strategic research and analysis at Rosetta Stone (link)
“Predictive analytics software allows us to uncover greater insight into our membership and identify areas of opportunity to increase our satisfaction levels. Increasing awareness of our products and services, and also creating new offerings that meet our members' changing needs and behaviors has lead to better service and member understanding, and more strategic decision making.“ – Alan Payne, manager of member research and development at Navy Federal Credit Union (link)
“Top-performing companies are three times more likely than lower performers to be sophisticated users of analytics, and are two times more likely to say that their analytics use is a competitive differentiator.“ – MIT Sloan Management Review (link)
“As the benefits of business analytics become better known, especially among executives, the demand for a wider range of solutions and services will create new opportunities and drive the market to new heights.” – IDC (Link)
“The new step is to provide simulation, prediction, optimization and other analytics, not simply information, to empower even more decision flexibility at the time and place of every business process action. The new step looks into the future, predicting what can or will happen.” – Gartner (link)
“Success with business analytics requires more than the data and algorithms. It requires a company culture committed to using information for breakthrough ideas and operations.“ – IBM Website (link)
Drivers of this Trend:
- Explosion of raw data
- CIOs want to enable smarter decisions within the enterprise.
- There is substantial value achieved by making smart data-driven decisions.
- Continued advances in analytics algorithms, modeling, & capabilities
- Increased need for integration and combination of data
Challenges as we Adopt Analyitics Solutions:
- Dealing with complex metadata: Unstructured, semi Structured, usage patterns
- Data comes from many different sources (web, search, video, mobile, and social conversations).
- Security, performance, scalability
- Analytic tools tend to be too complex, requiring specialized resources.
- Analytics services need to be designed for business users.
- Analytics need to be inserted into all business processes
- Training may be required for business process managers and developers
- The ability to pull value from data can lead to competitive differentiation.
- How can business leaders swiftly put predictive models in action, so they deliver value rather than simply being an intellectual exercise?
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