Jeff Keyes, VP of Product at Plutora, explains some of the benefits to using advanced analytics and how it can help CIOs and the C-suite to make smarter, more tailored decisions to ensure business success.
Today’s digital world means that CIOs are under greater pressure than ever before to use technology to increase their organisation’s profits. Particularly in the early stages of a new business, CIOs and their fellow senior leaders can analyse the actions taken by other successful (and not so successful) businesses to understand which decisions paid off and which didn’t. Otherwise, decisions must be made purely on instinct.
However, as a business matures, copying other competitors prevents you from standing out, and choices made based on instinct alone can lead to mistakes. By this stage, the company should have generated enough data that advanced analytics can help CIOs and the C-suite to make smarter, more tailored decisions.
Advanced analytics 101
Advanced analytics is the use of tools and techniques along with business data to generate insights into what decisions should be made. One of its key benefits is monitoring certain activities and predicting future events based on these. Advanced analytics is particularly useful when leaders are deciding on a new business activity as it can help teams understand the impact this activity would have on the business.
For example, you can see this in action when you use online shopping. When you click on various items on a website, there will often be product suggestions lower down the screen that highlight other items that you might be interested in. It does this based on what you have recently viewed and it uses advanced analytics to predict what else you might be interested in, thus increasing the chances of you buying something. This is just one way in which advanced analytics helps businesses market their products. These websites take your search data to determine what other content can be promoted to you that might convince you to purchase.
The business benefit
Every business offering a product or service can make use of advanced analytics. Some of the main benefits include:
- More informed choices – Advanced analytics generates data based on logic and reliable information. It also uses past and current data to help CIOs make smarter decisions for the business’ future.
- Better business knowledge – Advanced analytics helps CIOs to recognise the factors that improve their business as well as those that are negligible. Strong reporting and analytics can also recommend which parts of the business to focus on.
- Risk management – Businesses can use advanced analytics to highlight risk based on existing data. Understanding the metrics that affect the risk can help leadership teams to design a business model that reduces it. Additionally, advanced analytics helps with governance, which mitigates regulatory and compliance risk.
- Developing clearer strategies – CIOs must understand their business based on data as they generate new ideas to improve. Advanced analytics does the heavy lifting, giving senior leaders more time to focus on the strategy to drive the business forward.
Where analytics can help
To start using advanced analytics and reap their benefits, it is necessary to understand the principle ways in which they can be used, leveraging multiple techniques that provide benefits in different use cases. These techniques can include Machine Learning, pattern matching and sentiment analysis, among others. In terms of the use cases, here are four of the most popular:
- Data Mining
Data used by businesses varies widely and only some of it is genuinely useful. To improve their business, CIOs should make use of the most relevant data that’s vital to their organisation. Data mining is the process of retrieving useful data from raw data, primarily through patterns and relationships. Data mining can extract different kinds of datasets such as transactional data, streaming data, heterogeneous data, etc. Once this data is extracted, it can be used for deeper analysis to understand customers better and build more effective business strategies.
- Predictive analysis
Predictive analysis is another popular use for advanced analytics whereby businesses can accurately predict future trends. Using Machine Learning algorithms, this technique identifies relationships and patterns by analysing large amounts of past and present data, ultimately producing a prediction model.
The more data the model has access to, the more accurate the prediction will be – however, it will never be 100% accurate. There are multiple factors that can affect businesses that the model might not take into account, such as natural disasters, changes in demand for a service, etc. Predictive analysis can’t tell what exactly will happen in the future, but CIOs and senior leaders can get a good idea of what might happen if they make certain decisions.
- Prescriptive analysis
The next step up from predictive analytics is prescriptive analysis. This technique not only considers what can happen in the future, but then suggests the best way to implement a business decision. When a business decides on a particular path, there is often more than one possible way to go down it. Prescriptive analysis uses current and past data to calculate different possible outcomes before the final decision is made. It then recommends the best course for implementing a business decision based on what will meet the needs of the business most.
- Big Data analytics
Finally, there’s Big Data analytics. Another popular method, this involves taking a large volume of data and examining it to highlight the pieces that could be most beneficial. Big Data can be used on both structured and unstructured data and it can provide the greatest benefits when the data generated isn’t in a proper format. For businesses that regularly produce large amounts of data and leaders often have to make a range of business decisions, Big Data analytics is perfect. It will help businesses increase revenues, decrease strategy cost and keep up with competitors.
The technology industry is widely embracing advanced analytics – particularly as many businesses may have struggled to stay afloat in the past 12 months – and are looking for new ways to stand out from the competition. Customers are the most important piece in the puzzle and advanced analytics is helping more businesses to meet their demands while avoiding unnecessary decisions that put profits at risk.Click below to share this article