Better Business Strategies for Advanced Analytics

Despite being a business buzzword for more than a decade, Big Data remains a new and intimidating element of business strategy for many executives. Yet, as the rate of digital transformation advances — and as disruptive innovation promises to eviscerate traditional business models — many executives are recognizing that the time is ripe to harness the power of data analytics.

However, utilizing data to guide business decision-making is not exactly intuitive. The following tips should help business leaders shift their strategies toward advanced data analytics for maximum positive impact.

Choose the Right Data

Humans are data generation machines; especially in recent years, as access to the internet (and social media in particular) has grown, human data creation has skyrocketed. According to one study in 2018, a single person generates 1.7 megabytes of data every second, which amounts to about 2.5 quintillion bytes of data every day.

On one hand, more data is better for business. When more data is available, businesses can collect exactly the information they need to guide specific decision-making processes. On the other hand, having so much data available is dangerous; few business leaders understand what data they need to provide certain insights, and many executives are overly tempted to collect as much data as possible. The result tends to be an organization that is utterly inundated with data that is more or less unusable. 

Data is a powerful tool, but as is true of other tools, data must be used properly to be effective. Only the right data will generate the insights business leaders want and need; everything else will be noise and clutter. Leaders should work with their data scientists to understand what type of data is best for business, and then they should work with their IT teams to find creative ways of collecting that data into the future.

Build Better Models

Data is the raw material used in analytics. Inarguably, the quality of data matters — but it is not the only element of analytics that can affect the accuracy and effects of the outcome. In fact, just as important as the data itself are the models used for predicting and optimizing outcomes. 

Once an organization has data, that data must be cleansed, normalized and crunched by algorithms developed and maintained by the data science team — or built by an AI-driven augmented analytics tool. Even after all that work, the outputs of the algorithms will not be particularly useful to business leaders. Perhaps the most critical step in data analytics occurs when outputs are run through models, which further refine the data to identify what information matters in making business decisions.

Unfortunately, few organizations pay close attention to modeling exercises. Even those businesses that avoid the mistake of skipping modeling altogether might fall victim to models that are overly complex — driven by advanced statistical methods — or conversely much too simple. In either case, the models will fail to provide leaders with a clear direction. After committing investment in model design, executives need to identify the models of the lowest complexity that will generate insights to improve performance.

Invest in Company Capability

Many organizations have enjoyed the opportunity to slowly but surely adopt analytics tools and strategies over the past decade or more — but now, businesses must rapidly integrate Big Data or risk being outperformed by data-driven competitors. Yet, rapid change is difficult for many employees to manage; even executives might struggle to trust and adopt processes that make effective use of Big Data.

The key to surviving a transition toward advanced data analytics is investing in one’s existing organization. As tempting as it might be to cut ties with any employees or managers who lack data knowledge or experience, doing so will shatter the corporate culture and hamstring growth and progress. Instead, executives should take advantage of change management strategies to achieve buy-in from all levels of stakeholders. Then, perhaps most importantly, executives should make sure that their data analytics are exceedingly relevant and that simple data tools are available to workers at the front lines.

When it comes to harnessing the power of Big Data, business leaders should recognize that it is now or never. The sooner they understand how to utilize advanced analytics to improve business operations, the better.