How to make Big Data really useful to Business

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Post on 07-Jul-2015

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Most of business managers would like to make informative business decisions rationally based on data and evidence, and yet corporate meetings are still too often dominated by vision and gut feeling arguments. It is easy to argue that uncertainties of the market landscape are impossible to predict, and one never has enough information at any given time. This is a difficult argument to counter, but there are examples that show data driven decisions are possible and they dramatically improve the results, when used properly.

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<ul><li> 1. How to make Big Data becomereally useful in Business</li></ul> <p> 2. 2013 www.amplifiedanalytics.comMost of business managers would like to makeinformative business decisions rationally basedon data and evidence, and yet corporatemeetings are still too often dominated byvision and gut feeling arguments.It is easy to argue that uncertainties of themarket landscape are impossible topredict, and one never has enoughinformation at any given time. This is a difficultargument to counter, but there are examplesthat show data driven decisions are possibleand they dramatically improve theresults, when used properly. 3. 2013 www.amplifiedanalytics.comConsider commonly used GPS device/service foryour car, that allows you to predict your arrival tothe destinations of your choice with a relativeaccuracy, even when you do not know thedirections in advance.Later versions are even capable to route based oncurrent traffic conditions. Think about this as ananalogy for providing vital business information tosupport management decisions.Understanding what makes GPS so indispensablefor driving vehicles can provide ideas for designof service indispensable for driving businessdecisions. 4. 2013 www.amplifiedanalytics.com1. No reasonably accurate position reading is possiblewithout a minimum of three satellite signals. Inbusiness environment these satellite signals maybe Market, Customer and Company data sources.The intersections of Financial, Operational andCustomer Satisfaction metrics could provide yourproduct, brand or company its current positionreading with relative accuracy.All of these data streams are available either frominternal and/or external sources, but the synthesisprocess of federating the data and its correlationinto objective metrics is not commonly observedin practice. 5. 2013 www.amplifiedanalytics.com2. The positioning is critical as a starting point, butwithout availability of cartography the GPS wouldnot be as useful.From the perspective of business, a combination ofCustomer Intelligence (transactionhistory, relationship history, satisfaction/loyalty dataand utilization analytics), Market (non Customers)and Employees perceptions, form the maps forcharting the course of business decisions. Most ofthis data is available only in unstructured format andtherefore largely ignored by many BI/Big Datainitiatives. 6. 2013 www.amplifiedanalytics.com3. GPS routing algorithms use Operational(speed), Intelligence (traffic conditions) andCartography information to suggest availabledecisions to reach desired destination and topredict likely time of arrival.Use of predictive analytic models is relativelycommon for investment management, bankingand national security. I yet to see them used inproduct management, marketing or salesoperations applications. 7. 2013 www.amplifiedanalytics.comThere are a lot of layers need to be peeled from that onion before anyspecific, functional solution can be crafted for your organization. Theimportant things to remember are: 8. 2013 www.amplifiedanalytics.comYou can buy technology tools and data accesssources, but you cannot buy the solution for yourbusiness.The true solution requires fundamentalunderstanding of your industry, clearcomprehension of your marketplace and intimateknowledge of your company.Not too many business practitioners would publiclyacknowledge their belief in magic, and yet theykeep shopping for the magic bullet. 9. 2013 www.amplifiedanalytics.comPredictive models are just that models. Justlike GPS sometimes can suggest a wrongturn, these models cannot guarantee the bestdecision. However, they can consistentlyimprove quality of management decisions thatwould translate into consistently better profitmargins, earnings per share, or whatever othermetric you want to apply.The idea is not to predict the future, but toestimate probabilities of specific outcomes tobe realized, based on specific actions andconditions. 10. 2013 www.amplifiedanalytics.comResist the temptation to use the models in autopilotmode that is the shortest route to disaster.The most recent example of this unfortunate practicein business is the 2008 financial crisis. The bestexample of such behavior in use of GPS isdescribed Newport-to-Ensenada 2012 race tragedyreport.Regardless of the model quality, the decisionmaker, driver or skipper bear ultimateresponsibility for the decision output. 11. 2013 www.amplifiedanalytics.comThe most valuable insights arehiding near intersection ofmultiple data sources.Use innovative, holistic thinkingto optimize your businessprocesses and practices, insteadone-dimensional approach.</p>