Putting big data and advanced analytics to work

I came across this article which I think is really relevant to any business that has accumulated stockpiles of data about clients, and its operations. What to do with this and how it can be put to good use to identify opportunities.

Below are the key points of the interview 

• Big data and analytics actually have been receiving attention for a few years, but the reason is changing. A few years ago, I thought the question was “We have all this data. Surely there’s something we can do with it.” Now the question is “I see my competitors exploiting this and I feel I’m getting behind.” And in fact, the people who say this are right.

•  I get asked, “Who’s big data for?” And my answer is it’s for just about everybody. There are going to be data-based companies: Amazon, Google, Bloomberg. They’re great companies, and they have a lot of opportunity. But just because you’re not going to be a data company doesn’t mean you can’t exploit data analytics. And the key is to focus on the big decisions for which if you had better data, if you had better predictive ability, if you had a better ability to optimize, you’d make more money.

•  So where have I been seeing data analytics recently? Well, the answer is in many places. Let me focus first on efforts to do better things with your customers. An airline optimizing what price it charges on each flight for any day of the week. A bank figuring out how to best do its customer care across the four or five channels that it has. Allowing customers to be able to ask questions and get better answers and to direct them. All of that is on the customer side of things. And then in operations, think of an airline or a railway scheduling its crews. Think of a retailer optimizing its supply chain for how much inventory to hold versus “What do I pay for my transportation costs?” All of that lends itself to big data—the need to model—but frontline managers have to be able to use it.

•  So what’s the formula or what’s the key success factor for exploiting data analytics? From our work—and we’ve probably talked to 100 people—it always comes down to three things: data, models, transformation. Data is the creative use of internal and external data to give you a broader view on what is happening to your operations or your customer. Modeling is all about using that data to get workable models that can either help you predict better or allow you to optimize better in terms of your business. And the third success factor is about transforming the company to take advantage of that data in models. This is all about simple tools for managers—doubling down on the training for managers so they understand, have confidence in, and can use the tools. Transforming your company to take advantage of data and analytics is the hard part, OK?

•  The bi-modal athlete: The question then is how to build what I’m going to call the “bimodal athlete.” And what I mean by this is, imagine that we go to a retailer and meet its buyers, or to a technology company or consumer company and meet the people that make the pricing decisions, or to somebody doing scheduling. Here you need people that have a sense of the business, and they need to be comfortable with using the data analytics. If you’re good at data analytics but you don’t have this feel for the business, you’ll make naïve decisions. If you’re comfortable with the feel of the business but you never use analytics, you’re just leaving a lot of money on the table that your competitors are going to be able to exploit. So the challenge is how to build that bimodal athlete and how to get the technical talent.

Putting big data and advanced analytics to work