I can’t help but laugh a little when I hear – as I so often do these days – advanced analytics referred to as a “hot new technology” or an “emerging new trend.” I’ve personally been involved in the data analytics space in some form or fashion for more than two decades, and the development and application of advanced analytics predates my career by at least that long. So, let’s put that notion to bed right off the bat. Advanced analytics is not a new concept. Smart companies have been leveraging analytics to facilitate better decision making for decades.
And yet, there’s no denying it: Analytics is hotter than it’s ever been. More companies are investing in analytics technology that ever before. More business decisions are driven by analytics than ever before. More business and IT professionals are pursuing careers grounded in analytics than ever before. According to the latest research from Gartner, Inc., “by 2018, more than half of large organizations globally will compete using advanced analytics and proprietary algorithms, causing the disruption of entire industries .” Gartner also predicts that by 2020, “predictive and prescriptive analytics will attract 40 percent of enterprises’ net new investment in business intelligence and analytics*.” Staggering numbers, indeed.
So, what’s driving this flurry of renewed interest and expanded investment in a technology category that’s been around for decades? How is it that what’s old is suddenly new again? As with any industry shift of this magnitude, there’s no single cause, but rather a number of factors coming together to drive change. Let’s take a look at what I believe to be the four most critical.
Sophisticated New Users
For many years, advanced analytics and the technologies that powered it (more on the technology in a moment) was the singular domain of a select few – namely, those with Ph.D.’s in statistics or other advanced mathematical fields. Over time, these select few became collectively known as data scientists, and the short supply in which they existed (and still exist) inherently limited the extent to which organizations could invest in and apply advanced analytics to solve business problems. It was pretty simple, in fact. No data scientist, no analytics.
Today, that’s changing, and in rapid fashion. A growing class of non-technical personnel embedded directly in the lines of business – now commonly referred to as citizen data scientists – is emerging as the new face of analytics initiatives. They may not hold Ph.D.’s, but this nonetheless intelligent group understands that leveraging analytics to better understand data and predict future trends is central to the short- and long-term success of the businesses they support. And you better believe they want to be part of the team driving that success. Put it together and you have an exponentially larger pool of professionals eager to drive analytics into their businesses.
Powerful New Technology
An expanded pool of analytics professionals is only impactful to the extent that the technology is there for them to leverage. What you’re seeing today and what’s contributing greatly to the explosion of investment in analytics is the availability of powerful new technology that makes its faster, easier, and more affordable to run analytic processes. At the risk of diminishing the importance of processing power and price point, it’s the ease of use factor that’s really changing the game and helping take analytics to new heights. If the new wave of professionals driving analytics initiatives comes from non-technical backgrounds, then the next-generation technologies they leverage must be built accordingly. We’re seeing more and more of that with each new wave of technology. Vendors large and small are focusing their efforts on delivering features and functionality built specifically for the citizen data scientist. (My colleague David Sweenor outlined some of the most critical of those features in his column last month.) The formula here is no great secret. A larger pool of users with access to a larger pool of technology makes for a marketplace on this rise.
Exciting New Data Types and Expanded Connectivity
The explosion in the volume of data organizations and their customers produce is well documented. But what’s fueling increased interest and investment in analytics isn’t so much the volume of new data we’re creating as it is the variety of new data types. And taking it a step further, it’s not just the fact that a host of new data types exist. In fact, some of these so-called new data types (IoT sensor data, for example), have existed for years.
What’s really changed is the feasibility of capturing, integrating and analyzing all of these non-traditional data types. What was once simply not feasible (either on account of cost or technology) is now well within our reach. Today, modern technology makes it both possible and affordable to connect to and analyze just about any data type imaginable. Consequentially, there’s a world of potential new learnings – learning about customers, behaviors, trends, marketplaces, you name it – available to organizations that just weren’t available in years past.
New Economic Advantage
A new and motivated pool of users is important. So is powerful new technology, and a world of new data types and expanded data connectivity. But none of it would matter, and none of the new investments being made across the analytics landscape would be made, if all roads involved didn’t lead to the bottom line. And in the case of the analytics revolution, all roads do indeed lead to the bottom line. More than anything else, analytics is hotter than ever because now more than ever, smartly applied analytics leads to economic and competitive advantages that can and do dramatically impact the bottom line for companies of all shapes and sizes. In today’s 24/7 world of digital business, the ability of companies to compete hinges on using data to predict the behavior of customers. You just can’t do that without advanced analytics. And when you look at it that way, it doesn’t take a Ph.D. in statistics to understand why analytics is hotter than ever.
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