The physicist Niels Bohr once famously said, “Predictions are hard to make, especially about the future.” But in today’s business world, it’s getting easier and easier thanks to big data analytics. The insights that big data analytics provides can be extremely powerful—they might even help you win an election. The Obama campaign used data analytics as a strategic tool in the 2008 election, which was so effective he “hired an analytics department five times” at large for the 2012 campaign.
The goal of data analytics is to “measure everything” (think of Google’s infamous practice of analyzing viewers’ every mouse-click) and use the insights generated to speed up business decision-making. Utilizing recent advances in technology, the process has become turbo-charged and can inform split-second decisions that are made and adjusted in real-time—these aren’t just clunky old data warehouses anymore.
Companies such as Wal-Mart and FedEx have successfully translated the massive amounts of customer data they collect into valuable business intelligence. Wal-Mart adjusts inventories and pricing based on data analysis, and FedEx optimizes delivery routes using data mining. With readily available software tools and easy access to cheap servers, data mining is now feasible and affordable for smaller companies too. One example is the company SecureAlert that tracks people on parole and probation, and whose sophisticated data analysis can now “predict when a crime is about to go down.”
But you’d better do data analytics right, or maybe you shouldn’t do it at all. There is no value in simply collecting massive amounts of data; a question should be defined that needs to be answered. And when insights do come, they need to be simplified and made “road-ready” for use in the real world by real people. A number of companies have already discovered how to use big analytics effectively and companies hoping to keep relevant need to start considering how to implement similar strategies.
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