Analytics is becoming a competitive edge for organizations. Once a “nice-to-have,” applying analytics–and especially predictive business analytics–is becoming mission-critical.
Business analytics is a skill that is gaining mainstream value due to the increasingly thinner margin for decision error. There is a requirement to gain insights, foresight, and inferences from the treasure chest of raw transactional data (both internal and external) that many organizations now store (and will continue to store) in a digital format. Without interpretation, numerical data is simply just numbers.
In my co-authored book with Lawrence S. Maisel, Predictive Business Analytics (which is available on Amazon), this topic is addressed with case studies, core principles, and inspiration.
The application of analytics was once the domain of “quants” and statistical geeks developing models in their cubicles. However, today it is becoming widely adopted for organizations with the conviction that senior executives will realize and utilize its potential value.
Today many businesspeople do not really know what predictive modeling, forecasting, design of experiments, or mathematical optimization mean or do. However, over the next 10 years the use of these powerful techniques will become standard. This is no different from applying financial analysis and computers for businesses that want to thrive and survive in a highly competitive and regulated marketplace. Executives, managers, and employees who do not understand, interpret, and leverage these assets will be challenged to survive.
Case studies, including some in this book, demonstrate that, for a company to use predictive business analytics effectively, it must commit to a sustained and rigorous process in order to achieve meaningful results. This includes the ability to establish:
a team of individuals with complementary skills and competencies;
a repeatable set of practices, functional data and tools; and
a management process to review its results and forge its decision making by leveraging these results and insights.
Together, these are used to continuously analyze the right business and cost drivers and measures that have strong cause-and-effect relationships to gain insight to better manage the business and to improve decision making.
One can make the case that increasingly the primary source of attaining a competitive advantage will be an organization’s competence in mastering all flavors of analytics. If your management team is analytics-impaired, then your organization is at risk. Predictive business analytics is arguably the next wave for organizations to successfully compete. This will result not only from being able to predict outcomes but also to reach higher to optimize the use of their resources, assets and trading partners. It may be that the ultimate sustainable business strategy is to foster analytical competency and eventually mastery of analytics among an organization’s work force.
