The volume of data from social media, consumer online behavior and the cloud is streaming into companies at an ever-increasing rate.
And firms are realizing that it’s possible for them to use business analytics to gain the same types of actionable insight from big data that analytic rock stars like Google, Amazon and Target have been gathering for years.
But how does a firm figure out how to gain market advantage by tapping the real value of big data? And, at the same time, how does it avoid getting snagged by all the “noise,” the irrelevant data that flows in with the good stuff?
“Progressive firms use big data to narrow their decision set, not expect an answer,” notes Paul Magone, consultant and Forbes contributor. “They have figure[d] out how to map the real-time information against historical information to offer predictive possibilities. The modern crystal ball is thus unveiled and companies await the next prediction.”
He goes on to note six questions that companies need to ask to get real business insight from big data.
1. Determine the real business question: What issue will you clarify to truly move your business forward? Companies must ensure that they understand and focus on the business impact of analytical outcomes, according to research from Gartner Inc. The focus on material and measurable decisions is critical.
Decisions must mean something significant to the business, and the net benefits of the investments must be measured so that there is a clear relationship between the data, analysis and resulting decisions and outcomes. Ask business leadership to define the most valuable processes, and focus analytics on improving decisions around those processes, Gartner advises.
2. Understand that you or your organization may have bias toward the data: As an individual, will you take an analytic or creative view of the results? Will you and the stakeholders use the results discovered to inform or compel action in the organization? A major barrier to success in exploiting big data with analytics to bolster company performance is that the long-standing existence of silos of information across organizations has created an inherent lack of confidence in the accuracy and usefulness of data, Gartner notes in separate research.
To overcome these issues, Gartner recommends that firms create stakeholder analysis to identify cultural roadblocks to data sharing and prepare communications to overcome these obstacles. Companies like Proctor & Gamble, for example, have found success at advocating open innovation efforts that allow customers to participate directly in product development, which requires and inspires cross-team data sharing.
3. Determine the best data to answer the essential question you are probing: Is it data at rest, data in motion or data in use? Is the data trustworthy? Is the data volatile and incomplete? Finding the best data to answer the essential business questions first requires finding the right tools and methods to analyze the information quickly enough to impact business decisions. In a recent survey, Aberdeen finds that 28% of organizations need to provide information about business events to managers within one hour of when they occur for them to make timely management decisions.
In a separate, unpublished survey, Aberdeen finds that 64% of business managers have seen their decision windows shrink in the last 12 months. Aberdeen notes that 44% of the organizations that use visual and interactive analytics tools are always able to provide business managers with the information they need within the timeframes they require. Only 17% of the companies that depend on traditional BI tools are able to consistently get information into the hands of decision makers in the time required.
4. What are the best methods available for you to collect the data? Be sure to factor in social media tools, mobility and localization. Rather than trying to collect everything, seek just enough to get clear answers.
5. What’s the best way for you to harvest the insights? Beyond analysis this requires impartial investigation that goes beyond surface level inspection. Ensure the data is put in context against business issues that matter.
6. How can you make the best recommendations for the business? Determine the recommendations based on the needs of the stakeholders. Take note if the recommendations mesh with your long-term strategy or short-term tactics.
Next Steps: See how Spotfire version 4.5 empowers users to discover actionable insights hidden in big data and unstructured information in our upcoming webcast, “What’s New with Spotfire 4.5,” taking place Thursday, May 31 at 1 p.m. Eastern.