There is no doubt that the economic situation experienced throughout the world in the last few years is changing the way companies do business, and that it will continue to do so for many years to come. A recent article by Dhiraj Rajaram, founder of Mu Sigma - an analytics services firm, discusses the future of business analytics and makes 10 predictions of possible trends to come.
He begins with a breakdown of the previous, current and future analytics-based approaches to business:
Business + Technology allows us to simply automate
Math + Business allows us to present more cogent arguments in the boardroom
Math + Technology allows us to anticipate and operate proactively
Math + Business + Technology allows us to execute better
Math + Business + Technology + Behavioral Economics let us develop nudges (cognitive repairs) against human biases.
Prediction 1: Hyper Competition Will Proliferate
To unleash the true potential of analytics, companies will have to move beyond the traditional frontiers of pricing, marketing and risk, using analytics to compete on innovation and relatively obscure areas of the business.
Prediction 2: Companies Will Compete on Consumption of Analytics, Not Creation of Analytics
Context and relevance will be the key enablers for effective consumption of analytics. Organizations will have to focus on various competencies to get consumption of analytics right. The increasing use of intuitive technologies such as visual analytics, interactive dashboards and decision-support simulation tools is indicative of the trend toward consumption of analytical insights.
Prediction 3: Incremental Innovation Will Be Routin, Disruptive Innovation, Rare
Many companies will adopt incremental innovation strategies taking advantage of investments made in data assets.
Prediction 4: New Data Sources Will Emerge
New data providers will emerge focusing on intelligently interpreted data - especially for social media analysis, location data, etc.
Prediction 5: The Role of 'Chief Analytics Office' Will Emerge
The CAO or their effective equivalent will need to override organizational and departmental boundaries to build data-driven competencies wherever information-driven decisions are made. The expertise of professionals from varied disciplines such as technology, applied math, anthropology, behavioral economics and so on would be applied to decision making.
Prediction 6: Analytics Education Will Be Formalized
University of Ottawa, North Carolina State University and DePaul University among others have started offering formal degree programs in analytics. As companies use analytics more and more, they will recognize the need to create and develop talent and will provide support for universities to build formal degree programs in analytics.
Prediction 7: Process Automation Will Take the Forefront
Certain areas of analytics will be "operationalized" enabling analytics at a greater level of detail and scale.
Prediction 8: Open Source Analytics and Analytics-as-a-Service Will Gain Adoption
Open Source analytics platforms will emerge to increase adoption and better mine the wisdom of crowds.
Analytics-as-a-Service will be commonplace and will take different forms, including analytics services providers, analytics focused SaaS companies, existing IT services, system integration and data providers moving into value added analytics services.
Prediction 9: Behavioral Economics Will Gain Traction
While analytics helps us gain insights and make decisions, those decisions can create a positive impact only if human biases are taken into account during implementation. Executives championing data-driven decision making will need to leverage an interdisciplinary approach using business + technology + mathematics + behavioral economics + social anthropology.
Prediction 10: Convergence and Collaboration Will Be the Rule
Cross-industry and cross-domain learning will lead to significant breakthroughs in the development and deployment of analytics solutions.
Analytics is going to play a key role for business in the coming years. Institutionalizing analytics is not a destination or a goal for your company; rather it is a continuous process of internalizing and integrating analytics into the decision-making process. This will be a key differentiator for successful businesses and the route to both incremental and disruptive innovation.
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Adapted from 10 Predictions for Analytic Decision Support by 2015 posted at: www.intelligent-enterprise.informationweek.com