By Steve Farr of TIBCO Software
There’s no excuse for business decisions not being data—driven in the 21st Century, but just analysing the past means you’ll always be one step behind.
Making good decisions is at the heart of a successful business, so why don’t we use the knowledge in the business to make these informed choices at every opportunity? All our other daily life decisions are based on experience: as children it’s how we learn to walk, balance and talk. We have to make decisions that fail, as well as succeed, in order to get better at making them. This feedback loop is critical as it sharpens our understanding and allows us to make better decisions faster when next presented with a similar situation.
Likewise, data is the key to making good decisions in the business world. It tells us the state of the business now, how its environment is changing, as well as holding the knowledge of all the successes and failures that have gone before.
There are two types of data moving through your organisation, the first is “data at rest”, historical documents that represent everything that has happened in the past. The other is “data in motion”, that which is happening right now as you read this: sales transactions, customer complaints, data from plants, machinery or partners sending electronic information.
Business Intelligence has always been seen as the tool of choice, generating reports to give access to information on key areas such as sales or manufacturing performance. The problem with reports is they are static, inflexible, and only ever answer the questions they were designed to report on. If you want to discover why something has happened or to see if there are unexplained trends, then you will probably need a trip to IT, and to wait two weeks for a new report to be configured and generated.
BI’s biggest problem is that it only deals with “data at rest”, the past essentially. Whereas today’s organisations are constantly moving with data changing ‘events’ taking place all day, every day and in every department. But traditional BI can play no role in the decisions linked to those events, because it doesn’t see them until the event has completed and becomes data at rest.
Analysing the past to identify trends is important, but on its own and tied to a fixed report limits your ability to take effective action. You have to come to decision making with an open mind, to explore the data and see what you can discover that you didn’t know before, whether on your own or with colleagues in a meeting. There is nothing worse than having to hold-off making a team decision for a week whilst a new report is built or more detailed data pulled for exploration.
Visualisation and advanced analytics tools help make decisions faster and enable meetings where data can be explored at depth. In this way that can deliver insight through real-time manipulation of an analysis and give meetings real momentum. But this is only half of the story, what do we do with the data in motion and decisions that must be made in a split second?
Finding the unknown for competitive advantage and predicting the future based on what is happening in the business now, is the nirvana that everybody is longing to reach. This is where the value of data in motion becomes clear.
Predictive analytics allows users to conduct analysis based on all data (at rest and in motion) to model the future. It is not necessary to have a mathematics degree to work this kind of analysis, visualisation tools remove the complexity allowing users to focus on decisions, asking questions and exploring data.
This same statistical analysis and the engines that support this new generation of data visualisation tools can be used in real-time to capture events and automate background decisions, for any aspect of an organisation. For example, a phone operator may know from data at rest, that when a customer is less than three months old and receives four dropped calls in a day, there is a high chance they will seek a new provider. Predictive analytics can use this model to automate a decision when a call is dropped to send customers an apology or free minutes instantly, hopefully minimising their dissatisfaction.
Becoming an event-enabled enterprise that uses predictive analytics to learn and inform real-time decision-making, makes your business smarter. For many business leaders, their business is the child from the beginning of this article that they have nurtured. Maybe now it’s time to move from a child that can balance and walk, to one that can run and play the complex game of business?