Excitement! – big data and advanced analytics have created a lot of it. A rapid evolution of capabilities has changed the world. Big data practices over oversimplified analytics address typical pitfalls and show approaches to advanced analytics which ensure that your business will benefit from it.
Abilities to track and process customer data with affordable infrastructure changes business strategies. Instead of weeks it takes only hours to create stunning analysis, considering every individual customer interaction. Behavior patterns are detected at hand, trends are predicted in almost real time, budgets are planned based on models derived from data. It seems to be so simple and compelling – but comes with significant risks.
Join me in having a look at the risks from an oversimplified view on analytics. Considering 5 simple measures will help you to implement big data practices which ensure that your business will benefit from advanced analytics.
Think about it – it can’t be that easy
Many managers take significant business risks from oversimplifying analytics today. The equation seems to be so straightforward thereby:
Collect data about shopping behavior and needs of my customers, spot this on the offers made to my customers, and identify performance gaps and opportunities. The actions derived from data will make my business flowering by then.
But if this would be that easy, why should we still look for executives?
The answer lies in the details, which are hidden if you take an oversimplified approach. Neither data, nor analytics or actions can be taken away that easily. Each of them brings challenges with it. Those challenges have to be sorted for themselves. Even more important, they have to create a good match to work. Missing out relevant big data practices will make you fail.
Big Data is only the Tip of an Iceberg
It is a brand new world, that the big data community would like to sell to consumers industry. And advanced analytics is the express route into this new world.
The believe in actionable insights from data inspection is compelling. Especially when the battle for new customers and reasonable margins is becoming harder and harder, executives seek desperately for new approaches to secure or grow business. The promise of new insights and actions from big data is a safe bet on the short run.
Often reality strikes back pretty soon. Insights are fuzzy. Actions cannot be derived straight forward. Results are not measurable. The impact stays way beyond expectation. Customer experience suffers from trial and error approaches. External factors like contracts are contrary to plans. Infrastructure and processes are not ready to execute. Huge investments get lost in the shuffle of misses. Disappointment will send out rays.
Lucky ones if proper test scenarios have been setup. Tests can help a lot to understand results early. The point of desperation can be hold off.
Before ending up with depressions, let me assure that big data is of high relevance. Considering the challenges will help to create big data practices which will make advanced analytics your friend.
Sense Making from below Sea Level
Accept that the new possibilities of advanced analytics do not come for free. It needs preparation, it needs planning, it needs operative capabilities. Above of all it needs constant learning.
Learning from failed attempts has lead back to renaming “big data” into “smart data”. It is considering that smart minds are required to foster data collections to extract the valuable pieces.
By then advanced analytics can help a lot to understand how your business is performing today. It can show trends, which will be important for your strategic plans. It helps to gain confidence, to understand commodity and drive efficiency. It simply helps you to make better decision.
Anyhow, advanced analytics will never tell you which decisions you have to make. It also will not add creativity to dumb processes. It is a tool to become better – if you know about the risks.
5 Big Data Practices to avoid Business Risks from Oversimplifying Analytics
Here are five simple measures, which should help you to avoid the pitfalls of analytics and implement proper big data practices:
Start step-by-step. You need to know that it is working. This will work reliably only if you do one thing at a time.
Establish relevant tests, who will bring reliable results. Measurement is important to understand misses. And understanding misses is the basis for learning.
Look at your business processes first. Make sure the analytics will support your business instead of contradicting it. Learning requires acceptance.
Collaborate on strategies and tactics. Fostering advanced analytics will not be a one-time project but a continuous process. Support from people who are advocates for new models can be helpful.
Leave room for creativity. Even though best practices are a good thing, the subject of data driven business management is pretty new. You will have to find your way.
And don’t pretend that your Titanic is unsinkable. Hitting an iceberg without being prepared will always result in serious damage.