At the NASSCOM summit on big data, where I presented on how analytics is driving operational excellence, I noticed that there was unanimous acceptance within the audience that big data and analytics are transforming the face of operations across industries. This is a welcome development; however, organizations must adopt the right approach to overcome key challenges and generate ROI in a rapidly evolving landscape.
The democratization of analytics—that is, analytics accessible across levels—has been driven by three major shifts over the past few years:
- Costs associated with processing, storage, and connectivity have come down dramatically
- The advent of social, mobility, cloud, and the Internet of Things has led to an explosion of data, with the total volume of data that is being captured and stored by businesses doubling every 1.2 years∗
- Rapid growth and penetration of open-source technologies in all fields has resulted in technological leaps across industries
Analytics: No longer just nice to have
Today's competitive environment is not characterized by the big eating the small but the fast eating the slow. To remain relevant, companies need to continuously innovate and invest in foundational capabilities like analytics. Forward-looking companies have already started incorporating big data analytics to improve operational efficiency and effectiveness, and 89% of business leaders believe big data will revolutionize business operations in the same way the Internet did**. Indeed, the global big data market is projected reach $122 billion in revenue by 2025***.
Adopting the right analytics approach
Analytics is no longer just hype. Companies have real needs but also frustrations as many have yet to adopt the right approach.
If you look at the spectrum of analytics providers, there are traditional technology vendors and systems integrators that see analytics through a technology lens. They promise to deliver business insight with increased hardware and technology stacks. This approach has not yet generated an ROI that reflects the required investment or expected improvement in business performance.
Pure-play analytics consultancies sit at the other end of the spectrum. They exploit the belief that there is a scarcity of analytics talent in the market, but what this tells the client is that their business problem is really just a math problem awaiting the proper talent. This is too simplistic and misses the point that business problems are never one dimensional. Organizations don't have math problems; they have complex business problems that require an integrated, multidimensional approach. The solution does not need technology, data science, or process alone, but a combination of all of these elements.
There needs to be a rich loop that re-enforces interaction between technology, analytics, and domain expertise to industrialize analytically informed processes. Organizations need solutions that reimagine process operations with analytics and technology to deliver a discontinuous leap forward in business performance.
Addressing analytics challenges
Data science is the convergence of technology, analytics, and domain expertise, yet data scientists, the species created by this union, are difficult to find or almost non-existent. This poses huge challenges as we industrialize analytics. There are focused efforts to take away the complexity in data science with more federated approaches (e.g., data lakes, fog) and automation.
Organizations across industries struggle with data governance. Data of bad or poor quality costs US businesses $600 billion per year****, and delays or hinders decision making. Indeed, CXOs have started to question the value of analytics insights when they don't trust the underlying data. This problem can no longer be solved with standalone technology. The complexity of today's data needs a comprehensive solution that addresses business processes and technology.
While there are challenges with analytics, organizations that adopt the right approach to embedding big data technology with robust governance and a combination of process, technology,and experience are seeing huge benefits in their day-to-day operations.