Data analytics is a buzz word: the most valuable companies nowadays use it extensively, it sounds trendy, and chances are you know your company should do more of it. A few months ago (May 2017) The Economist claimed that “the world’s most valuable resource is no longer oil, but data”.
However, it is worth unpacking a little bit what “data analytics” means. The first concept that comes to mind is that of Big Data: petabyte, exabyte of data, circulating incredibly fast, with huge variety (numbers, texts, videos, voice, etc). Yet, the vast majority of companies do not need to worry about the 3 Vs of Big Data (Volume-Velocity-Variety). The data they collect on their customers, their business operation, their products, may come at a low speed, few gigabytes or even megabytes per day, and be very structured. This does not in any way make these data less valuable, and the information contained within is priceless to any business who wishes to run an optimized operation.
For example: we recently worked on a project in which we had to include macro-economic indicators to forecast production. A parameter that we figured out to be predictive of the company’s results was GDP of the country of operation. These numbers are usually available on a quarterly basis: one number every 3 months. Talking about low speed. However, combined with other information, that number improved the accuracy of our forecast in a non-negligible way. The point is that the value of data is not necessarily correlated with speed or volume, but with their descriptive or predictive power of an outcome.
However, companies should also realize that the main two obstacles to leveraging their data are:
- Their own internal realization of the quality of their data. Teranalytics mission is precisely to help bring to light what a gold mine these data often represent.
- Their willingness to accept that analytics can inform and shape their intuition. This might appear paradoxical at first: many business leaders have been able to successfully operate on intuition for years. So why change? Well, simply because the world changes now faster than ever and intuition cannot keep up: customer behavior is highly volatile, and the dimensionality of the problems — in other words the number of parameters that influence the bottom line — is growing exponentially. At this levels of speed and complexity, our brain is over-powered and we start mapping an intuition that no longer represents reality.
Through data analytics, Teranalytics is helping business leaders be better at what they do. This means distilling a complex reality into a few key concepts that are relevant to their business problems. Of course everything is grounded in solid math in the background— machine learning algorithms, statistical models, and optimization algorithms — but that is the keyword: in the background. Our primary goal is to improve your business, using analytics as merely an enabling tool. We are talking about turning your data into actual business decisions, with actual and positive impact on your company, your employees, and your bottom line. The magic of data analytics is not to have a great algorithm; the magic is to apply the right algorithm to the right situation and draw the right conclusions, one company at a time.