The strategies, data analytics and business intelligence tools that help use and decipher our massive store of facts were part of a fascinating webcast from the MIT Sloan Management Review. A myth that this data stream can be adequately monitored and tamed is as potent as the reality that data is transforming companies. Watch the video and read “Analytics: The New Path to Value.” The magazine surveyed executives about the state of analytics use and found a growing gap between industry leaders who are using data to advance and laggards not yet capitalizing.A summary recap of the hour-long panel discussion can be read online with insights from Erik Brynjolfsson, director of the MIT Center for Digital Business, and Stephen Baker, author of “The Numerati.” Specific cases of using business intelligence to mine cause/effect actions at leading companies such as Google, Amazon and some smaller organizations such as school districts demonstrate how data needs to be converted to words and questions then back again, Baker noted. A new way of working means asking more and better questions of your data is critical, then finding non-obvious relationships and ways of making constant, iterative changes.
In one case, Brynjolfsson tapped into Google Insights data with details on the more than 100 billion public searches done on the Internet monthly. Using them, he and students were able to predict trends in the U.S. housing market. People tend to search for mortgages, brokers and real estate agents before shopping for a home and that search trail can indicate price and sale activity. The results “outpredicted” the National Association of Realtors and other experts, he said.
“They had much more sophisticated models but we were able to outpredict them just using a data set that’s publicly-available,” he adds. Instead of experimentation being a rare, expensive business practice the model of continuous sampling and improvement is changing the way we work.
“As data floods into the company, as we go from an information desert to an information jungle, the bottleneck at the tops of organizations gets more and more constraining,” he said. That should lead to distributed decision-making, crowdsourcing and reducing the intuition, gut feelings and conventional wisdom.
Instead of formulating the one perfect question to ask your data, think of many different aspects that you can consistently test and question, Baker suggests. In some ways every company has to think like a retailer of adjusting browsers, offers, A/B testing prices or services to find the optimal mix. A willingness to take changes, and act quickly will replace the management that is paralyzed by analysis or waiting to see which way the winds blow.
Getting more and better information, in real-time, with collaborative tools that offer a unified view of the same facts means that meetings are not going to be discussions and hypotheticals. The future will be data-based with analytics showing what happens and why — predicting future trends and actions instead of using “a rear-view mirror” to see what just happened. Companies have more data than they know what to do with – what they might NOT have yet is the culture of testing, experimentation and rapid response.
Spotfire Blogging Team
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