Real-time analytics is about detecting and responding to events as they happen to gain competitive advantage. In real-time analytics, an event occurs that requires a decision: What action, if any, should be taken to respond to this event? Simply notifying someone that an event has occurred doesn’t qualify as analytics because it doesn’t provide any decision support — at best it provides “situational awareness”.
Analytics requires relevant and related data, specific to the event that just occurred, and a means to analyze that data. According to Dr. Wolfgang Martin, a former Senior Vice President with the META Group and one of Europe’s top 10 most influential IT consultants, analytics also requires people to do the analysis.
Dr. Martin separates analytics into two groups: those that relate to foreseen problems and those that relate to unforeseen problems. Decisions about foreseen problems can often be automated using business rules. For example, one retailer in the UK monitors the number of customers coming and going from the store and also uses the number or products purchased to determine when to open a new checkout line. While these types of decisions can have an impact on customer satisfaction and sales success, they are also easily copied by competitors and don’t provide any long-term competitive advantage.
Dr. Martin says that the real value in real-time analytics happens when people identify unforeseen problems, opportunities, and solutions and take actions that do create longer-term competitive advantage. Of course, we shouldn’t forget that all of this analysis is being performed in “real time” to quickly arrive at a decision.
It’s important to point out that the decisions being made are operational decisions, which all need to be aligned with the company’s business strategy. Real-time analytics is not a strategic decision making tool, or a substitute for a solid, well-understood business strategy, or reason to deviate from that strategy.
An upcoming post will discuss the technology challenges and solutions for assembling the necessary data in real-time so that decisions can be made in real-time.
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Steve McDonnell
Spotfire Blogging Team
Image Credit: Microsoft Office Clip Art
