In the Analytics world a lot of our focus recently has been around the use of predictive analytics – tools that help companies understand what is going to happen with their business rather than what has happened. To quote Wayne Gretzky– companies are trying to skate where the puck is going not where it’s been.
It’s an interesting idea; we spend a lot of time looking at what has happened, what is happening through access to real-time data, but what about what is going to happen?
The fact is, using predictive tools in our personal lives is turning us all into data scientists. SAP, through a partnership with the NFL is enabling fantasy football. We have released the player comparison tool which uses player stats and analytics (including predictive) to give fantasy football players an edge.
We are also doing the same with the NBA and in other sports as well. Fantasy Leagues are just one example of using predictive tools in our personal lives. Predicting weather, traffic or flagging suspicious activity on your credit card are other examples. Just like the rise of BYOD, it’s our consumer habits and personal lives creeping into our business habits that’s driving change.
Coming back to the business world, today we released the results of a survey conducted in the UK and here in the US around the use of predictive analytics in business. In both countries, as is likely the case for a number of countries, businesses are awash in data and while they want to understand it, they lack the tools.
In both countries however, the study shows attitudes are changing. Organizations are slowly starting to realize that being able to predict trends in their business offers a competitive advantage. In fact, 85 per cent of those asked agree that predictive analytics has had a positive impact on their businesses, and 77 per cent believe that they have gained specific competitive advantage through the use of predictive analytics.
The tide of investment in predictive tools is turning. More than 60 percent of those surveyed agreed predictive analytics is currently an investment priority for their organization, while almost 80 percent think predictive analytics will be a crucial investment within the next five years.
What we can conclude from the survey is data, and the need for companies to address the exponential increase in data, is now at the center of corporate strategy. Data, and what understanding it can do for a company’s bottom line, is now moving beyond the realm of the Data Scientist to the executive office and to the business user.
So what’s next? In the UK the results pointed to a talent shortage, a lack of people who understand how to best employ and use predictive tools. In the US it’s about the money, companies are investing slowly, but need to see a ROI.