The Growing Importance of Business Analytics
Brought to you by the Villanova School of Business
At the 2015 Gartner Business Intelligence, Analytics & Information Management Summit, the catchphrase was “analytics portfolio.” According to Gartner, this portfolio comprises four types of business analytics. These analytics include:
- Descriptive: what’s happening now
- Predictive: what will happen in the future
- Prescriptive: what can make it happen
- Diagnostic: what caused this situation to happen
Lisa Kart, Gartner research director, discussed the need for organizations to move beyond simply “using business analytics to being an analytics business” and highlighted the growing influence of business analytics, from marketing to finance and innovation. MBA and MSA degree programs are continuing to incorporate business analytics into the coursework. Today’s successful business leaders are also leveraging data analytics to gain a competitive edge.
The Dramatic Growth of Business Analytics
Image via Flickr by NEC Corporation of America
Gartner predicted global demand for 4.4 million big data analytics jobs in 2015, but employers are expected to fill fewer than half of those jobs. While 70% of enterprise-level organizations invest in external data, 100% of these organizations are expected to make that investment by 2019.
The big spenders in business analytics in 2015 are financial services, at $6.4 billion; software and government, each at $2.8 billion; media and communications, at $1.2 billion; and energy and utilities, at $800 million. Researchers expect these industries to increase their year-over-year investment in business analytics between 22 and 54% through 2020.
Data suggest that companies that use analytics to their advantage are twice as likely to rank in the top quarter for financial performance, five times more likely to make timely decisions, and three times more likely to execute their decisions and plans.
Business Analytics and Future Trends
Big data and analytics will shape the business of the future in remarkable ways. In manufacturing, nearly half of all businesses reported that analytics will be at the core of the digital factories of the future. Professionals will depend on these analytics to cut operating costs, improve asset use, and increase the agility and reliability of their operations. Analytics will be key in real-time performance insight, real-time logistics management and production quality analysis.
Cybersecurity, perhaps the most hot-button topic in the contemporary business world, is another frontier for analytics to conquer. At EMC World in 2015 in Las Vegas, EMC CEO David Goulden asserted that analytics-led intelligence is the future of cybersecurity. “The security industry is changing dramatically. If you look to the past, firewall and antivirus technologies came up as the main solution,” he said. Flaws in these perimeter-based solutions were behind high-profile hacks, such as the one at Sony in 2014.
Goulden said new analytics-led solutions will be the only way to identify and defeat malicious activity within an organization’s network. He indicated a rise in companies moving to analytics-led security solutions after the recent spate of highly public data breaches.
Big data used to be a buzzword with futuristic-sounding connotations, but the future of business analytics has arrived. Businesses that want to compete in the 21st century need to continue to embrace business analytics for their operations and equip their teams with individuals who have the requisite skills to help translate data into actionable intelligence.