Using Analytics to Rebuild the Enterprise and Set Human Creativity Free

By: | Category: IT / Infrastructure Solutions

Using analytics to rebuild the enterprise and set human creativity free

‘Analytics’ is a term that gets thrown around a lot when we’re talking about data and online services. But really, it just refers to the discovery of patterns and connections in data. That means all of us are, in some sense, data analysts. If you’ve ever looked at a spreadsheet or accounting report for your business and tried to figure out where you’re making and losing money, you’ve ‘done’ analytics.

Of course, modern technology has made analytics more powerful and extensive than the small business owner poring over a spreadsheet could ever be. The field itself is ever-evolving and its techniques becoming ever-more sophisticated.

From describing to prescribing

Descriptive analytics was the starting point: looking at data to determine what happened. The next step was the development of prescriptive analytics: looking at data to determine what should happen, based on past data patterns and emerging trends.

This development was important because it gave business owners a new way to forecast their business’s future; they could make plans based on data, rather than their ‘gut feeling’ or best guess.

If a computer system can predict what is likely to happen, and has been given information on what business management wants to happen, the next step is to provide the analytics system with the ability to tell management how to tweak inputs to get from the predicted future to the desired future.

The next big step in data analytics

Industry analysts see several possibilities for this next step. The first involves analytics systems being used to advise management. This is the traditional role of the IT system, but in the high-speed world of modern business it might not be fast enough to react to changing circumstances.

The second step is to adopt the analytics system’s prescribed actions to be the organization’s default decision maker, which is only to be overridden in the most extreme circumstances. And that leads to the third form: using the analytics system to feed commands directly into an organization’s process control and resource planning systems.

What happens to us humans?

The goal is to remove fallible humans from data-driven processes, maximizing their efficiency and reducing the costs associated with human operators and analysts.

More important, it allows businesses to free their staff from data handling, so they can concentrate on their highest-value contribution: their ideas. If team members can spend their time building relationships, researching and creating new product and service ideas, and creating a strong and transparent business culture, then (in theory at least) the organization should prosper.

Such an arrangement is already feasible. Major enterprise software companies are already demonstrating the integration of analytics and ERP required to take human managers out of the loop. While it sounds frightening to many, this merely brings to manufacturing and other types of enterprise the sort of automated business activity that financial services have already embraced in their trading operations. Prescriptive analytics will become a competitive advantage for the companies that embrace it; the real question is how quickly IT departments can be ready, and how eagerly team members embrace their new, more creative roles.