I attended a seminar this week on predictive analytics, a topic some say would cure insomnia. But, I found the trends important and worth more consideration by anyone who owns a business or runs one or is employed by one – so the majority of us.
I love data, even as a totally right-brained person, because it has a story to tell. The problem is we’ve exhausted the process of using lagging indicators to produce insight about future decisions. Companies should be moving from silos of data hoarded and rarely aggregated to a point where employees collaborate and make real time, fact-based decisions based on modeling organizational data and assessing the power of one choice over others to achieve results.
A few years ago, Thomas Davenport wrote a book titled, Competing on Analytics and cited large companies such as Marriott, Harrah’s and Progressive Insurance as the analytics champions. Not much hope for the rest of us, is that what you’re thinking?
Here’s what I learned from that seminar and I believe it is important for businesses of all sizes to get really clear about the implications of these trends:
Analytics are moving downstream. What was once done by a cube farm full of PhD’s will be done by us regular people who are tasked to come up with hard evidence for what we do (market, train, deploy technology, in short, everything). Technology will make it possible to collaborate with other functions to aggregate data and perform our own statistical and predictive work. On our laptops. In real time. Maybe a lone PhD floating among us.
Analytics are moving into every function. No longer will we be able to get by with a "I -can’t- quantify- the- ROI -of –why- I –need- this- money- from- the- budget-but- trust-me- on- this". Jack Fitz-Enz said it best in his new book The New HR Analytics: if the HR department doesn’t feel up to handling human capital issues in a quantifiable, predictive way; the C-suite will give the responsibility to someone else. That holds true for every function from Marketing to Customer Service.
Predictive analytics are a competitive advantage. At a time when we all are looking for the Holy Grail of business success, if your company isn’t starting now to explore the concept, it could find itself out-maneuvered and shut out by the competition.
- What if your competition could predict which of its customers was likely to defect in 6 months and offer them a sweetheart deal before they are out the door?
- How much money will you spend trying to woo a customer that isn’t interested in moving her business to you because you don’t know which behaviors trigger a purchase?
- What if you could predict which employees had the greatest power to impact customer loyalty and could increase the likelihood of retaining them by customizing their rewards and recognition?
Am I going to turn away from my intuition or sense of what feels right in favor of analytics alone? Heck no, but using both is the right equation: Intuition+ Experience + Analytics = Insight + Results.
How about you?
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