Business and IT leaders are boosting investment in advanced analytics, which can address business problems and provides business benefits far beyond conventional BI.
Leading organizations in almost all industries are embracing advanced analytics as they start to realize the vast opportunities and impact analytics can bring to solving complex business problems.
- Advanced analytics can reduce customer churn and make equipment safer.
- By achieving even single-digit percentage improvements in customer retention, marketing responses, fuel savings or quality defects, advanced analytics can realize big business impacts.
- In some cases, it can be genuinely transformational, enabling disruptive innovations in many areas, including new products in healthcare, automation, digital business, smart machines and robotics.
- In 2014, advanced analytics was the fastest-growing segment (at 12.4%) as organizations continued to move beyond descriptive and diagnostic analytics into predictive and prescriptive analytics. This was driven by increasing interest in using big data, predictive analytics and machine learning.
According to Gartner's Advancing Business With Advanced Analytics, advanced analytics goes far beyond basic analytics, which derives insights by simply explaining what happened. By contrast, advanced analytics is about problem solving by diagnosing root causes and effects, and by anticipating and optimizing outcomes, behaviors and processes.
To show this distinction, Gartner takes customer churn, which is an example that affects most firms. The basic analytics approach would simply seek to quantify the business problem by answering the question, "How many customers have we lost in the past three months?" However, advanced analytics solves the problem by answering the question, "What must we do to prevent our most profitable customers from going elsewhere?"Only advanced analytics can provide a methodological solution. How does an organization make the most of advanced analytics? Here are 5 ways to take smart steps toward advanced analytics exploration.
- Create a Solid Data Infrastructure for Advanced Analytics: The velocity and volume of data streams from business operations are soaring. The Internet of Things, still in its infancy, will add even more. Advanced analytics increasingly will need special infrastructure to keep pace with this rapid change. Analytics leaders face an array of infrastructure options to be understood and evaluated.
- Choose the Right Advanced Analytics Techniques: A major benefit of advanced analytics is its flexibility. The sheer number of options can seem overwhelming.
- Let the Business Process Be Your Guide: Different business use cases call for different analytics approaches. Use cases explain the real value behind advanced analytics. There are no predetermined ways for how data should move from its raw state to become an insight that results in a business outcome. By investigating real-world use cases, business and IT leaders can understand and illustrate what are the key advantages of advanced analytics and the technologies driving these innovations.
- Explore Industry-Specific Lessons: Different industries have their own terminologies. Their business processes differ and so do the signals in their data. But the differences can illuminate new opportunities for process change and innovation through advanced analytics. Gartner's research note "Lessons Learned From Advanced Analytics in Action" spells out several best practices based on hundreds of advanced analytics deployments.
- Organize for Advanced Analytics to Accelerate Success: Analytics leaders in particular have to overcome organizational obstacles that can block companies from getting the most out of advanced analytics. They need to understand how to build skills - even if those skills are scattered throughout the enterprise - create better communications, and tailor the organization through better process and governance that focuses on advanced analytics.
Gartner is a global leading information technology research and advisory company. Through the resources of Gartner Research, the research firm works to analyze the business of IT. Gartner has over 1,600 analysts and consultants.