Gartner expects that through 2015, advanced analytics will become one of the most important categories of business intelligence and business applications. We live in a world which is increasingly instrumented and interconnected. The number of "smart" devices is growing everyday and the volume of data they produce is growing exponentially - doubling every 18 months. By 2012 we will have five times more data stored than we did in 2008. We now have access to more data than any time in human history, but we lack information, insight and understanding.
The challenge for business is to make sense of all these data, to hear the music amid the noise, to identify the valuable from the trivial, the critical from the unimportant and to do it all quickly enough to be able to make use of that discovery - to make better decisions. Making smart decisions Organizations make thousands of decisions every day, often without a complete set of analytical tools to prompt, frame, support and provide feedback on the decision.
However, as enterprise strategies become increasingly insight-dependent and enterprises seek to simultaneously broaden the number of decision makers and improve the consistency, accuracy and accountability for decisions, the demand for analytic capabilities will continue to grow. Advanced analytics lets us understand what has happened in the past to provide a baseline for the future. It gives us hindsight. As we improve our analytics we increase our understanding of not only what happened, but why and how. This delivers insight. Advanced analytics gives us the understanding to model and simulate the impact of changes on the world, allowing us to better predict what might happen in the future.
It gives us foresight. Real-time monitoring and stream and event processing lets us understand what is happening right now, enabling us to react in time to deliver line-of-sight from cause to effect. Better information enables better decisions. We can all be smart with hindsight - the challenge is to develop the foresight and the line-of-sight to make smarter decisions about what is happening now and what is about to happen. Developing better, faster and more powerful analytics is all about developing foresight. Advanced analytics helps us to see more clearly - to see what needs to be done and by when. See what is needed and where. See what is being wasted and why. See what could be achieved and how.
Advanced analytics helps to simplify decision making - make the complex simple, the obscure clear and the unexpected predictable. But when faced with overwhelming volumes of information you can no longer dwell on each individual data point, you have to spot the patterns and the outliers, the anomalies and exceptions for these are the signals that indicate change is coming and that a decision has to be made. As information was to data, so patterns are to information.
Patterns represent a higher level of abstraction of inter-related critical information from multiple sources, highlighting clear actionable information. While the information may come from many different sources, business analytics is the critical element in identifying the meaning, isolating the anomalies and exposing the patterns. Successful organizations will be those that not only seek out the early signals of change, but also understand the implications of those patterns and then act quickly enough to realize the value through business activities. They can seek, model and adapt to the early indicators of change.
Gartner describes this as a "pattern-based strategy." The ability to make timely decisions based on patterns observed is critical to success. It is not enough to identify the early indicators of change, or to just understand their impact and significance if that knowledge is not translated into actions that deliver positive business outcomes. It is the ongoing ability to adapt to a continually changing business environment and optimizing the business outcomes that delivers success.
Steve Prentice is a vice president and fellow at research firm Gartner