Analytics and a Coming Climate Change

By Aditya Chavali, Principal at Kenfront LLC.

As you start your journey towards ascending the heights of the analytics world, two phrases are critical to your success “Applied Analytics” and “Data Wisdom.”  At Kenfront, we want you to know how important it is that we all understand, ingrain and inherit what these two phrases mean. As a result, we will be publishing a series of posts on these topics in the coming weeks. I will define these principals from an enterprise standpoint.  These two phrases point to a large climate change for the Analytics environment.

Applied Analytics

Before we talk about Applied Analytics, let’s first consider some history. Everyone has defined analytics in many different ways.  Every time we made progress in technology, we all felt like “this is it” and tried to ride the wave to see how far it would take us. Every new wave has been over promised, which led to a series of disappointments. If we look back on the failures, we believe it is because of lack of understanding the user perspective. Analytics implementors have been heavily technology focused and often missed the user perspective. There were cases where success is achieved with a focused approach by solving a specific business problem, however when the same template has been tried to meet broader organizational needs it quickly fell apart.

With the advent of cloud and more transactional system implementors out of business [^1] and the intensity of the analytics market, there is a new set of analytics architects that are trying to differentiate and come up with new analytics ideas. This has led to new definitions. When we look back on the failures and what needs to be done to be successful at using analytics in your organization, we believe you need to have 3 main ingredients.

  • Domain Knowledge
  • Analytics Expertise
  • Modern Architecture

We call this ultimate climate and environmental shift “Applied Analytics.” It represents the process of using analytics to solve your day to day business problems. It can be your smart systems, smart processes, risk or fraud alerts, maintenance predictors, advanced classification for analysis or simple dashboards or reports. It’s the application of analytics expertise and process knowledge to solve business problems, just like applied physics [2].

Now that we have set that stage, let’s peel back the layers.

Domain Knowledge. This is the process knowledge, sometimes referred to as the application knowledge, subject matter expertise, or industry-specific thought leadership.

Analytics Expertise. Can be a simple data warehouse, dashboards or reports to Hadoop or Spark-based platforms, or more importantly advanced analytics expertise like data science and machine learning.

Modern Architecture. While technology is critical, in an applied analytics world it takes a back seat. (We believe technology should be like clear blue sky on a nice sunny day where everything elevates but the sky which takes a back seat. More on this later.) With cloud options, there is no analytics problem that cannot be solved with less resources unlike olden days. We believe technology is a vehicle to solve the problems, but not the driver. In an applied analytics world, technology decisions come last.

I will post additional blog content for each of these three concepts during the next few months.

Data Wisdom

Dashboards and KPIs arrived early on, then it was analysis, then it was insights which led to the marketing phenomenon of Insights Driven Organizations. (We played our part too, check out our IDEA offering.)  All this generated a lot of hype into how organizations should use analytics and create value.

We think the answer is Data Wisdom (boom—another marketecture phrase is born!). If you look deep and find the true answer on why we need analytics for enterprises, it is to make decisions. For a long time, this decision-making power was ultimately left with the end users (who want to give up power to no one) which is the reason the focus of the analytics systems has been to provide insights (underlying truth). However, what ALL OF US missed is the importance of the interpretation of the truth or facts. With the rise of advanced analytics and modern architectures we are seeing slow but constant shift of this decision-making power from users to Artificial Intelligence (AI). It is this process of deriving wisdom from your data to make decisions using smart processes (you can add more to it) is what we define as Data Wisdom.

Stay tuned for my next blog…

References:

[1] With cloud and SaaS-based systems, there are quite a few, if not all, implementors that are forced to focus on other areas to scale up. Automation and Analytics are the two hot areas now where everyone is focusing on. Is this the start of the technology beast eating its own to move forward? It will leave it to you for interpretation.

[2] https://en.wikipedia.org/wiki/Applied_physics 

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