The Science of Data: Making Better Business Decisions

A tsunami of raw data is now generated every second of the day by millions of devices – and it’s making big data analysis big business. That’s because most organisations have no idea how to use the information they have collected to make better business decisions.

To really take advantage of all the data available to them, firms need employees with the skills of a computer scientist, analyst, communicator and business advisor. Easier said than done, I hear you say.

Well, the bad news is it’s not going to get any easier to find those well-rounded employees with data analysis skills and a good understanding of business. In case you haven’t noticed, there’s a big ‘big data’ skills shortage – and not just in New Zealand.

As a university researcher I am used to crunching large data sets to look for patterns, relationships and insights to enhance business decision-making. But what was once the domain of scientists has now become a skill that every business will need to compete successfully in the 21st century.

We are moving to an information-based economy where the preferences and habits of consumers are quickly becoming the most valuable commodity there is. So what are the skills you need to develop within your organisation to ensure success in this new world order?

When LinkedIn analysed the skills that attracted the interest of recruiters or got its members a new job in the past year, statistical analysis and data mining topped the list. In fact, the business-oriented social network noted that firms all over the world were “aggressively hiring experts in data storage, retrieval and analysis”.

Other skills to make LinkedIn’s hottest 10 included search engine optimisation and marketing, business intelligence and algorithm design. These skills point to the importance of understanding both the basics of computer science but also the business disciplines of marketing, analysis and consumer insights.

It’s one thing to know how to set up data architecture and write algorithms, but quite another to do it in a way that allows you to extract actionable information to support business decision-making.

A key employee for firms in the future is one who can straddle these two worlds. Someone who:

  • Understands how databases work and the data your business holds.
  • Can optimise your firm’s online presence to capture data that is useful.
  • Can ensure algorithms are designed to extract actionable information from the mountain of data you have collected.
  • Translate the findings into business insights and better business decisions.

The end goal of harnessing all this data is simple: to make better business decisions. Instead of relying on gut feelings, you can see your customers’ preferences in real time.

You can see the impact of your various marketing activities and decide where your budget is best spent. You can single out high priority customers and give them better service. You can improve customer experience by offering individuals personalised services and products to fit their specific needs.

The ability to mine mountains of data has turned the traditional way of doing market research on its head. With large data sets you can undertake exploratory statistical analysis. Instead of testing a hypothesis based on anecdotal evidence or gut feeling, algorithms can now crunch data to find relationships between variables that you never knew existed. This is truly new information you could never have garnered before.

What we’re seeing is the start of the information revolution, which is rapidly changing the nature of work and the jobs people do. We’ve seen automation replace jobs in agriculture and manufacturing; now it’s happening in the service industry.

As more products and services are delivered online, service jobs are migrating to the information sector and handling data is the key part of this process. The McKinsey Global Institute predicts that, in the United States alone, there will be a shortage of 1.5 million managers with the ability to use big data analysis to make effective decisions by 2018.

As technology drives change at an unprecedented speed for the world’s workforce, the information sector is one of the few secure jobs of the future. If you are looking for a career change, consider data science – or, better still, point your children towards what the Harvard Business Review has dubbed “the sexiest job of the 21st century”.

 

Author: Leo Pass

Source: http://blog.marketing.org.nz/2015/03/26/making-better-business-decisions/

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