A top challenge for businesses in the age of big data and analytics is determining how best to extract value from their data. Being able to combine structured and unstructured data and then turn it into insights that will have a real business impact is what differentiates pioneering companies from the rest. Insight-as-a service can offer a variety of advantages to companies that are putting data to work.
In the last few years, we’ve been hearing a lot about big data. Large data sets are generated at increasing rates from a variety of sources, both structured and unstructured. The web (desktop, social and mobile), sensors, and most recently cloud-based applications are all contributing to the massive flow of data. Gartner predicts that, through 2017 and beyond, an unprecedented growth in multi-structured data (data that comes in dozens of formats and resides in non-transactional systems such as machines, sensors and customer interaction streams) will require vastly improved tools, skills and principles for effective analyses.
Since data arrives from multiple sources, businesses are looking for solutions that help them integrate massive amounts of data. They are turning to providers that aggregate and deliver data as a service, typically designed for a specific function (Finance, HR, etc.) in a specific industry.
For example, Experian supplies information on people, businesses, motor vehicles, insurance, as well as “lifestyle” data collected from on- and off-line surveys. Similarly, IMS Health provides 10+ petabytes of unique healthcare data to over 5,000 clients worldwide. IT companies offer even more data services and products. And the proliferation of devices that make up the Internet of Things will increase the capacity of service providers to capture and provide entirely new kinds of information.
Enterprises are clearly hungry for data. According to IDC, 70 percent of large organizations already purchase external data and 100 percent will do so by 2019. And by 2015, it is estimated that more than 30 percent of analytics projects will deliver insights based on a combination of structured and unstructured data.
Will more data be enough?
But just because companies capture a lot of data doesn’t mean that they can effectively use it all. Many businesses don’t have the necessary resources to sort through the data they already have, and much of it goes unused. According to the IBM Business Tech Trends study, only one in five companies has all the skills necessary to gather and use insights effectively.
Also, many companies are not confident that their current insights-gathering processes contribute effectively to their business. According to Lori Beer, EVP, Specialty Businesses and Information Technology at WellPoint:
“One of the biggest challenges and advantages of the U.S healthcare industry is data. There’s a lot of information out there, but medical providers do not have enough time to sort through it all and apply it to patient care. Everyone is trying to deliver the best possible health care. The question is how do you come up with game-changing ways to understand the data underpinning our treatment decisions, considering that 80 percent of data today is unstructured?”
The journey from data to insights
The value of data is established through its analysis and the effective actions taken as a result. Analyses that generate insights that lead to impactful actions create value. For example, by applying predictive analytics, a company can rate its customer base to determine propensity to churn. But acting on insights is the next level that leads to a clear business impact. A solution should not only determine each customer’s attrition score; it also needs to go a step further, automatically identifying the customers to focus on, recommending the attrition-prevention actions to apply to each, and finally, determining the portion of the marketing budget that should be allocated to each set of related actions.
According to another IBM Center for Applied Insights study, Inside the mind of Generation D, companies that leverage various data sources, both structured and unstructured, and use prescriptive analytics report better results on key performance indicators (KPIs):
Generation D companies also report greater effectiveness at addressing business challenges:
- 7 times more effective at developing new revenue streams
- 9 times more efficient at penetrating new markets
- 3 times more efficient in their operations
Analytical insights can clearly impact business outcomes. Take Intel, for example. In 2014, Intel implemented advanced analytics software that helped generate over $351 million in revenue. One of the first analytics projects the company implemented involved helping salespeople become more efficient in outbound calls to resellers. The IT team developed a recommendation engine that uses predictive algorithms and real-time data analysis to prioritize sales engagements that show the greatest potential for high-volume sales. It also recommends optimal contact time and proposes products to offer to resellers to increase cross-sell and upsell opportunities.
“As-a-service” – a new way to consume insights
The cloud can be used effectively for the creation and delivery of insights from data. First, there are many versatile cloud integration solutions available that help enterprises tackle complex data integration, all without forcing users to write code or learn multiple systems and user interfaces. The cloud also allows organizations to test hypotheses by offering easy access to a large variety of analytics and insights. And hosting analytics tools in the cloud removes the need for business users to build and host their own solutions. Running analytics on the cloud also could be cheaper. As the CEO of Medio (a real-time analytics firm) said, “Customers can’t afford to have enough capacity to analyze the explosion of data that we’re generating. The cloud is winning out.”
Insight-as-a-service applications are starting to be recognized as a distinct layer of the cloud stack and an important extension to analytic applications. Action-oriented, analytic-driven solutions, they often incorporate a variety of data sources such as proprietary corporate data, syndicated and open source data, and data generated by other software-as-a-service applications. They are a step ahead of other cloud-based platforms that enable users to generate reports or perform analytics but don’t link the conclusions derived to a specific action or set of actions.
As corporations begin to understand the importance of data-driven decision making, insight-as-a-service applications will become essential to help them achieve their goals.
Re-published on Forbes on Sept 10