Advanced analytics are among the top trends that will have an effect on information technology in 2015. This year, experts believe, will be all about leveraging analytics to deliver real ROI to businesses. IT leaders will shift from thinking about the possibility of making investments in big data platforms to thinking about how to get more out of the investments already made – applying advanced analytics in order to derive actual business value from data.
A complete analytics portfolio includes what some call the “trinity” of analytics: descriptive, predictive, and prescriptive. Normal (descriptive) analytics deals with what happened; whereas advanced analytics (predictive and prescriptive) use future predictions, probabilities and trends to find the best course of action. Mary K. Pratt’s article in the January issue of CIO magazine focuses on prescriptive analytics and offers the following five tips that CIOs should know:
- It’s the next step in analytics. First there was descriptive analytics, using data to describe current or past circumstances. Then came predictive analytics, analyzing data to predict a future outcome. Prescriptive analytics suggests the best option for handling that future scenario.
- It requires more data integration. Data scientists typically spend about three-quarters of their time preparing data sets and only a quarter running analysis, says Forrester Research analyst Mike Gualtieri. That imbalance could worsen with prescriptive analytics, he says. CIOs can help by making it easier and faster to compile the required data.
- The CIO role: Evangelist. Strategic-minded CIOs should study the technologies and then sell the opportunities. “CIOs need to become evangelists on how the business can bring improvement through prescriptive analytics,” says Tom Davenport, a Babson College professor and author of Big Data at Work.
- There’s a need for speed. The results of a prescriptive analytics program could facilitate long-range planning, but they might also be needed to determine immediate actions in business processes.
- It won’t replace human judgment. If a prescriptive analytics program is to be successful, the organization must have the right people in place and get buy-in from those affected. CIOs can help by lending their change management skills–and by knowing how to balance technology-driven information and human judgment.
For more information about advanced analytics, see the full CIO article.
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