- December 19, 2012
While data-driven decisions is nothing new (remember the rise of “decision support systems” and “business intelligence”?), it does seem that enterprises have a new urgency these days: Enterprises that make data-driven decisions are gaining benefits ranging from better customer insights, higher sales, more efficient operations and lower costs. What’s not to like with that?
Today, the “volume, velocity and variety” of data that enterprises have at their disposal is mind-bendingly greater than just a few years ago. And, enterprises are embracing the kind of real-time decision making that does not just run the business, it runs the business smarter. Whether driving better customer engagement (and sales) or enabling more efficient operations, big data has become an essential asset for the modern enterprise.
Earlier in my career I was an operations research analyst – kind of an early-day data scientist. There were 5 questions I always made sure to answer regarding any project I undertook. These questions frame an analytic process that underlies making effective data-driven decisions, and I think they are as applicable today as ever.
- Do I understand the decision to be made, especially the business factors that make this decision important?
- Do I have a model that captures the decision process? I.e., do I have an analytic framework, mathematical description, appropriate algorithms, etc., that describe the decision to an appropriate degree of detail. Part of this is picking the right algorithms.
- Do I have the data? This is pretty obvious: if data is going to drive a decision, you need to have the data. Even in today’s environment of an overabundance of data, it’s still important to make sure you have data appropriate for the model and the decision.
- Do I have the necessary computational infrastructure? This used to mean, can I run this on my PC or do I need to get time in the data center? Today it means, how can I get a cluster of Hadoop servers pumping data into a NoSql database to drive my analytics. Today’s infrastructure is much harder to master.
- Am I producing results that are driving the decision? If so, great. If not, maybe I got something wrong in #’s 1-4. Repeat 1-4 until satisfied.
Questions 1 and 5 are about the business. Since you know your business better than anyone, you’re pretty much on your own for these. Questions 2, 3 and 4 are about the data, analytics and computational infrastructure to get you the answers you need. There are plenty of companies that can help you here, in whole or in part. The important thing is to not get bogged down in the infrastructure. That’s where the Infochimps platform really shines. As quoted from a recent TechCrunch article, “Infochimps is one of a growing ecosystem of companies that are programming the knowledge of data scientists, statisticians and programmers into applications that businesspeople can use.”
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