Predictive Analytics Driving An Increasingly Networked Economy
MAKING effective use of data, in many cases huge amounts of data, is something that is on most business leader’s minds these days. In fact, it’s no longer a case of Big Data. The reality is that we are operating in an era of Massive Data – and this mound of data is growing by the second, as technology increasingly connects everything from our businesses to our refrigerators, resulting in a giant networked economy. The real challenge that companies are facing is how to make sense of this data, and to intelligently use all the advantages that this newfound network offer to create connections that make a real difference to business.
Most business leaders won’t necessarily admit it, but for the most part, companies are sitting on an enormous pile of unknown data. The problem is that many of them are not necessarily doing much with it. It’s called “dark data” – terabyte upon terabyte of information that nobody really knows what to do with – but they don’t want to get rid of it, because it might prove useful at some point. We are seeing lots of this in Africa. Worse than dark, this data is often unstructured, which means it’s disorganised and difficult to figure out. . In fact, research house Gartner estimates that roughly 80% of all corporate data is unstructured. And more data constantly keeps pouring in from everywhere: customers, suppliers and partners.
The good news is that if analysed and understood in context, this avalanche of information has the power to deliver a keenly insightful picture of a business at any given time. Simply put, if you are able to quickly respond to what your markets are telling you – like market fluctuations, or an increase in demand – then you’re way ahead of the game. To do this though, you need business intelligence technology solutions that turn the deluge of data into understandable, actionable insights.
Welcome to the world of predictive analytics and this world is not as arcane and techy as it sounds. Reality is that we all actually come across predictive analytics every day without even being aware of it: weather forecasts, insurance premium calculations and credit analyses are all based on analytics, the core ‘enabler’ of big data. With over 2000 customers in Africa, so many businesses are telling us they want to better understand their customers, make more accurate financial predictions and improve their sales forecasting. But beyond these obvious advantages, many forward-thinking companies are starting to think more strategically about how they can further intelligently leverage the information they are gathering anyway to drive revenues and grow their businesses. And this is where we are seeing smart businesses starting to look at analytics in Africa. In a business context, a smart analytics solution gives you the opportunity to spot trends, anticipate customer needs, forecast wider market trends and manage risk – all issues that are clearly key for African business.
Predictive analytics is very much a fledgling market, but it’s on the rise as data volumes grow. Africa is starting to get its head around the huge possibilities that the technology presents. Research undertaken by SAP found that for 60 per cent of businesses, predictive analytics is already an investment priority. Additionally, more than two-thirds of companies think that predictive analytics will be an investment priority for them within the next five years.
So, what does this mean for business long-term? Essentially, the use of this technology is putting data firmly at the heart of organisational decision-making, across all sectors and industries. The technology is also thankfully becoming increasingly intuitive, with easy-to-use interfaces that reflect the realisation that data should not be the exclusive responsibility of one individual or department; it should be front of mind of all employees. Data is therefore becoming more visual, accessible to employees and actionable, and suddenly analytics starts developing the potential to drive real value.
Ultimately, though, what will really see predictive analytics coming into its own is the ability to affect a cultural shift to one of greater collaboration. This is not just the realm of the technology department either. By avoiding information silos, and encouraging integration across the business and its networks, we will start to see the real power of analytics.
Serima is the CEO of SAP Africa
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