Data analytics seems like something for whiz-bang tech companies or larger operators. But this is rapidly becoming a thing of the past as technologies get easier to use and much more affordable.
So how can you leverage analytics in your own business? Well, to see, I recently talked to someone who should know: Travis Oliphant. He is the CEO of Continuum Analytics, which develops systems for open source analytics that is based on Python (which is a computer language). For the most part, Travis spends a lot of his time turning massive datasets into actionable insights and business value.
“In the past, data came primarily from operational systems,” he said. “Today, data is coming from everywhere: phone, Internet browsing, social media, quantified self, vendors who know more about you than you realize, machines, associations with friends, college buddies, business network and many other sources. Combining this data starts to paint a more holistic picture of your business, as well as your life and the underlying motivations that are driving the processes and behaviors.”
He compares data as a paint-by-dots version of Van Gogh’s “Starry Night.” No doubt, you kind of see the picture but you don’t see the full range and subtleties of Van Gogh’s original painting. Data science is the magic pixie dust that connects the dots and reveals the rich landscape in the painting, so that you have a deeper and more meaningful appreciation.
OK, then what are some real-world ways of how analytics can boost business?
Interesting enough, one of the cutting-edge use cases is the oil and gas industry. Often billions of dollars are staked on finding the next gusher (this is even more important now given the low level of energy prices).
Oh, and of course, the biotech and pharma industries have also benefited. Let’s face it, when launching a new drug, there needs to be intense analysis. If not, the repercussions could be severe.
“The key is getting real-time streaming visualizations of large amounts of image data,” said Travis.
Yet the same kind of thinking can be approached to essentially any kind of business. Hey, if you are thinking of launching a new product or going after a different market segment, are you even looking at the data? Are you backing up your hunches?
Unfortunately, there is often little or no analysis.
Again, the good news is that there are affordable, if not free resources to help out. For example, you can use rich datasets, such as from the government. Some to consider include the Census, EDGAR (which houses the filings from the Securities and Exchange Commission), Data.gov and the Bureau of Labor Statistics. What’s more, you can use Excel, which has powerful visualization capabilities or try out software that is focused on analytics, like QlikView.
But hiring a qualified analytics person – even on a consulting basis – could certainly go a long way in making much better decisions, which could avoid big-time blunders. Just a few visualizations of datasets could provide valuable insights on where you can take advantage of the biggest opportunities.
Although, data analytics can also be extremely helpful with just getting a better understanding of your current business. “You must think of your customer as a segment of one,” said Travis. “This level of personalization is expected by customers and when done effectively, you are richly rewarded with increase in wallet share, loyalty and word of mouth marketing viral effects.”
So while analytics may seem kind of daunting, it shouldn’t be. It’s worth diving in a bit and trying out the tools. You’ll probably be surprised with the results.
Tom Taulli (@ttaulli) is an Enrolled Agent and the founder of BizDeductor, which offers services and apps to help save a bundle on taxes.