It is clear that analytics is a very hot topic now. Companies are committed to pursuing analytics and discussing their successes. Consulting firms talk about their services to help their clients take advantage of analytics. Software vendors tout their analytics solution.
But, what exactly is analytics?
Quick searches do not seem to yield good definitions.
Without a definition, there is some danger that the term will just become a another buzzword. People will simply attach the word to any project to help it get more visibility and attention.
In this post and others to follow, I will attempt to better define analytics and some of its components. This is a fast moving field, so it is likely we’ll have to revisit this. But, analytics is not a fad and will become a standard part of business.
To give us a starting point, here are four short answers from people and organizations who have put some thought into explaining analytics concisely (note that their goal is to explain and sell analytics, not necessarily give us a good definition):
4. From IBM
“Business analytics helps your organization recognize subtle trends and patterns so you can anticipate and shape events and improve outcomes.”
3. From Accenture
“High performance hinges on the ability to gain insights from data—insights that organizations need to make better decisions, faster.”
2. From SAS
“Most companies have plenty of data. But gleaning insights from this data to make better decisions remains a challenge. Business analytics can help.”
1. From Thomas Davenport. Since Tom Davenport Harvard Business Review Article in 2006, Competing on Analytics, seemed to kick off this movement, we’ll use the first sentence of article’s summary:
“Some companies have built their very business on their ability to collect, analyze, and act on data.”
This Davenport definition seems simple and concise and captures the spirit of the other explanations. So, a working definition is that analytics is the ability to collect, analyze, and act on data.
This definition, of course, is fairly general. For example, haven’t companies always collected, analyzed, and acted on data? They have. So, we will dive deeper in future posts to refine our definition and understanding.
(source: I originally wrote this article on a different blog)