Big-Data Analytics & Business Decisions

·         Most companies have few (if any) analytics savvy workers
·         IT Infrastructure and technology elements for Big-Data analytics are common place
·         Data Management and Information extraction seeks tens of millions of dollars
·         Investment in Analytics is getting USELESS, even HARMFUL unless
a.       Employees are able to incorporate complex analytics and their implications into guidance
b.      Management is able to undertake complex decision making
·         At this moment, there is odds-on chance that poor decision is driven based on data-intensive information which was enormously expensive to collect

Managers need to wake-up to the fact that their data investments are providing limited returns because of under-investing and verifying on ‘understanding of information’.

For Deriving the VALUE proposition and adequately protect from harmful overdrives BIG-DATA analytics needs to be measured on the following:

INSIGHT IQ

It is a ‘Metric and method to measure and improve employee’s ability with data-driven decision making’.
1.       Unquestioning Empiricists’: Trusting analytics over Judgement
2.       Visceral decision makers: Exclusive trust on their gut
3.       Informed Skeptics: Best equipped to make balanced informed decisions

Companies need to cultivate data savvy workers and managers who show -
è Effective balance in judgment and analysis
è Strong analytic skills
è Listen and are willing to dissent
There is overall skill deficit which is compounded by 4 problem areas.

1.       IT needs to spend more time (and resources) on I than T
2.       Analytic skills are concentrated in too few employees
3.       Reliable information exists, but is hard to locate
4.       Business Executives don’t manage information as well as they manage Capital, Brand and talent

Companies need to measure the analytical ability as core performance measure at various levels and strive to develop competency.

Analytics in Oil&Gas

My own experience with this in Oil&Gas business is interesting.

1.       I for Information : Information is built upon the foundations of data organization and integration. In multi-disciplinary E&P business with very scarce skills on databases, the very understanding of this is at best primitive. T for Technology is always prevalent in E&P companies whole IT-Infrastructure spending is very healthy.

2.       Analytics : A traditional and conservative business with long lead-times from decision to impact depends heavily on conventional empirical and visual methods. Real-time data at every second is observed and trended for visual judgments. Invariably, conventional build-up tests or methods rule the interpretation. Analytical abilities and tool usage are specialized to domain tools that drive “proven” models. Little innovation and discovery, notwithstanding mountains of data.

3.       Information and Reliability : Ridden with complex inter-relationships there is seldom integration of data from multiple disciplines. Databases are complex and difficult. The 3-10y time-lapse from business decision (based on some prediction) to actual performance measurement, provides convenient avenue for diluted accountability and verifiability.

4.        Executive approach : Oil&Gas executives deciding upon myriad technical recommendations, compounded with regulatory issues, high-cost : high-value proposition and wide range of Uncertainties – rarely seek measures supporting their reviews or decisions. It is heavily a large collective ‘gut’ feeling!

Developing Informed Skeptics

Firtst and foremost, Skeptics need space in Organization and Business decision making processes. My next post on based on "New Sciencec of Building Teams" will discuss this in detail.

Analytical Intelligence is driven by sets of Informed Skeptics in an organization and its executive management. Three things matter:

1.       Training workers to increase ‘data literacy’
2.       Incorporate Information into decision making
3.       Provide right tools and technology
a.       Assortment of Enterprise tools supported by specialist tools
b.      Continuing nurturing of skills and analytical insights
c.       Providing access to coaching experts through people-oriented-data-experts

There are no ‘silver-bullets’ in Analytical Intelligence. Low hanging fruits are often dubious and of limited real value creators beyond the technology hype.

Analytics is a discipline – transgressing every technical, business and managerial function in most organizations. It empowers the core functionary who can understand differences in data, their biases and inter-relations. This requires critical thinking, unbiased approach and significant skepticism. There is no escape to establishing, building and cultivating strong database culture.

1. Analytical Intelligence is a definitive path in 21^st century.
2. It is a fundamental shift in organization and maturity of information in business decision.
3. It grows slowly.