9

59.3

65475

1,14%

5.000.000

11

What is Analytics?
-296
74,5

915

73457 4236345

23658 8

58569

30.500

8,249

47,5

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256

Preface
The world economy has discovered a resource like few others that is completely renewable and an infinite source of knowledge. The vast amounts of data now available provides insights into anything desiring to be known, and analytics is the tool that creates that value. In brief, analytics is a collection of processes and technologies that turn data into usable information and knowledge. It is also a source of confusion for many because it serves as an umbrella term under which a wide range of systems and technologies exist. In this report we will introduce the processes and technologies that make up analytics as well as unpack the most prominent terms such as web analytics, customer analytics, and business analytics so that you can understand the effect of these technologies.

What is Applied Data Labs?

Life is changing faster than ever with data driving new economic opportunities and transforming the way our world works. The new field of Data Science is on the cutting edge of this change, and at Applied Data Labs data science is what we do. We are a global research and advisory lab delivering the insights necessary to keep our clients ahead of the curve and discover the trends that will change the world. We guide leaders in IT, marketing, and strategy through fact-based insight ensuring their business success by helping them understand, strategize, and act upon opportunities brought by change. Composed of leading voices in analytics, our data scientists have researched, designed, and deployed analytics projects for many Fortune 500 companies such as Microsoft, Cisco, Orbitz, Procter & Gamble, and United Airlines. Now we use our knowledge to create a more data driven world. Jeremy Kolb

We are a global research and advisory lab delivering the insights necessary to keep our clients ahead of the curve and discover the trends that will change the world.

Applied Data Labs Senior Data Scientist

2012 All rights reserved. This report or any part thereof may not be reproduced without the written permission of the copyright holder.

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What is Analytics?

Table of Contents

Why Should You Care About Analytics? What Does Analytics Do? What Does Analytics Do Specifically? Where is Analytics Going? Application In Business Technical Specifics About Analytics What to Look for in the Next Generation Term Index

3 5 6 8 9 10 11 12

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What is Analytics?

Why Should You Care About Analytics?

Our world is dividing between those with the capability to take advantage of analytics and those without. The elites see their data as an ever increasing asset and competitive advantage, changing the guessing game of business strategy into a perfectible science. To the rest, data is a liability stored to satisfy data retention policies not a resource to be unlocked but a requirement to be satisfied. The incredible abilities for discovery and forecasting are out of reach if they are considered at all.

Data can be produced by anyone, and with advancements in analytical technology, can be utilized by everyone.

The elites see their data as an ever increasing asset and competitive advantage. To the rest, data is a liability.
New technologies and strategies are bridging this gap by democratizing these abilities, and we are seeing substantial growth in the data industry as a result. In this report, we outline the various advances and important trends that are bringing about this change.

How should I understand Data?

Before exploring anything about analytics it is essential to first understand the nature of the main resource it uses: Data. Data is quite similar to traditional resources such as copper or wool in that someone produces it, and then someone else buys the raw material and makes something new from it. However, it is unique from traditional commodities in that it doesnt get used up in the process, making it particularly interesting and uniquely valuable. Data can be produced by anyone, and with advancements in analytical technology, can be utilized by everyone. But most companies do not see their data this wayit is a backend to reports at best or an expense at worstwhich means this potential revenue source remains largely untapped.

Analytics Defined
Analytics is the collection of technologies and processes that turns raw data into usable knowledge in order to inform decisions and drive action. Although it provides a clear reference, this definition does not truly explain the intricacies of the analytics market and the available tools. In this report, the term will be examined through first looking at the problems analytics solve and also its various manifestations.
1

What is the Problem?

The exponential expansion of data in recent years has resulted in mind numbing amounts of data, making it virtually impossible for companies to get by using the old means of analysis. In 2010 Eric Schmidt, then CEO of Google, said that we now create as much data every 2 days as we did from the dawn of man through 2003.1

http://techcrunch.com/2010/08/04/schmidt-data/ What is Analytics?

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Why Should You Care About Analytics?

IDc Digital research has predicted that the amount of data in the world will grow by 50X in the next decade.1
As the number of devices capable of producing datasuch as cell phones, tablets, RFID readers, etc continues to grow, the amount of data being produced daily is growing with it. Companies know useful patterns and information exist in this mountain of data, patterns and information that can explain causality and even predict outcomes. However, without the proper tools these patterns are difficult to access and the financial gain they could provide remains buried.

they need. Reports simply can not be generated easily, and the amount of time needed to create one demands that the query be worth the hours used to create it.

What is the Solution?

The solution is analyticsit is the tool used by top companies to leverage data as an asset. It finds patterns and data trends with data mining tools. It explains causality through statistical analysis and quantitative analysis. It tests past decisions using multivariate testing and a/b testing. it anticipates future outcomes using predictive modeling and predictive analytics.

Analytics is the tool used by top companies to leverage data as an asset.

IT Is effIcIenT. Computes processes in minutes that once took hours. IT Is profITAble. Automates processes to convert data into usable information. IT Is convenIenT. It is mobile and easy to use. Analytics does the remarkable: it allows companies to intuitively explore data and automate data discovery. It opens the door for companies to make fast data driven decisions and optimize business processes.

companies know useful patterns exist in this mountain of data, but without the proper tools the financial gain remains buried.
This difficulty begins with the reliance on IT departments to produce the valuable insight needed. Without proper analytics tools, decision makers must go to IT for information, which results in IT producing reports, which typically prompt more questions and starts the cycle anew. This creates a culture of scarcity around data analysis due to the difficulty of attaining reports and the limited time available for report creation. Adding to the inconvenience of data reporting without analytics is the inefficiency. IT first has to receive, then process, and finally return the reports, and because of the long wait times caused by this process, decision makers have to know well ahead of time what reports

http://www.emc.com/leadership/programs/digital-universe.htm What is Analytics?

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II

What Does Analytics Do?

Analytics is BI (business intelligence) evolved. Where BI provides the tools to discover the answer if provided the proper question, analytics finds the answer to the question you didnt think to ask. It is the advancement from deductive data analysis to inductive data analysis. able to confirm or negate the validity of that hypothesis, and can form a new hypothesis to test if needed.

Inductive Data Analysis (Analytics)

Contrasting deductive is inductive analysis. Instead of starting with a hypothesis, users are able to start with a goal and discover the data that informs that goal. Do you want to know what zip code is most likely to respond to your offer? Inductive analysis will find the data most applicable and give you the answer. Inductive analysis starts with the data and discovers the best parts of it to answer whatever question you put to it.

Deductive Data Analysis (bI)

Deductive data analysis is one of two means of analyzing data, it enables users to answer questions such as: What happened? When? Who? and How Many? Using tools such as Excel and OLAP, a user first makes an educated guess regarding the cause of a particular abnormality or trend. Then using deductive analysis tools the user is

Advancements over business Intelligence

Simple comparison of the two technologies: bI vs bA
Answers the questions:

busIness InTellIgence
What happened? When? Who? How many?

busIness AnAlyTIcs
Why did it happen? Will it happen again? What will happen if we change x? What is the best possible outcome? What else does the data tell us that we never thought to ask?

Includes:

Reporting (KPIs, metrics) Automated Monitoring/Alerting (thresholds) Dashboards Scorecards OLAP (Cubes, Slice & Dice, Drilling) Ad hoc query Multidimensional Queries

Statistical/Quantitative Analysis Data Mining Predictive Modeling Business Resource Planning Multivariate Testing Quick response analysis Sentiment Analysis Business Planning Data Visualization Infographics

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III

What Does Analytics Do Specifically?

Ad Hoc Query
Ad Hoc is latin meaning for this, and an Ad Hoc Query provides reports designed for very specific situations. Where once business relied upon general reports meant to service a wide range of needs, analytic reports focus only on the data needed for a specific task. In analytics the term has grown to incorporate speed and ease of use as well. Analytics has the power to create data reports with minimal technical skill required and deliver them quickly, enabling users to make highly informed decisions on even the most peripheral decisions as well as those central to their mission.

Analytics has the power to create data reports with minimal technical skill required and deliver them quickly, enabling users to make highly informed decisions.
used to project into the future.) Of course programs have been able to do this for some time now, but where analytics sets itself apart is its ability to forecast the impact changes will have on trends. Instead of simply knowing where the trend is headed analytics tell you what you need to know to influence the trend in the direction you desire.

Predictive Modeling / Trend Projection

s a society we are growing more accustomed to computer-generated predictions, and in fact we rely on them when checking the weather, travel times, or even typing in a Google search. Behind the interface, these programs use trend projections and predictive modeling to get you the information you need or even predict what you are going to ask. In the simplest of terms, predictive modeling and trend projection is precisely what it sounds like. Given a data set, analytics will project the trends into the future and predict outcomes. (The term predictive modeling is an artifact of what happens on the back-end: a data model is created which describes the data and is then

Data Visualization
Another way analytics is breaking down the barriers to effective data management is through new methods of data visualization. Data discovery used to rely on individuals with high levels of technical and statistical abilities who were able to look at spreadsheets and understand the implications of that information. With advancements in data visualisation, those patterns are

Instead of simply knowing where the trend is headed analytics tell you what you need to know to influence the trend in the direction you desire.

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What Does Analytics Do Specifically?

now accessible to a wider audience. Take for example the 2010 US census data presented in spreadsheet and visual form:

sample of 2010 us census data

visualization of entire population numbers from 2010 us census data

Analytics has changed the way we see data. Both images depict basically the same data, but the bottom image is designed to be easily understood using our abilities to recognize patterns visually. What analytics does is transform the data into an interactive environment capable of delivering useful knowledge in a friendly way.

What analytics does is transform the data into an interactive environment capable of delivering useful knowledge in a friendly way.

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IV

Where is Analytics Going?

Cause identification
In every area of life unexplained things happen. Sudden drops in revenue, a particular product skyrocketing, or a plummeting election campaign. Some of these trends can be identified using currently available analytics tools, but a great number of the underlying causes remain hidden due to the lack of necessary data and context surrounding the incident. Where once companies attempted to explain all causes using only in-house data, analytics is now trending towards the inclusion of more data than just what the customer provides, from sources both public and private. This augmentation provides users with much deeper understanding of causality by not only analyzing the business but also the physical surroundings and industry trends. For example you may see that customers in a certain area are buying more product, but you may not be able to understand why until you add the data that tells you that customers in that area tend to have larger families. This insight will then allow you to advertise more effectively in that area by understanding the demographics. So when you hold a focus group, not only will you have the data they generate, but you will be able to augment that data with information about the focus group. Are they a good representation of local demographics? What percentage of their answers are likely to be in line with the rest of the market? Did they just tell me what I want to hear? Would they likely say they are happy? The right data can answer any question and analytics will soon have all of the contextual data needed. For more information on this trend read, Applied Data Labs Fusion Project

Consumerization
Data discovery and information manipulation was once the sole domain of the precious few with high levels of technical and statistical abilities. But the world of analytics is quickly transforming this elitist state. Many programs now focus on usability for people of all levels and the ease of training--called consumerization. However, certain barriers still endure. Overwhelming interfaces and limited data dexterity still pester those unfamiliar with the territory. At Applied Data Labs we see that advancements in this area will soon make analytics so accessible that anyone and everyone will feel confident in their data.

Mobility
Analytics has recently started breaking away from the traditional desktop and laptop interface through smartphone and tablet applications, but for most software programs these are simply additional features to augment the desktop version of the program. This often makes these applications rather dicey and unable to perform at the high level of their desktop counterparts. Several analytics projects are changing this, and the trend is headed towards increased mobile ability and mobile interfaces designed to take advantage of all the tools and new interfaces available on smartphones and tablets.

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What is Analytics?

Application In Business
Business Analytics
Customer, sales, ERP, and web analytics all are within the broad field of business and have several shared features. Each in their own way seek to explore and investigate past performance data in order to facilitate planning and optimization. Regardless of the particular business or specific need, all analytics programs enable users to make better use of the resources they have. about your customers so you can more effectively meet their needs and sell more product.

Sales analytics
Sales analytics is often a subset of customer analytics, It focuses primarily on data from marketing efforts, customer analytics, and customer feedback among other sources. Its goal is to discover sales ideas, tell you product life cycle information, and enable you to capitalize on opportunities and maximize product return.

ERP (Enterprise Resource Planning)

Useful information about everything from team effectiveness to issue frequency and cost, is hidden within company data. ERP programs use data tools to manage these areas and others such as human resource data, resource usage, resource cost data, trend measurement, and project data. In general ERP facilitates the sharing of information throughout the entirety of an organization, and manages the flow of data to stakeholders outside the company.

Web Analytics
The purpose of web analytics is to increase your knowledge about your websites performance in a wide range of areas. Web analytics does this by providing users with incredible amounts of data concerning their website. It shows how well user websites retain viewers, where viewers are lost, whether demographics plays a role in retention, and how long they linger on a page. This type of information enables users to address problems with their website to optimize performance. Beyond addressing website problems, web analytics also enables users to capitalize on high performing sections through identification and optimization. Web analytics will quickly identify how effective landing pages are at creating conversions and show users the process typical of a user after finding the website. It will examine where traffic is coming from, what browsers are most heavily used to access their content, and even what mobile devices are used.

Customer analytics
Customer analytics enables businesses to take information gained about consumers gathered either internally or externally and use predictive modeling in order to gain useful insight about customer behavior. The information gained is often used for marketing purposes as well as customer relationship management. Simply put, it enables you to know more

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Technical Specifics About Analytics

Horizontally-scalable columnar data stores
These are newly-popular types of data stores which store data in a much simpler, flatter, and non-relational manner which allows data repositories to be scaled up by adding more servers, typically in on-demand computing clouds like Amazon Cloud. In the past (with relational databases) scaling up involved complex clustering configurations and replication. The drawback to these columnar data stores is that they do very little for you as a programmer aside from providing a place to put your data, which means that you have to spend much more time upfront to use them because their schemas have to be pretty much hardcoded (and I do mean coded), and programming for them is not a simple as writing simple SQL queries (although this is slowly changing). Popular examples include Apache Cassandra, MongoDB, and the new Amazon DynamoDB, but there are many others.

Data synergy and Augmentation

Data synergy and augmentation is the idea that the more data you add to your stockpile, the more valuable your existing data becomes. If you have the means to combine and overlay multiple data sets so that they feed off one another, the value of your data pool as a whole grows exponentially and the insights you can derive from it become much richer and more valuable.

An improved ability to recognize patterns

The ability to store multiple data sets in one place and use distributed processes to analyze the whole allows you to do some interesting things with pattern recognition. Often patterns and trends only emerge as you add more and more data sets to the pool, which is why the ability to add an exponentially-growing amount of data to the equation is important in the first place. By teasing out the patterns in the cumulative data sets you begin to expose the real value in the datathe insights and revelations that werent possible before.

Distributed data analysis

The ability to analyze data as it comes in, and distribute that analysis across a cluster, is quite different from the traditional ETL process used by data warehouses. This is where Hadoop is getting popular, because it allows you to take each chunk of data you receive and send it to a cluster for detailed analysis. Being able to break up complex queries and run them across a cluster is much more efficient than running it in a single process, and this becomes very important if you need to analyze very large amounts of data. (Hadoop is not the only game in town for distributed analysisfor example Stormproject).

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VII

What to Look for in the Next Generation

This report clarifies where analytics is today, but the culture around data is ever evolving and advancement in various technologies necessitate advancements in analytics.The trouble with our current business analytics solutions is that they rely on old methods of manipulating data and outdated interfaces. Googles Eric Schmidt said it well: I actually think most people dont want Google to answer their questions. They want Google to tell them what they should be doing next. As it stands now, people need to discover how to discover data. The next gen will enable analytics to tell you what to do next.

As it stands now, people need to discover how to discover data. The next gen will enable analytics to tell you what to do next

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AppendIx A

Term Index
Ad Hoc Query A data query issued in response to an immediate need requiring instant feedback. Aggregate data Data combined from multiple sources. big Data Umbrella buzzword under which a wide range of advancements in data management reside. cloud computing One form of computing as a service, often providing analytics services without requiring on site installation. crM (customer relationship Management) CRM software provides basic BI abilities to small businesses Data consumerization The process of making data easy to use. Data Discovery The analytics driven ability to play with data and find unique and valuable information Data Drilling Breaking data into its component parts in order to gain greater insight. (days to hours, hours to minutes, etc.) Data Knowledge Clear usable information gathered through data analysis. Data Mining Designing of new processes for creating useful data knowledge. Data Query The information (a question) sent to analytics software in order to gather data knowledge (an answer). Data reporting The task of turning a data query into data knowledge that is now performed by analytics. Data set A collection of facts and figures, commonly in spreadsheet form, submitted to a program for analysis. Data story The idea that, when understood properly, data tells useful stories. Data visualization An emerging trend in analytics that enables easier proportional and relational analysis through the use of charts, graphs, and infographics. Data Warehousing The storing and managing of large amounts of data. Data exploration See Data Discovery

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AppendIx A

Term Index

Dashboards an old means of keeping track of data that presented groups of important data selected by the user. Decision Automation New technology that enables analytics systems to make changes to optimize performance. erp (enterprise resource planning) Company wide uniform data management system providing real time data tracing and often automated decision making tools. eTl (extract Transform load) The process of taking data from an outside source, converting it to fit current standardization, and adding it to current data. HolAp (Hybrid online Analytical processing) Combination of ROLAP (relational) and MOLAP (multidimensional) enabling higher degrees of control and data manipulation for the user. Interactive reporting Data reporting tools with high levels of data discovery easily accessible. KpI (Key performance Indicators) User selected data streams that indicate overall success. Typically a key component of dashboards. KsI (Key success Indicators) See KPI
MolAp (Multidimensional online Analytical processing)

Multidimensional Analysis Data visualization demonstrating multiple factors of importance. (volume and time) (Profit margin, expenses, revenue, time, etc.) Multivariate Testing Hypothesis testing on complex multi-variable systems. olAp online Analytical processing A technical term referring to specific background structures of analytics within cloud computing. scorecard a data report tracking KPIs and comparing current level with set goals. Does not provide information on how to attain the goals however. rDbMs (relational Database Management system) The technology enabling more rational organization of data. rolAp (relational online Analytical processing) A means of data storage that enables far greater amounts of data storage. root cause Analysis The process by which analytics identifies the initial cause of a statistical anomaly. Theoretical Analytics The branch of analytical science focused on the expansion of analytical computing abilities.

The more traditional form means of data storage for OLAP, faster processing but less data storage ability. MetaData The concept of data about data, most easily understood as reference tools.

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