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Why Business Leaders Must Master Data And Analytics

Oracle

(Photo credit: IntelFreePress)

By Rich Clayton, Vice President of Business Analytics, Oracle

There’s a war on talent.  The explosion of data in the digital universe is creating a skill gap and is opening up many new career opportunities in management.  A recent study from McKinsey Global Institute estimates that the United States needs 1.5 million more data-savvy managers to take full advantage of big data.  Managers, not IT professionals.  Leaders, not programmers.

Where data was once scarce, now it’s pervasive.  This is one of the key findings of a recent MIT Sloan study by Andrew McAfee and Erik Brynjolfsson.   The proliferation of mobile devices and social networks (e.g. Facebook , Twitter, Linkedin) are the largest sources of new data.  Massive amounts of new data are also being generated by sensors, medical devices and other digitally connected machines.

Information is the fuel for business innovation and these new data sources are simultaneously disrupting every industry and creating new opportunities.  In manufacturing, managers are using data from the shop floor to improve quality and lower cost.  In retail, marketers are using data from smart phones to generate offers based on location.  And in healthcare, hospitals are adjusting emergency room staffing levels based on the frequency and proximity of key words in search engines (e.g. flu symptoms).  How managers and organizations embrace this new data will separate the winners from the losers.

While this new data requires new technology, the primary gap is new analytical skills for managers.  Unlike their predecessors, analytic savvy managers must be highly capable of discovering patterns and finding relationships in complex data.  Recent advances in analytic technology and data visualization has neutralized the advantage held by statisticians, data mining experts and actuarials with advanced degrees in predictive analytics and operations research.  These new analytic capabilities allow managers to discover patterns, drill into detailed data, perform analysis and visualize relationships, without writing any code or contacting any data scientist.   An army of data scientists and an absence of data savvy managers is recipe for failure.  The combination of data science and management skills will create the next generation of industry leaders.

Analytic leaders must be constantly curious. They must know the difference between correlation and causality.  Anecdotes and intuition won’t be sufficient; data savvy managers will use data to improve future outcomes.   Analytic leaders will conduct dozens, if not hundreds, of hypotheses and scenarios to improve the analytical intelligence of their organization.  Developing repeatable processes and data governance will be necessary to create a sustainable information advantage.  Smart leaders will recognize the value of information and manage it like all other assets on the balance sheet.

How will you filter the noise and find the signal?  How will you embrace this new knowledge base to expand your organizations performance?  How will you change decision making from intuition to fact-based?  These are the big questions analytic leaders must answer today.