The Importance of Data Analytics

Socrates said that the unexamined life is not worth living. While living a life or running a business with unexamined data is still worth doing, its potential certainly is limited.

As humans we process data naturally and in virtually all moments of our lives. When we speak to a colleague, we are processing verbal information, physical cues, and our own internal thoughts. Some people process these data points of social interaction well and are often described as charismatic.

Other forms of data can be much more complex and requires effort and attention to detail, as well as creativity in order to utilize it. For example, a water-cooler conversation with a colleague is unlikely to require too much effort or attention to detail. But a more complex conversation with a superior about a raise or performance review will lead to most people analyzing verbal and physical cues much more in-depth.

“Data is the new oil.”

-Chris Anderson, CEO of 3D Robotics

Intentional Data Processing

These two forms of data processing can be categorized as unintentional and intentional. Unintentional data processing occurs when we are not thinking about the data points or are interpreting them subconsciously. This often occurs in low risk and natural environments such as the water-cooler conversation.

Intentional data processing is when we consciously look for feedback cues in any given circumstance. This often occurs when there is higher risk and when we are in environments we are not used to such as performance reviews from superiors. Despite the discomfort and effort that it takes to intentionally analyze the data points of our lives, it is through intentional data analytics that growth and efficiency come from.

“Data is the lifeblood of our age.”

-Jeff Jonas, IBM Fellow and Chief Scientist of Entity Analytics

Data as a Driver of Prosperity

Human history can be broadly classified into three revolutionary ages.

1) The Agricultural Age (i.e., Neolithic Revolution)

During this time period humans began to shift from being hunter gathers into one of agriculture and settlement. Most people moved to farms to grow and tend large quantities of animals and produce for their family and communities. This in turn lead to densely populated settlements and a further cultivation of knowledge.

The data that led to this revolution was simple: it is much easier to harvest plants and tend livestock than it is to hunt down your dinner every other day. This simple analysis of data and innovative solution ignited human prosperity.

2) The Industrial Ages

Around the year 1760 people began to incorporate innovative machinery to make their lives more efficient. This led to large scale production across nearly all fields and began the shift to urban environments.

Workers eventually moved from farms to factories and advancements in physical infrastructure was the sign of human progress.

The data in the industrial age became more advanced and intentional as economic systems flourished and competition increased. Modern economics began to form and intentional attention to data translated into an environment of mass productivity.

3) The Information Age

The current age in which we live, the information age, can be dated back to the early 1970s when computers were first being used to store and process data. This led to a rapid expansion of telecommunications and globalization. The ability for people to connect with one another around the world has allowed for unprecedented amounts of data to be shared and analysed.

The data in this age is some of the most complex that humans have ever encountered. It ranges from the simple (e.g., agricultural data) to the incredibly complex (e.g., big data). The ability for businesses to effectively and efficiently analyze this data is essential for their prosperity and survival.

It is not difficult to find businesses that have failed to analyze their data effectively. Sears, Toys “R” Us, and Blockbuster Video are a few examples of companies that once dominated their respective markets, but have since filed for bankruptcy. These companies were unable to keep up with the competition as they failed to analyze data that would’ve shown them that they needed to change their business models.

Data analytics is essential for businesses because it allows them to make informed and efficient decisions. By understanding the data that surrounds their company, they can identify areas in which they are excelling and areas in which they need improvement.

They can also understand what their customers need and how best to appeal to them. This understanding can help businesses stay ahead of the competition, as they will be able to anticipate changes in the market and react accordingly.

Data analytics is also important for businesses because it allows them to understand their financials. By understanding where their money is coming from and where it is being spent, businesses can identify areas in which they can save money and re-invest to grow market share.

“Data is the oxygen of the modern economy.”

-Mark Cuban, Investor and Owner of the Dallas Mavericks

Data is the Currency of Modernity

Data has become the currency of modernity. Just as money is used to purchase goods and services, data is used to purchase insights and innovations.

Businesses use data to understand their customers, competitors, and industries. Governments use data to understand the needs of their citizens and enact legislation that will benefit them. Individuals use data to improve their personal lives and make more informed decisions.

Data is essential for human progress and it is becoming increasingly more important with each passing day. It is the currency of modernity and its value is only going to increase in the future.

Data analytics is important for businesses, but it is not easy to do. It requires a lot of time and effort to analyze data effectively. However, the benefits that can be reaped from doing so are invaluable.

Data-driven organizations are 23 times more likely to acquire customers; six times as likely to retain customers; and 19 times as likely to be profitable as a result.

As the world becomes increasingly more digitized, data will only become more important. It is essential for businesses, governments, and individuals to understand the value of data and how to best utilize it. Data analytics is the key to unlocking this value and it is essential for the success of any organization in today’s world.