What is Advanced Analytics?
So often the buzzwords “data science”, “machine learning”, and “artificial intelligence (AI)” are thrown around interchangeably in meetings or in the news. To non-technical managers and executives who are responsible for making business decisions, it becomes increasingly difficult to figure out what exactly these methods are and determine how they may benefit their organization.
Each buzzword has its own capabilities and the perception that they are the same can lead to confusion. To provide some clarity, we’ll define 3 common terms:
Artificial Intelligence (AI): Produce Actions
- A broad concept that computers can perform a task by taking in data and make a decision on its own
- Example: self-driving car consumes traffic data via cameras and makes a decision to change lanes
Machine Learning: Produce Predictions
- A sub-section of AI where computers are given data, “learn” from the input data and generate results. This is most often performed under analyst supervision
- Example: a bank uses customer history data to predict which offers or products individual customers are more likely to respond to
Data Science: Produce Insights
- A discipline that combines business domain knowledge and statistics to gain insights and knowledge from any type of data
- Example: an analyst grabs data, puts it into an organized format, and visualizes it in a consumable format for business users to identify patterns and trends
Why is this important to my middle-market business?
If these methods are still intimidating or don’t make sense, have no fear. Skills are becoming more widespread and technologies have been tailored for users often referred to as “citizen developers”. Vendors like Microsoft and Alteryx have developed solutions that have drag and drop functionality and other low-code capabilities that can be scaled and deployed quickly by business users with machine learning experience. In other words, advanced analytics methods are no longer only within the reach of large businesses and can be implemented by organizations of all different sizes and industries. As an added bonus, this type of analysis can sometimes be established faster and with less process change compared to other enterprise data initiatives.
How will this benefit my organization?
Advanced Analytics can be implemented and deployed in a myriad of ways. These six benefits to middle-market organizations are common:
- Improved Decision Making – Historically, decision making in business has been done by gut feel developed over time with years of experience. Implementing Advanced Analytics provides the ability to predict business outcomes sooner and gives business leaders an edge to stay ahead of the curve
- Automation of Tasks – Instead of spending so much time downloading data, organizing it manually, and re-doing calculations time after time, you can spend your time actually looking at results and making decisions
- Target the Right Customers – Advanced analytics will help target the right customers with products and offers that match more closely to individual customer profiles. Companies reach consumers on a personal level and see a huge increase in return on marketing expenditures. Organizations can predict and respond to customer churn much more quickly than ever before
- Optimize Processes – With an understanding of business constraints, business leaders can find their process bottlenecks quicker to optimize profit, labor, production, yield, you name it!
- Identifying and Mitigating Risk – A common use of advanced analytics is to identify suspicious transactions and fraud across the financial services industry
- Improved Forecasting – Both private and public companies are more likely to have their expectations align with actual results to make strategic decisions accordingly
Advanced analytics is not something that is only available to large firms with vast financial and human capital resources. These methods can be started and implemented within a short period of time by middle-market firms where a large number of organizations are already seeing benefits. These types of advanced analytics provide any organization a competitive advantage in its respective marketplace. By using data as an asset to gain deeper insights, companies can become more flexible and agile as decision accuracy is improved and changes in consumer preferences are anticipated.
Delivering a tailored advanced analytics platform for your business is one conversation away. To learn more about how RSM can support your advanced analytics and reporting needs, please visit our website, call 800-274-3978, or email us.