Analytics is becoming a competitive edge for organizations. Once a “nice-to-have,” applying analytics is now becoming mission critical.
An August 6, 2009, New York Times article titled, “For Today’s Graduate, Just One Word: Statistics” reminds me of the famous quote of advice to Dustin Hoffman’s character in his career breakthrough movie The Graduate. It occurs when a self-righteous Los Angeles businessman takes aside the baby-faced Benjamin Braddock, played by Hoffman, and declares, “I just want to say one word to you – just one word – ‘plastics.’” Perhaps a remake of this movie will be made and updated with the word analytics substituted for plastics.
This spotlight on statistics is apparently relevant, because the article ranked in that week’s top three e-mailed articles as tracked by the New York Times. The article cites an example of a Google employee who “uses statistical analysis of mounds of data to come up with ways to improve (Google’s) search engine.” It describes the employee as “an Internet-age statistician, one of many who are changing the image of the profession as a place for dronish number nerds. They are finding themselves increasingly in demand – and even cool.”
The use of analytics that include statistics is a skill that is gaining mainstream value due to the increasingly thinner margin for decision error. There’s a requirement to gain insights and inferences from the treasure chest of raw transactional data that so many organizations have now stored (and are continuing to store) in a digital format. Organizations are drowning in data but starving for information.
Substantial benefits are realized from applying a systematic exploration of quantitative relationships among performance management factors. When the primary factors that drive an organization’s success are measured, closely monitored and predicted, that organization is in a much better situation to adjust in advance and mitigate risks. That is, if a company is able to know – not just guess – which nonfinancial performance variables directly influence financial results, then it has a leg up on its competitors.