27 September 2016
Predictive analytics and big data: Mining data to drive business advantage
Let’s cut straight to the chase; the key to obtaining value from big data is analytics. Data is, after all, the new oil. And analytics is the refinery. How are forward thinking organisations interrogating data to spot patterns, highlight problems, uncover opportunities and predict what’s about to happen next?
It was UK mathematician, Clive Humby - architect of the Tesco Club Card - who first compared data’s value with oil. “It’s valuable,” he said, “but if unrefined it cannot really be used. It has to be changed into gas, plastic or chemicals to create a valuable entity that drives profitable activity; so must data be broken down, analysed for it to have value.”
Since Humby set that comparison in 2006, the value of data has been increasingly eulogised. However, with this value being realised, the collection and analysis of data has become somewhat ‘bigger’. Today, it would be hard to find an industry that has failed to pontificate on the merits and opportunities of “Big Data”.
Beyond the hype
Last year, research giants Gartner ditched “big data” from its influential Emerging Technologies Hype Circle. But this wasn’t a prophecy of doom for big data. It was in fact, the opposite, moving big data past the ‘hype’ and into practice.
But what is big data? For many, the term often refers simply to the extraction of meaning from data, neglecting the actual size or complexity of the data set. As the volume, velocity, variety and even veracity of data continues to increase - and our ability to process it advances correspondingly - the very definition of big data may just be as volatile as its explosive growth.
Every organisation has access to a plethora of data sources. But 95% of the time what’s harnessed for analysis is internal, structured data – spreadsheets, CSV files, databases and XML files. Then there’s the external data (easily attainable or open data sets that can be simple to analyse) or even the unstructured data owned by the organisation (emails, surveys, and phone calls) that is occasionally brought to the fore too. All vast quantities of data… but big data?
Big data is often harder to find - unstructured, external data. But this big data - once collected, processed, queried and analysed - can be combined with more traditional sources to eke out useful insights and leverage business advantage. But where to start?
How to get started...
"The starting point for most big data projects is combining the data sources already being collected with new types of data previously unavailable or unusable. This combined data allows patterns to be spotted, to highlight problems, uncover opportunities and predict what’s about to happen next."
Think big. But start small.
Barrachd, part of Capita, is one of the UK’s leading business analytics consultancies, and we see the data challenges that face businesses on a daily basis. Before a company starts to harness ‘big data’ they need to ensure that they are making optimal use of the information that’s more easily accessible.
The starting point for most big data projects is combining the data sources already being collected with new types of data previously unavailable or unusable. This combined data allows patterns to be spotted, to highlight problems, uncover opportunities and predict what’s about to happen next.
This has a massive commercial implication, but it’s also key to more efficient and effective public services.
Barrachd have worked with a number of local authorities to pull together data from a range of services, including education, social care, health, police and housing to ensure support could be centrally based and tightly integrated to support the most vulnerable people in the community.
By doing so, we helped the local authorities spot patterns in their data that might otherwise have been missed. Furthermore, by automating processes in real time, we provided the ability to immediately analyse and review information as soon as it becomes available.
While one of the greatest issues for big data may be the operational silos that exist, the speed of access to relevant information is crucial too.
One of the UK’s largest Credit Union’s approached us to help them better understand their membership. Running a thriving credit union is a bit like balancing a see-saw. On one hand, you need plenty of savers in order to offer loans. However, on the other you need plenty of borrowers because interest payments fund dividends. To do this, you need to be able to answer questions quickly - How many loans are coming to an end this month? Who’s had a holiday loan, but hasn’t had one for two years? Who might need to save, or pay for their children’s higher education? All the data was there, they just couldn’t get it out in time to act. We created a fast and accurate way to create customer profiles that make it easier to reach out with personalised, timely offers.
This challenge is not unique to credit unions. Every CEO has to ensure the books balance, the pipeline is full, the promises are kept. While there is no such thing as a crystal ball, there’s always plenty of information available.
Barrachd also worked with a leading college to create a predictive model that aims to boost retention rates by identifying learners who are at risk of dropping out. The solution interacts with the college’s student records system to help managers and lecturers track attendance and activities, while also analysing demographics, course popularity and other external factors that affect learner retention.
At the end of the day, analysing data isn’t new. It’s been a source of insight since the Ancient Egyptians tabulated the Pharaoh’s grain stocks. These days, however, the data is just that bit bigger. But it’s not always the size that matters, but what you do with it that counts!
Accenture surveyed a cross section of business leaders on the subject, 89% of them anticipated that Big Data would revolutionise their operations - to the same degree that the Internet did.
Market intelligence researchers IDC predict that revenue from the sales of analytics applications, tools and services to mine that resource will increase more than 50% in just four years, from $122billion in 2015 to $187billion in 2019.
It’s not just commerce that will benefit from the Big Data revolution. Capita is already supporting its public sector clients in analysing the data they hold and using it to address increasing demand and shrinking budgets.