Advanced analytics has the potential to uncover otherwise unseen insights and outcomes. But more often than not organisations are using the tools to reinforce what they already know, according to SAP VP and chief analytics evangelist, Shailendra Kumar.

Kumar, who spoke to Which-50 following an industry roundtable in Sydney, says the real value of analytics comes from finding out “the things we don’t know we don’t know” but organisations are still struggling to trust the data.

“When you really do predictive analytics, most of the time you reinforce the fact that business was [already] thinking. Bit it is of no value because you already know that. Why would you spend a lot of money to find out something that you already know?”

“Analytics, in particular predictive analytics, is set to find out things you don’t know. And sometimes businesses actually take that on the other side and say ‘that’s not possible’. But that’s what the data is telling you. That’s what analytics is all about and people have to use that as an outcome and start working on it.”

An urgency in getting started will help build momentum, Kumar says, which is particularly important in an immature area of business where confidence can be low.

“If you are doing an analytics project, if it gets some good numbers early then there is no problem on sponsorship … The important thing is get some very very high value, key projects done at the initial level.”

Combine Prescriptive and Predictive

Kumar explained the interdependence of prescriptive and predictive analytics, a relationship which he says is still being overlooked.

“Prescriptive is inherently a part of predictive. And the reason for that is predictive tells you what is going to happen but you can’t do anything about it if you don’t know why that is happening.,” Kumar said.

“It is important for people to actually understand the reason behind [an outcome] and articulate it very well to the business so they can take action to avoid or force feed the outcome that they are looking to achieve.”

However, that connection is still missed in the industry, Kumar says, as organisations typically focus on the prediction, failing to recognise what is actually required to achieve the outcome.

Gartner has also urged organisations to combine prescriptive and predictive analytics to accelerate decisioning, offering similar advice in a 2018 report.

“The value proposition for analytics comes not only in predicting what will come, but also in responding in a way that drives specific, directed action which has an impact consistent with the business objectives,” the report said.

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About this author

Joseph Brookes is a writer for the Which-50 Digital Intelligence Unit of which SAP is a corporate member. Members provide their insights and expertise for the benefit of the Which-50 community. Membership fees apply. 

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