Create a digital Versailles for your company with data analytics2020 09 16
At the end of the summer, the Dow Jones Industrial Average, one of the best-known stock market indexes in the world, underwent its biggest change in the past 13 years. The US energy giant ExxonMobil, which had remained on the prestigious index for 92 years, was replaced by the technology company Salesforce that has been operating for only twenty years. This represents a strong signal that the market’s priorities are changing and that technology companies are becoming increasingly important.
The five largest technology companies are already generating close to 900 billion dollars in revenue, which is comparable to the gross domestic product of countries such as the Netherlands and Saudi Arabia. These changes call for a closer look at the success strategies of the technology giants, which are based on state-of-the-art methods incorporating data analytics.
“Data analytics is a field that is currently growing more and more important. Some businesses understand this development and have begun taking advantage of its possibilities. As a result, there is a need for a tool that helps to manage the chaos of data and turn it into an impressive digital landscape – the Versailles of Data. Data analytics is just such a tool,” said Irmantas Bankauskas, CSO of Baltic Amadeus.
The need for data analytics became even more apparent at the start of the pandemic, when businesses in various sectors had to switch to the digital sphere. This need will only get bigger due to the increasing amount of data that has to be processed. According to statistics from EY, the amount of data created in 2013 was 4.4 zettabytes (a trillion gigabytes), while in 2020 this number grew to reach 44 zettabytes. In other words, the amount of data created globally is doubling in just two years. Newly developed systems are uncovering not only new possibilities but also huge quantities of data, so the management and proper use of this data has become a challenge. Many companies are wondering how to avoid chaos in the data ecosystem and how to create a solution that will benefit their business.
From data chaos to a modern data warehouse
Bankauskas stressed that a data ecosystem can take many forms – it can be scattered, where the data is collected manually and stored in different systems, as well as being structured and centralised. “During the process of creating their digital landscape, a company can store valuable information and data in various forms. It is therefore important to find a solution that is the best suited and rewarding for each individual company. Our goal is to turn the natural chaos of data flow into a park – a structed and useful system that operates under rules which are understandable and supportive of the business,” the Baltic Amadeus CSO told us.
The digital landscape that helps us to manage and use the digital ecosystem can be implemented in various ways: as a data lake, data cloud or data warehouse. The latter method of storing and processing data has always been the most popular in the business world. However, Bankauskas suggests that its application possibilities are very limited. A traditional data warehouse without advanced data analytics can only generate traditional reports based on descriptive analytics (by examining the past) and diagnostic analytics (by understanding the reasons for past events).
“Modern businesses have to deal with competition, economic uncertainty and the changing needs of customers on a daily basis – that is the constant dynamic of the business community. Therefore, companies are always looking for innovative ways to increase the meaningfulness, reliability and value of their data. This is a job for predictive or prognostic analytics, which has been developed to establish the likelihood of future events, and advisory analytics that provides recommendations for future actions,” the expert explained.
According to Bankauskas, these functionalities are offered by a modern data warehouse, where the application of breakthrough technologies such as artificial intelligence (AI) and machine learning (ML) is enables. Modern data warehouses primarily give companies modern tools to forecast future trends, thereby making a data collection truly valuable.
Shaping the data landscape is not just an IT Department’s concern
As is shown in the practices of the most successful technology companies, it is not sufficient to just have a technology solution in order to create actual value from the data chaos – instead, the company needs to change its entire approach. Effective and useful data management is a strategic corporate decision that surpasses the boundaries of a typical upgrade to the technology system. For it to be successful, the data must be used in a manner that is integrated with the company’s processes, so a separate role has to be created that involves the chief executives. In this way, the separate processes of the company can be joined in a unified system.
“Data management, data analytics, data economy – all of these are future trends. Data is already one of the most important products, so if a company does not manage its data, it is simply wasting resources. The time when digital issues were only the concern of the IT Department are over. A successful future business requires all of its departments to understand the importance of data, and to proactively use data as a resource,” said Bankauskas.
The results from centralised and innovative data management systems based on advanced technologies and data analytics speak for themselves. Companies feel that they can control their processes better due to having broader accessibility to data that is convenient to use and compatible with different elements, while the process is more efficient. This enables a company to change from looking at the past to looking into the future, and to see with a future vision.
“I suggest looking at data analytics not as an additional tool to facilitate current processes, but as a tool that will ensure the success of future processes. In this way, data analytics changes the focus of a business from the past to the future, by providing both forecast information and advisory functions,” Bankauskas explained.
Data analysis can reveal a new business direction
Today, the large potential of processing data is still being employed ineffectively. As is shown by data from a study conducted by the Harvard Business Review, 91 percent of CEOs in international businesses consider data and analytics to be a key component in their business transformation; however, 80 percent of CEOs also admit that improving the maturity of data analytics in their company is difficult. This is due to a number of issues: inaccurate and insufficient data, outdated technologies, a lack of self-operated business analytics tools, and decision-making based on intuition and expert opinions rather than data.
According to the Baltic Amadeus CSO, advanced technologies (AI, ML) provide us with opportunity to test not only people’s intuitions but also expert opinions. It is often the case that data analysis shows that beliefs which have been considered as undisputed truths for many years are no longer valid, while revealing new trends that are fundamentally changing the direction of a business. The recent changes in the Dow Jones Industrial Average and the constantly growing earnings of technology companies are prime examples of the variations taking place in many decade-long trends. Successful companies are those that employ data to generate forecasts based on facts.
“Right now, the best advice would be to admit we have reached a key turning point – expert opinions and authorities are now being replaced by facts and analyses that allow companies to respond to their customers’ needs and to grow,” said Bankauskas, emphasising that any company can make a strategic decision to employ the available data to turn the existing chaotic landscape into an impressive Versailles of Data.
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