Professional athletes use data analytics for work, even when players are off the job. Every team in the NBA has data analysts on staff. Coaches use the technology to pick the best new recruits. Some players wear monitors when they’re asleep to track the effects of fatigue. Whether in professional sports or shipping, analytics has transformed how organizations learn about their own performance.
Private companies are embracing analytic insights with enthusiasm: In Deloitte’s most recent global survey of private companies, 62 percent of respondents said they’re using technologies such as predictive analytics to increase efficiency, while 46 percent of respondents say the technologies help them improve customer engagement. Yet one of the biggest challenges for private firms is finding the right people to put data-related technologies into action. In a Deloitte survey of CIOs about the technical skills that will be most difficult to fill over the next three years, analytics and data science are at the top of the list. Companies that can attract data scientists will put them to work on projects such as immersive analytics - which not only pinpoints digital information but provides a mixed-reality view of the assets - helping companies further elevate their understanding of the data that surrounds them.
The shortage of professionals who are proficient in analytics is a persistently tough challenge for private companies as they consider technology investments. The technologies can offer amplified intelligence that leads to faster transformation; the solutions are more powerful than those of prior generations; and, cloud-based access makes them less expensive to acquire. But the competition for data scientists who can manage the technology is fierce. Job postings for data scientists on the US platform Indeed.com increased 75 percent from 2015 to 2018. Meanwhile, annual salaries for data scientists at large consulting firms can approach hundreds of thousands of US dollars for candidates with doctoral degrees.
“Even though the technology is getting cheaper all the time, people who really understand the technology are becoming more difficult to hire,” says Tom Davenport, professor at Babson College and independent senior advisor to Deloitte Analytics. “Private companies may have a hard time getting those people and even when they can get them, they’re going to have to pay them a lot,” says Davenport, who wrote a frequently cited Harvard Business Review article on the job outlook for data scientists. Another challenge is prioritizing the data on hand. Every minute of every day, there are more than 3.8 million Google searches, for instance. Enrico Cianci, senior manager, Deloitte Italy, says private firms can’t afford to overwhelm limited resources if they intend to boost their analytics capabilities.
“Companies have to think about the kinds of data they need to avoid information overload,” Cianci says. “Rather than collecting more data, use existing data in a more highly targeted way.”
Data security is another area that requires prioritization, according to Davenport. With the continual threat of cyberattacks, he points out that companies need a response that includes analytics as a first line of defense backed with human judgment to attack the problem.
“We don’t really have any choice but to start to use analytics to predict threats and respond to them,” Davenport says. “And if we have a hack or breach that needs to be investigated, that still requires human intervention. There’s really no choice but to start moving down this road, given the number of potential threats every company faces.”
The opportunities to achieve stronger business outcomes through analytics are vast. Private organizations are using realtime analytics on global supply chains to manage unpredictability, forecast demand, and handle supplier issues. Companies are using analytics capabilities such as text recognition and machine learning to decipher data in financial records. Manufacturing firms are using analytics to better predict when physical assets need servicing.
Francesco Sagrati, a manager for Deloitte Italy, sees several main areas of opportunity: gathering information about markets; supporting marketing research; improving internal processes; and, product development. “Analytics helps mid-market companies create accurate forecasts, model business scenarios, and reach outcomes more quickly than before,” Sagrati says.
Accuracy and speed are two advantages private firms can seize as they invest in prescriptive analytics, according to Davenport. Prescriptive analytics technologies can advise sales staff on the optimal price to charge for products or services. Or in a manufacturing setting, the technology can alert staff about maintenance and repair schedules.
Davenport says another area of opportunity for private companies is establishing “data lakes” that are run on open-source software. In comparison to traditional enterprise data structures with information in rows and numbers, the “lakes” house information in unstructured formats - including videos, audio streams, and social media posts - and thereby allow for more diverse sets of data. “You can store anything in any format,” Davenport says. He adds that while data lakes are sophisticated undertakings for many private companies, “there are so many opportunities in analytics. You don’t have to be on the cutting edge to get a huge amount of value.”
Questions to consider
- Has your company performed a serious assessment of its readiness for analytics?
- How can you assemble a team with the appropriate mix of technical and managerial skills to be successful?
- In which business functions are you most likely to improve outcomes if you invest in analytics?
- How can your organization incorporate predictive and prescriptive analytics into its operations?
- Is your organization aligned around a common purpose and framework for analytics?
- Would you be able to change course quickly with analytics investments should conditions change?
“Companies need a response that includes analytics as a first line of defense backed with human judgment to attack the problem.”
Professor at Babson College and independent senior advisor to Deloitte Analytics
Private company issues and opportunities
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