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The growing need to quickly employ big data to gain business advantage is a big deal, according to a new report from the Economist Intelligence Unit.

The SAP-sponsored report “The Power of Fast Data” relies on surveys of more than 750 senior executives worldwide. Conducted in 2012 and 2013, the survey assessed the abilities of companies to analyze data sets, use data to identify trends, discover data-driven insights and act on them.

Needs by Level

Each level of management, the report points out, has its own data analysis needs – the top C-level needs a view of the industry and of company-wide opportunities, middle managers want operational and practical insights, and line-level employees need information on, say, reducing manufacturing defects or improving sales.

Nearly 20 percent of respondents to the 2013 survey felt that their company’s data sifting capability is inadequate to some degree, up several points from 2012, and the percentage assessing their ability to use data as “industry leading” or “competitive” dropped to 40 percent from 50 percent over the same period.

The report notes that several factors could be affecting this diminishing sense that companies are ready for the task. It’s not so much budget, as nearly 15 percent fewer respondents now see budget as a primary obstacle, but a larger portion than in 2012 point to a lack of trained personnel. There also appears to be a better sense of the challenges needed to use big data to its fullest.

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From the report, "The Power of Fast Data"

For instance, not all of the workforce, even in companies with fairly sophisticated data analysis operations, have access to the data or have the skills/training to utilize it. Such a dissemination requires companies to quickly move selected data to those who need it, a substantial cultural shift from the old days, when vital data remained locked up in the top levels of management.

But What Speed?

“Put simply,” the report says, “data must move within organizations at a velocity that matches – or, indeed, exceeds – the speed of business.” In other words, analysis of big data across an organization requires overcoming traditions, implementing technology, managing ever-increasing data streams, settling on data visualization approaches, and making sure employees have the necessary skills or training – all at the same time.

What are key reasons this analysis of data is needed? The report points to the needs for making more effective decisions, avoiding missed opportunities, managing risk, controlling costs and responding to competition. Other top reasons include working more effectively with suppliers and customers, addressing regulatory concerns and empowering employees.

Regulated industries, such as Amtrak, appear to have executives with a better understanding of how to leverage data, apparently because such companies are accustomed to collecting and using data for compliance. Larger enterprises and telecommunication/technology companies are also better at the task.

Driven by Data

Although the report title indicates speed, the study itself is fairly vague about how fast is fast enough. On a practical level, it says, “the need for speed varies within organisations,” such as the real-time need for credit-card fraud but an acceptable slower rate for the status of a job application. The report does address, however, respondents’ views on the factors affecting the ability to analyze and act on data, with leading ones being the availability of data, the user’s role in the organization, the nature of the work involved and the design of the data analytics applications.

Several case histories of company-wide data use are mentioned, including OfficeMax, which uses data patterns to inform decisions about product placement, pricing, promotions, supply chain management and customer satisfaction. PayPal, to give another example, employs data-derived insights to get a quicker understanding of customer purchasing habits and a better ability to provide targeted marketing offers to customers.

The evolution of big data analysis in companies has quickly proceeded from an available, specialized ability to mine data stores, to the current requirement that trend assessment, customer behavior, personnel usage and inventory management be managed in an up-to-the-moment fashion that no longer relies on guesswork.

Like web sites, marketing suites and mobile presences, data analysis and usage are now an intrinsic part of the business world, especially as data analysis tools become easier to use by non-analysts. This report, while finessing how fast is fast, is very convincing about why every business is now driven by data.

Image courtesy of Auttachod35 (Shutterstock)