Business
analytics and Big Data help improve Customer Experience (precise customer
segmentation , interaction & servicing: increased loyalty & retention, Operational
Efficiency (Increase transparency, Resource Optimization, Process Quality and
Performance) and developing new business modes (expanding existing or
generating new revenue streams).
Data
becomes big data when its variety, volume or velocity exceeds the ability of traditional
IT systems to ingest, store, analyze and process this data. Big data requires
often a both technical and cultural change.
Traditional
tools work on enterprise data captured in the data warehouses. Additional
statistical analysis, data mining, text mining and predictive analytics takes
now usually place on separate, dedicated servers. The process of exporting and
creating copies on external servers is time consuming and becomes infeasible
when data amounts become too large.
So let us
talk about Prescriptive Analytics in relationship with Big Data.
Available tools
make predictive analysis increasingly manageable. It is not only domain for
data scientist any longer. One click predictive modelling automatically run a
series of algorithms on the data and select the one with highest accuracy.
A number of challenges still remain and require
respective actions:
-
Explore
and discover what data you really have and how these data sets relate to each
other.
-
Develop
insight through a process of experimentation and iteration you gradually.
-
Mine
the data to discover patterns and relationships
-
Determine
how such data relates to the traditional enterprise data
-
Simplify
the process to implement and automate the necessary actions.
-
Minimize
data movement to conserve computing resources (ETL architecture becomes with less
efficient with increasing data amounts)
-
Use
intuitive discovery, BI tools and In-database analytics; use Hadoop for
pre-processing data to identify macro-trends and special information (such as
out of range values)
-
Enable
decision making and informed action based on predictive modelling, business
rules and self-learning.
A systematic step-by-step view on process can help companies:
1.
Identify
and gather data relevant to the business goal from a variety of sources across
data silos in enterprise applications and external sources (social media,
public, licensed). Use visualization tools to ease work.
2.
Prepare
the data. Integrate and enrich into an analytical data set: Calculate aggregate
fields, merge multiple data sources, fill missing data, strip extraneous
characters, etc.
3.
Build
predictive model using statistical and machine learning algorithms (depending
on type/ completeness of data available and level of prediction desired). Run
analysis on training data and use model to predict test data set.
4.
Evaluate
and assure predictive model is effective and accurate. It must predict the test
data set.
5.
Use
model in applications and deliver actionable prescription to business (predict
opportunity/ avoid negative event)
6.
Monitor,
improve and update model (adjust parameters of algorithms, add new/ more data)
There are
proprietary and open source programming tools. The Open Software Community is
strongly driving predictive analysis. The open source programming language R is
a widely used across the industry. API libraries in Python, Java and Scala are
available. Many BI platforms (Accenture, Deloitte, Infosys, etc.) already
include some predictive analytics capabilities.
IBM, SAS and
increasingly SAP are the clear leaders in predictive analysis tools.
IBM has the
most comprehensive set to build models, conduct analysis and deploy predictive
applications both on-premises and in the cloud. SAS provides data scientists
with an all-in-one visualization and predictive analytics solution, integrated
with R, Python and Hadoop. Other providers are RapidMiner, Alteryx, Oracle,
Alpine Data Labs, Angoss, Dell, Fico and Knime and Microsoft Azure Machine
Learning.
One major problem still remains: Much time and effort needs to be
spend in the data preparation (30 to up to 60 percent) when using data from
data ware houses. A main reason is that data is often stored without context. The
process integrating data from multiple databases become very complex. Modelling
the context takes another 20 to 30 percent. The following chart explains:
Traditional
companies such as SAS, IBM, Oracle and Cognos try to solve the problem leveraging
their computing resources and throwing “brute force” at it.
Another
option that online retailers and credit card companies use is to build
applications that store their own transactional context and then process that
data in batch after execution. The difficulties are: data volumes become large
and logging difficult (storage, overhead for the application, etc.). Difficult
to gain value from the data in real time. Still significant post-processing
occurs. Often it is not feasible to enable already to existing applications.
Another interesting
option, proposed by OpTier, would be to create transaction context through a
third party software application and build a single stream of data from
multiple sources. This is still an area that requires more research.
+++
To share your own thoughts or other best practices about this topic, please email me directly to alexwsteinberg (@) gmail.com.
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