Why now is the time to get your team up to speed on what analytics can do

Ask 10 practitioners to explain analytics and you’ll get 10 different answers. The field is still evolving as people come at it from different backgrounds. But at its core, analytics is about replacing gut-based decisions with ones that are fact-based.

The challenge is that today’s “facts” are buried in enormous data sets. Leaders must work with all employees to pinpoint meaningful data and use the knowledge gained to provide a better product or service.

“It involves executives thinking quantitatively and asking the right questions,” says Dave Czerwinski, assistant professor in the Department of Marketing and Decision Sciences at San José State University.  

“No longer is it enough to have a small group of nerds hidden away crunching numbers in a room at corporate headquarters. Analytics now touches on and can transform every functional area of a business.”

Smart Business spoke with Czerwinski about the value of the business analytics certificate and how it can help companies maximize the value analytics provides.

What is business analytics?

Analytics is characterized by three phases: descriptive, predictive and prescriptive.

Descriptive analytics means understanding your business and its environment. It has been around for a while in the form of database reports and executive dashboards.

Predictive analytics means taking that same data and combining it with statistical modeling to anticipate what will happen next. This is where a lot of the action is right now in the analytics space.

Prescriptive analytics is the final and most important piece. It answers the following question: Given what we know and what we expect to happen, what should we do? Prescriptive analytics uses heavily quantitative methods to help businesses optimize their strategy and execution. While many businesses are getting up to speed with predictive analytics, it’s a more rarefied group that’s really firing on all cylinders with prescriptive analytics.

What’s an example of success achieved through analytics?

People think that Netflix put Blockbuster out of business because of the convenience of having a movie delivered to your house or streamed to your computer. But it wasn’t convenience that beat Blockbuster — it was analytics.  

People didn’t really mind going to the video store. What they minded was spending half an hour looking for a movie, often ending up with one they didn’t like. That’s the problem Netflix solved — and they did it with analytics.  

By analyzing customers past rentals and ratings, and those of customers with similar tastes, they help customers find the next movie to rent. Blockbuster was sitting on all the rental histories of their customers too. But they never used it to help their customers. It just wasn’t part of their culture.

What’s the profile of a person who can benefit from a business analytics certificate?

The skills are more role specific than industry specific. Individuals who develop business analytics skills will be employed in white-collar positions at all levels of management. Certainly those in upper management positions responsible for converting data into strategy would benefit. But just as surely, entry- and mid-level managerial personnel would benefit from such skills since they are often responsible for data accumulation and architecture as well as data analysis.

Why is now the time to get people trained on analytics?

Organizations know that their success increases to the extent that they are able to tap data by developing metrics, models and processes that enable them to make data-driven decisions. A premium will be paid for individuals who can deliver, particularly since business analytics positions are expected to increase by 22 percent by 2020. McKinsey & Co. expects a shortage of between 140,000 and 190,000 professionals with deep analytical skills by 2018.

Dave Czerwinski is an assistant professor in the Department of Marketing and Decision Sciences at San José State University. Reach him at (408) 924-1000 or [email protected].

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