Published in The Hindu – The rise of analytics
We are slowly, but surely, heading towards the age of “information overload”. The Sloan Digital Sky Survey started in the year 2000 returned around 620 terabytes of data in 11 months — more data than had ever been amassed in the entire history of astronomy.
The Large Hadron Collider (LHC) at CERN, Europe’s particle physics laboratory, in Geneva will during its search for the origins of the universe and the elusive Higgs particle, early next year, spew out terabytes of data in its wake. Now there are upward of five billion devices connected to the Internet and the numbers are showing no signs of slowing down.
A recent report from Cisco, the data networking giant, states that the total data navigating the Net will cross 1/2 a zettabyte (10 {+2} {+1}) by the year 2013.
Such astronomical volumes of data are also handled daily by retail giants including Walmart and Target and telcos such as AT&T and Airtel. Also, advances in the Human Genome Project and technologies like the “Internet of Things” are bound to throw up large quantities of data.
The issue of storing data is now slowly becoming non-existent with the plummeting prices of semi-conductor memory and processors coupled with a doubling of their capacity every 18 months with the inevitability predicted by Moore’s law.
Plumbing the depths
Raw data is by itself quite useless. Data has to be classified, winnowed and analysed into useful information before if it can be utilised. This is where analytics and data mining come into play. Analytics, once the exclusive preserve of research labs and academia, has now entered the mainstream. Data mining and analytics are now used across a broad swath of industries — retail, insurance, manufacturing, healthcare and telecommunication. Analytics enables the extraction of intelligence, identification of trends and the ability to highlight the non-obvious from raw, amorphous data. Using the intelligence that is gleaned from predictive analytics, businesses can make strategic game-changing decisions.
Analytics uses statistical methods to classify data, determine correlations, identify patterns, and highlight and detect deviations among large data sets. Analytics includes in its realms complex software algorithms such as decision trees and neural nets to make predictions from existing data sets. For e.g. a retail store would be interested in knowing the buying patterns of its consumers. If the store could determine that product Y is almost always purchased when product X is purchased then the store could come up with clever schemes like an additional discount on product Z when both products X & Y are purchased. Similarly, telcos could use analytics to identify predominant trends that promote customer loyalty.
Studying behaviour
Telcos could come with voice and data plans that attract customers based on consumer behaviour, after analysing data from its point of sale and retail stores. They could use analytics to determine causes for customer churn and come with strategies to prevent it.
Analytics has also been used in the health industry in predicting and preventing fatal infections in infants based on patterns in real-time data like blood pressure, heart rate and respiration.
Analytics requires at its disposal large processing power. Advances in this field have been largely fuelled by similar advances in a companion technology, namely cloud computing. The latter allows computing power to be purchased on demand almost like a utility and has been a key enabler for analytics.
Data mining and analytics allows industries to plumb the data sets that are held in the organisations through the process of selecting, exploring and modelling large amount of data to uncover previously unknown data patterns which can be channelised to business advantage.
Analytics help in unlocking the secrets hidden in data and provide real insights to businesses; and enable businesses and industries to make intelligent and informed choices.
In this age of information deluge, data mining and analytics are bound to play an increasingly important role and will become indispensable to the future of businesses.
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