Algorithms go well beyond only reporting data or dashboards.
Contributor: Christy Pettey
Information is vital to emerging digital businesses. The key to this information is to point it at opportunities to harvest real business value from insight. This has always been the value of business intelligence and analytics. In fact, Gartner’s 2016 CIO Agenda survey shows that analytics continues to be the top area for new technology spending.
Opening the Gartner Business Intelligence & Analytics Summit this week in Grapevine, Texas, Rita Sallam, research vice president at Gartner, and Frank Buytendijk, research vice president and Gartner Fellow, told the audience of data and analytics leaders that information is the life of business, and algorithmic business is the next generation.
“Information and analytics is not only about reporting or dashboards anymore,” said Ms. Sallam. “It will start to include critical algorithms as well. Algorithms will not only provide insights and support decision-making, but will make the decision for you and execute it on the spot.”
To understand what this all means, Ms. Sallam and Mr. Buytendijk looked at three areas:
Market Place – How Does the Distributed World Affect the Data and Analytics Marketplace?
On the demand-side, data and algorithms are enabling organizations to see a completely new level of detail on customers and the business – this is a complete disruption of industries.
“Some will know what they are doing, others won’t. There will be privacy and security issues. There will even be algorithm regulations from governments around the world, forcing transparency. But these parties don’t change the rules of the game. They create complete games of their own, transforming industries and creating new markets,” said Mr. Buytendijk. “Once these new markets are established, the forces of moderation will kick in again. The modern analytics platforms will offer governance mechanisms, security will be improved and new metrics of success will be established.

Gartner’s Frank Buytendijk discusses how data and analytics impact the marketplace during the Gartner Business Intelligence & Analytics Summit.
On the supply-side, technology acquisitions by end user companies are taking place across every industry. Gartner calls these “techquisitions” – the acquisition of digital and information technology companies by traditional enterprises who see the opportunity to be digital business leaders in their industries, not by licensing the software, but by taking a stake in the company.
Business Outcomes – How Can You Help Create the Best Possible Business Outcomes?
Delivering business value is a relatively new, but exciting, opportunity for most analytics professionals. Data and analytics leaders grabbing this opportunity recognize that the business outcomes are not in creating dashboards and reports. Mr. Buytendijk explained that better business outcomes come from making sure there is high quality data that can be shared and used internally in the organization, and externally with partners and customers, to help them improve their business outcomes.
“Analytics leaders of the future will make sure they have a clear mandate – business value,” said Mr. Buytendijk. “In the coming years, business value based on analytics is ready to explode through the use of automated algorithms.”
The Future – Algorithmic Business
Algorithms are where the real value lies. Making sense of all the data about how customers behave, and what connected things tell an organization, will require algorithms to define business processes and create a differentiated customer experience. In the public sector, for example, algorithms already determine everyone’s risk or fraud factor in the tax office.
Algorithms will also decide whether you get a loan, whether you qualify for a subsidy or whether you will be granted access at the border. In the future, Gartner predicts that 20 percent of all business content will be generated by algorithms.
What does this mean for data and analytics leaders? In the end, analytics is still a human business, dedicated to human understanding. The algorithms need to be designed, data provisioned, and governed. They only work in the business context for which they were built.
Ms. Sallam said algorithms are inevitable, and successful analytics requires an abundance of astute leaders distributed throughout an organization working to apply just the right technology and skill sets to their business domain to draw out the business value.
Video replays from the Gartner Business Intelligence & Analytics Summit will be available on Gartner Events On Demand. Follow news and updates from the Summit on Twitter at #GartnerBI.