The following is the fourth in a series of conversations about digital innovation and the intelligent technologies powering the Intelligent Enterprise, with Jeff Janiszewski and Ginger Shimp from SAP North America Marketing. In this blog, they discuss how analytics empowers enterprises to move forward.
Jeff Janiszewski: So far, we’ve discussed how data is gathered through the Internet of Things, and we talked about how all that Big Data is sitting on a cloud platform. Now we need to talk about how you can leverage that data with analytics.
Ginger Shimp: Have you heard the “Centipede’s Dilemma?”
A centipede was happy – quite!
Until a toad in fun
Said, “Pray, which leg comes after which?”
Which threw her mind in such a pitch,
She laid bewildered in the ditch
Considering how to run.
JJ: It’s a classic case of “analysis paralysis.” At first glance, the moral of the story seems to be that analyzing how you do business can be catastrophic. Is that true? And what about the inverse? Can a business or organization run on gut-driven decisions?
GS: When you think about it more closely, the centipede wasn’t paralyzed by a traumatic spinal injury . . .
JJ: Technically, centipedes are invertebrates, so that’s not even possible.
GS: Regardless . . . she was paralyzed by thinking too much. Had the centipede done some analysis in advance, she wouldn’t be pondering it in a moment of crisis. There would have been no paralysis and she would have had the confidence to move on to her destination.
JJ: Of course, it’s a fable. We’re not really impugning the decision-making process of centipedes.
GS: No, but that’s why we created the Searching for Salaí podcast. We don’t expect anyone to take that at face value either, but we do hope it gives people the opportunity to reflect on how technology impacts our lives.
JJ: And you do need to think about it a bit. In this case, for example, you can see that analytics isn’t about wallowing in doom and gloom; it’s about leveraging data to keep you moving forward.
GS: And to answer your question, no business today can operate completely on gut-driven decisions. Analytics are essential.
JJ: Ignorance certainly isn’t bliss. It’s critical to know exactly how your business operates, and what options or opportunities lie ahead. Analysis paralysis happens at a critical moment because you’ve failed to do the analysis in advance, and don’t know how to move forward.
GS: For example, On September 20, 2017, a Category 5 hurricane hit Puerto Rico, shutting down leading suppliers of IV fluid bags and saline. This sent ripples across the entire global medical ecosystem that had everyone scrambling. But some were better prepared than others. The question is whether you’d want to be the hospital or pharmaceutical company that had the analytics in place to deal with the crisis, or do you want to be the company working on gut instinct?
JJ: And it wasn’t just a supply chain issue. It fundamentally affected all parts of the industry. More pills were being dispensed in place of IV drugs, which had an impact on pharmaceutical manufacturing. Nurses had to spend more time with patients to administer “IV pushes,” which are more difficult and required more training and staff. And the FDA had to rush approvals for new manufacturers to take up the slack.
GS: There are really three basic types of data analytics: descriptive analytics, predictive analytics, and prescriptive analytics. Descriptive analytics is simply about turning raw data into useful information. It could be something as simple as counting the number of clicks on a link or perhaps tallying survey results. Predictive analytics involves taking that useful information and, through the application of statistical models and other methods, forecasting what’s likely to happen in the future. Prescriptive analytics goes one step further. It looks at those forecasts and attempts to find the best course of action needed to achieve a desired outcome.
JJ: Each of those steps brings greater understanding. Descriptive analytics renders information, predictive analytics provides knowledge, and prescriptive analytics gives you wisdom. Only when you achieve that level of wisdom can you move forward with confidence.
GS: This is what digital innovation is all about. It’s not about sitting on a pile of data or even routinely processing that data like you were making algorithmic sausage. When the data and knowledge for an enterprise is no longer operating in discreet silos but is seamlessly linked in a cloud platform, a business can move forward with confidence. It means that all those little centipede feet are moving in coordination.
JJ: And that’s what it’s is about. A set of coordinated technologies that gives decision-makers the wisdom to make great choices. Truly transformative and sustainable innovation happens when technology, people, and data are combined.
GS: And it’s particularly important to remember that people are a vital part of innovation. Descriptive analytics provides completely objective results. Predictive analytics is dependent on asking the right questions. But prescriptive analytics is there to enable thought leaders to use sound judgment when making those subjective decisions.
JJ: Going back to the previous example, suppose an East Coast pharmaceutical manufacturer is considering an opportunity to enter the saline business following in the wake of the Puerto Rican devastation. The number of variables that would go into that decision is inestimable.
GS: The pragmatic implications of the decision are legion, but there are moral questions as well. The new plant could mean that the Puerto Rican plant may never reopen, further destroying their economy, and it would be unseemly to profit on the misfortune of others but providing saline to those in need when there are shortages might mitigate that concern. Without question, this could be a paralyzing inflection point if it weren’t for the implementation of analytics.
To learn more about SAP Leonardo and analytics, visit https://sapinnovate.me/leonardo/.
For a more imaginative experience of how technology has become integrated into our lives, listen to our cool new podcast, Searching for Salaì. “Episode 4: The Art of Technology” is available now on Apple Podcasts. Catch up on past episodes and continue the experience at www.searchingforsalai.com.