Gartner Says More Than Half of Large Organisations Will Compete Using Advanced Analytics and Proprietary Algorithms by 2018
Analysts to Explore Advanced Analytics Trends at Gartner Business Intelligence, Analytics & Information Summits 2016
Gartner predicts that by 2018, more than half of large organisations globally will compete using advanced analytics and proprietary algorithms, causing the disruption of entire industries.
"Advanced analytics has already been changing entire industries for over a decade and is a key factor for how most new entrants disrupt established markets and beat their incumbents — whether selling books, renting movies, borrowing money or even building a professional sports team," said Jim Hare, research director at Gartner.
"Today, with fewer regulated monopolies and the Internet eliminating geographical boundaries, more companies are starting to use statistical analysis, predictive modelling and decision optimisation to compete, instead of using traditional approaches."
Mr. Hare said that to survive in the new digital economy, end-user organisations and vendors will both need to accelerate the shift in focus of their investments from measurement to advanced analysis or risk being left behind. Leading organisations are developing proprietary algorithms that can lead to faster, more insightful analysis and are moving away from "gut feel" decision making.
Other new predictions that Gartner has made about advanced analytics include:
Through to the end of 2018, a minority of organisations will have a rigorous approach to demonstrating the trustworthiness of their analytics algorithms.
Gartner believes the trust factors influencing the ethical use of analytics are identifiable — transparent, accountable, understandable, mindful, palatable and mutually beneficial. Unfortunately, these underlying factors of fostering trusted business relationships based on data are seldom given much, if any, consideration.
"The resulting business, social and ethical impacts arising from the use of data and analytics are understood by few, ignored by many and tracked by virtually no one," said Alan Duncan, research director at Gartner. "The resulting impacts are tangible — unrealised business opportunities, additional inefficiencies, increased brand risk and even criminal proceedings."
Mr. Duncan said that leading data-driven organisations will increasingly recognise the causal relationships between data, analytics, trust and business outcomes. Those organisations that choose proactively to govern these ethical impacts will be able to foster more productive and trusted relationships with their customers, suppliers and employees; drive increased competitive advantage and brand loyalty; and maximise their market share in comparison with competitors that do not address these issues.
By 2018, algorithm marketplaces will be combined with Platform as a Service (PaaS) to boost advanced analytics and enable secure sharing and monetisation of raw data.
Gartner believes that advanced analytics could provide significantly more benefits if there was more sharing of detailed, event-level data. However, this so far is hindered by significant licensing, trust and data integration issues. The solution will be the combination of algorithm marketplaces and PaaS-runtime environments, where only specifically certified functions are allowed to process the secured data.
"Today's situation of sharing data is problematic," said Alexander Linden, research director at Gartner. "Data providers don't typically trust end users with detailed, event-level data. On the other hand, data consumers do not like the involved complexities of data licensing and data integration. As a result, there is a significant impediment to sharing and monetising data."
Within three years, Gartner expects technology to be available that can radically simplify the trust, licensing and data integration challenges, by placing controls on the algorithmic data processing. Only certified components will be able to run sensitive data and transform it into scoring and optimisation models. In essence, the data processing will be constrained to ensure that the underlying detailed data cannot be copied, saved or reverse-engineered.
More detailed analysis is available for Gartner clients in the report "Predicts 2016: Advanced Analytics Are at the Beating Heart of Algorithmic Business." This research note is part of Gartner's Special Report "Predicts 2016: Algorithms Take Digital Business to the Next Level" a compilation of 85 reports focused on the top predictions and actions that will enable organisations to shape their digital future.
Gartner analysts will provide additional analysis and information on the outlook for BI and analytics at the Gartner Business Intelligence, Analytics & Information Management Summits in Sydney, Australia, Sao Paulo, Brazil and Mumbai, India and at the Gartner Business Intelligence & Analytics Summits in London, U.K. and Grapevine, Texas. You can follow news and updates from the events on Twitter using #GartnerBI.
Gartner UK Ltd
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 7,600 associates, including more than 1,500 research analysts and consultants, and clients in 90 countries. For more information, visit www.gartner.com.