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The comparatively new capability of data analytics technology has produced profound impacts on businesses. [1] IT and other skilled technology professionals at innovative firms such as Google, Tesla and Uber, have leveraged the power of data analytics to break into new markets, build stronger relationships with consumers, and streamline processes such as supply chain and marketing management. Reports from business consultants such as the International Data Corporation reveal that revenues will near $200 billion for firms that exploit data analytics. The consulting firm forecasts that the manufacturing industry alone will generate $39 billion by taking advantage of data technology.

It’s no wonder that enterprises of all sizes are taking steps to access the invaluable insights made possible by data analytics. The technology has profoundly impacted businesses, because of the potential it holds for improving organizational performance. The following four points illustrate the power and impact of data analytics on business.

Data Is Becoming a Business Staple

The Corporation Service Company (CSC) Global Chief Information Officer (CIO) Survey discloses that 64 percent of leading firms invested heavily in data analytics technology between the years 2014 and 2015. [2] Of nearly 600 executives interviewed for the survey, 75 percent report the technology has produced positive outcomes for their organizations. Sixty-nine percent of respondents view data technology as a high priority objective. Seventy percent of those executives stated the technology enhanced business innovation. Based on these results, data and data analytics have made, and will continue to make, a marked impact on the business world.

The Technology Fuels Innovation

Rolls-Royce Motor Car Limited successfully applied data analytics to improve operations in its aircraft engine manufacturing business unit. The enterprise implemented data technology for the monitoring of nearly 3,700 aircraft engine sensors that check for impending failure. By doing so, Rolls-Royce was able to launch a new monitoring service, and establish customized service fee schedules based on client usage. Today, this service generates 70 percent of the firm’s revenue.

The well-known retailer, Walmart, is another success story and a frontrunner in data analytics with its proprietary Retail Link product tracking system. Using the resource, Walmart established a means for suppliers to manage inventory levels of the products they sell to the retailer, which streamlined inventory management and eliminated the risks associated with holding excess stock.

Data Improves Resource Allocation and Departmental Collaboration

Data collection and analysis that is based on information technology enhances collaborative activities within enterprises, allowing business units such as management, finance and operations to work together with increased efficiency. The technology quickly delivers critical information to decision-makers, allowing organizational leaders to delegate tasks effectively and keep an enterprise moving toward its objectives. In turn, firms can increase the performance of their labor force and allocate resources efficiently.

Although data analytics technology produces substantial improvements, many firms have not adopted the resource. For example, the manufacturing sector remains rooted in traditional practices and has been slow to incorporate new technologies. Many of the current technologies used by these enterprises are expensive, custom-made resources, which explains why manufacturing firms are hesitant to replace them with relatively inexpensive, newer data resources. Additionally, manufacturing logistics are significantly more complex compared to other industries that have been quick to adopt data analytic technology. Manufacturers cannot test data analytic technology in live operating environments, because lengthy shutdowns or major production flaws can potentially put firms out of business.

Data Career Opportunities Are Expanding

There are increasing opportunities of data information technology (IT) specialist in the U.S. In fact, a recent report from the McKinsey Global Institute concludes that by 2018, the U.S. economy could face a shortage of up to 190,000 data scientists with advanced training as well as 1.5 million managers and analysts with the proficiency to use big data. [3] Whether for complex manufacturing logistics integration, or to develop metrics for a service offering, firms that want to adopt the technology need the skills and knowledge provided by data specialists. This is especially true in the $11 trillion manufacturing sector, which is the slowest industry overall to attempt to adopt data analytics technology. With manufacturing sector revenues in the multi-trillions of dollars, data technology could make a tremendous impact toward improving the profits of U.S. manufacturers.

Firms in the U.S. produced 80 percent of the world’s software, and lead production in data analytics technology. Since the early 2000s, U.S. manufacturers have experienced a 30 percent increase in production. Due to this improvement, nearly 60 percent of manufacturers in the U.S. are considering bringing their production operations back to America. With technology innovation and business growth continuing to expand, it seems the future for data analytics specialists looks to hold many opportunities.

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Information means more than knowledge, it means solutions. When technology, people and information intersect, society and industry benefit. You can harness the power of information with our online Master of Information degree at Rutgers University.

Recommended Readings:

How Data Is Stored And What We Do With It
The Future of Big Data: Data Wrangling
7 TED Talks For Students of Data and Information Science