How to derive value from data: First, know what will make your business great

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Most great data will already exist in a business, but every now and then it must be made from scratch.

In an interview with the MIT Sloan Management Review, Jeanne Ross, the director and principal research scientist at the MIT Sloan Center for Information Systems Research, was asked how a business can derive value from data, a question every executive must ask him or herself daily. Her answer should be printed out and placed on every IT pro's desk.

"First of all," she said, "you have to know what is going to make you great. If you want to run yourself as a company that is data savvy, information savvy, analytics savvy, you need great data about your business."

Note: she says you need to know what makes your business great or what will make it great before you jump on the analytics bandwagon. If you already know what makes your company great, it will be easy to identify and exploit the great data associated with that part of your business.

I agree. Take, for example, Centrica, a UK-based integrated energy company. It faces the problem of every utility in the world: deliver energy to customers at the lowest possible cost. While managing costs is an issue for every business, it's absolutely critical to energy companies that confront extremely volatile markets in a highly regulated industry. Great data to Centrica, then, comes from business processes that give insight to how costs are incurred.

In one key new area of innovation, the company has deployed smart meters to its customers, creating new business processes and data. Gavin Targowski, Centrica's Head of Information and Integration Architecture, says applying analytics to the real time information flowing from the smart meters into its SAP HANA in-memory database now gives them the ability to "change the way we approach existing business problems." Analytics applied to the new data let Centrica discover and correct inefficiencies, he says, "effectively taking cost out of the business."

Most great data will already exist in a business. It just has to be found. But every now and then a business has to go out and create its own great data from scratch.

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