Data Analytics as an Essential Tool for Decision Analysis

A good decision is one that is consistent with the alternatives, data, and desired values that are brought to the decision. Data analysis converts data into information that the decision maker can use to compare the different alternatives to the desired outcome. Data analytics can even uncover more alternatives and routes to reach the desired objectives.

In the modern world where we have access to Teradata, the decision maker cannot ignore technology to extract information from which the decisions ought to be made. It is imperative a union of the sciences of decision analysis and of big data analysis. Although big data analysis alone is more appropriate for automatic decisions, it also gives perspectives when the decision to be made is more at the corporation strategy level, where the decisions are normally made more out of policies and the intuition of the C-level professionals.

One data analytics technique that I see with more potential to influence the decision of the C-level professionals is Machine Learning. With Machine Learning we can get insight from a dataset. The Journal of Machine Learning Research defines Machine Learning as “the scientific study of algorithms and statistical models that computer systems use to perform a specific task without using explicit instructions, relying on patterns and inference instead. It is seen as a subset of artificial intelligence”. Although Machine Learning is much more extensive, in my case, I use Machine Learning as a Statistics tool to find correlations and explanations to results. What data is relevant to my objective? what determines a result? This gives me knowledge to be able to draw my decision analysis decision trees (not to be confused with ML decision trees) and influence diagrams to frame quality decisions. It is still Decision Analysis but with techniques that are adapted to our current flow of data and our current knowledge to analyze this data and convert it into decision. In these days, we not only have access to enormous amount of data, but this flow of data also comes at great speed.

Data Analytics allows us to help companies been more data-driven and less intuition-driven. The C-level professionals can make decisions based more on what they know and less in what they think. A technique such as Machine Learning can be critical to these data-driven/decision driven companies and those organizations that have the knowhow of making better decisions based on rapid analysis of the immense flow of information are the ones that are going to win. Let’s make, once and for all, Data Analytics an indispensable component of Decision Making and company strategy.

Javier Olivero - Olivestments