One of the most fashionable buzzwords now is ‘analytics’ – you’ve probably come across this in a work context, when you are out and about, or you may have come across it online, where it has been a particularly hot topic.

To help bring to life analytics and showcase its potential, the Capgemini OR team is kicking off a 4-part FiO blog series focussing on specific analytics techniques.  In the run up to this, we look at the what, why and who of analytics for a quick overview. This introduction to analytics will set the scene for upcoming blogs in the series.

Analytics defined

Let’s start with Wikipedia’s entry on ‘analytics’ for a definition:

“Analytics is the application of computer technology, operational research, and statistics to solve problems in business and industry.”

Hmm, catchy. But as it stands, this definition falls somewhat short of defining analytics and really is just a list of methodologies. The idea of problem solving is also a little simplistic too. So let’s turn instead to a Capgemini and Informs (Institute for Operations Research and the Management Sciences) study that discusses analytics and its potential, to offer a bit more context:

“Analytics, in the form of business intelligence, is a set of technologies, processes and techniques that use data to understand and analyze business performance and guide decision making.”

So, we all know about the large amounts of data that companies have and collect (big data). In a nutshell, companies can use analytics to review their data, identify trends and formulate insights from it. Analytics won’t solve problems by itself – rather the insights provide an evidence-base for making business decisions.

So what’s all the fuss about?

Harvard Business Review and Gartner named the use of analytics as one of the top 10 business trends of 2010 (Top 10 strategic technologies)  and the worldwide spend on Business Intelligence, Analytics and the Performance Management Software Market surpassed $10 Billion in 2010, up 13.4% from 2009 (Gartner).

In fact, the amount of data generated globally is reaching mind boggling proportions (Economist data revolution).  For organisations that collect this raw data, making use of it in such a way that the organisation stands to benefit is a key challenge i.e. turning inert data into information that can be acted upon. Volumes of data collected are expected to rise by 44 times between 2009 and 2020 – so what remains to be seen is, will the usage of this data keep pace, allowing companies to realise the benefits of data more, or will companies simply continue to collect data because they can?

Figure 1: Forecast of Data Volume Generated Worldwide, 2009-2020 [1]


 [1] IDC Digital Universe Study, Sponsored by EMC, May 2010

With more and more data being generated, it makes sense that organisations do more and more with it.

Business and industry leaders are all trying to give their companies a competitive edge by using data in the most effective way, transforming data into information and intelligence on which they can act. This is where analytics plays a vital role.

Meet the Analysts?

Large companies are continually investing in specialist analytics capabilities (whether in-house or by employing consultants)  to harness the data they are collecting – using information and intelligence gleaned from the data to help inform marketing strategy, understand and retain customers and better position themselves in the future.

Capgemini research, commissioned on behalf of the OR Society, sets out to understand the size of the analytics market within the UK, and the needs that analytics practitioners have within it. At industry level, this paper looks at analytics usage now and also projects where analytics is likely to be most attractive going forwards.  It describes three categories of analytics: descriptive, predictive and prescriptive, with the last classification utilising the most complex tools and techniques. Different OR techniques feature in the three categories, described below.


This also broadly agrees with the Capgemini and INFORMS study, concluded last year, to investigate the use of analytics across various organisations in the US. The findings have helped INFORMS to define the various types of analytics in use within companies – and concludes that a large number of organisations are at low maturity level in analytics.

So, with the rapid rise of the analytics market, many organisations have realised they are playing catch-up in terms of developing the abilities to convert the copious amounts of data they collect into usable assets. OR is finding increasing popularity in helping organisations create real value from these data pools, preventing them from turning into the corporate equivalent of a magpie’s nest – full of attractive bits and bobs but without clear purpose. 

If you want to know more about analytics and what it can do for you and your clients, or if you wish to find out a bit more about the Capgemini studies with the OR Society and INFORMS, please contact Nigel Lewis on 0870 904 3947, or