Formula 1 races are not won because of the size of the engine, or how streamlined the car is, or even the skill of the driver. The difference between winning and losing boils down to an unlikely racing strategy called Data Analytics.
Every Formula 1 (F1) car is armed with more than 150 sensors that track key performance statistics ‘in real time’ such as brake heat, tire pressure, fuel efficiency, GPS and wind speeds. These sensors are a ‘data source’, analysed in order to help answer relevant questions during a race, which ultimately gives the team a competitive advantage.
F1 Race Analysts use this data to decide when the car should stop for a pit stop. Would it be more efficient to do a pit stop at lap 12 or lap 13? And where seconds matter, the right answer is what leads them to victory.
While such large amounts of data generated by the car is key, the analytics that translates this data into actionable insights is what ultimately delivers the value during the race.
Your Business is just like a Formula 1 Racing Car
Your business generates lots of data, which can be used to answer questions that will give you a competitive advantage. Understanding how you leverage data analytics makes the difference between your company winning or losing the race.
Big Data and Data Analytics, The Distinction
F1 cars relay 2GB of data every lap, and 3TB of data during the whole race. Considering that there are 20 races per season, these cars generate more than 60 terabytes of data.
This is a huge amount of data. However, the race-time decisions are not driven by the amount of data, but rather by questions that need answers. This is the fundamental difference between Big Data and Data Analytics.
- Big Data is defined as high-velocity, high-volume, and/or high-variety information or data that require innovative forms of information processing to collect, cleanse, and be kept available for future use.
- Data Analytics is the process of inspecting this data with a specific purpose in mind to find answers that helps you make business decisions that are backed by evidence.
The sixty terabytes of data collected during the F1 season is big data. It’s a high volume of data comprised of different varieties, both structured and unstructured. Analysts and data scientists would process this data with the use of powerful computing systems, sifting through it in-order-to discover trends or correlations that ultimately help solve problems.
This type of exploration in big data analytics can lead to new levels of efficiencies for your business. For example, the F1 team may discover by analysing their big data that they have slower lap times when they use a certain type of fuel. By simply changing the fuel type, they get a better chance at winning.
Just like how a F1 racing team figures out which lap is best for a pit stop, data analytics will help you answer questions around specific business objectives that will help your business win.
Whether you are analysing your data manually or using an automated tool, data analysis invariably begins with a question, and then examines the data to find answers.
Data Analytics Provides Your Business A Significant Competitive Advantage
Your company creates just as much data as that Formula 1 team, possibly more. Every operative task and customer interaction creates valuable data, which you can analyse to make improved decisions.
Companies that incorporate data analytics not only beat their competitors, but they continually exceed expectations.
The benefits of utilising data analytics to drive decisions affects every aspect of your business including marketing, operations, and product. Here are three real life examples of how Data Analytics played a key role in boosting the bottom line.
UPS put tracking sensors on more than 10,000 delivery trucks in an effort to optimise their routes. Their analytics started with a simple question: Can we reduce fuel consumption if we find faster routes for our drivers? They are now saving over 10 million gallons of gas and has reduced more than 12.1 million miles of driving per year.
Customer Relationships Transformation
T-Mobile applied analytics to reduce customer turnover rates by matching their subscriber’s social media data with their CRM software and internal billing in-order-to distinguish who their loyal subscribers are, with high-lifetime-value so as to create a personalised retention campaign. They were able to reduce churn by 50%.
Netflix uses data analytics to interpret what type of content they produce for their viewers. They analyse the behavioral data of their viewers, and use that to develop content that appeals to those behaviors. The result is that Netflix sales are up 36% and they produced 5 of the top 10 shows that people searched for.
The possibilities with your data goes beyond just making good decisions, because you have the ability to find insights about your business (or your customers) that can reshape your approach (or your focus) and lead to tremendous growth.
Analyse Your Business Data with these 4 Steps
You are already creating a lot of data within your current systems, and analytics tools of today are really accessible, and quite easy to integrate. So don’t feel overwhelmed by the thought of implementing data analytics in your business. Before you dive in, we’ve put together 4 steps to help you get started.
- Start with having clear objectives: Are you trying to reduce customer churn like T-Mobile? Or reduce fuel costs like UPS? Once you establish your goals, it will be much easier to figure out your questions, and the data you will need to find the answers.
- Identify the right data: Once you know what you need to achieve, the next step is to find the best data and metrics within your technology applications.
- Use a tool to analyse your data: In the past, you needed a data analyst for this, but not any more. If you don’t have an IT team to help you, there are several self-service analytics tools available that are designed to use your data to answer your questions.
- Make Your Decision: Your data analysis will give you the information you need to take action, but it’s not going to make this decision for you (It possibly will in the future, but not yet). Your ability to untangle the data and act on the insights is what’s going to set you apart.
To help you understand your analysis, ask yourself these questions:
- How does the end result answer the question?
- Does this data help safeguard against any objections? If so, how?
- Can these insights be used to make substantial changes to the business?
It’s not your lack of data or analytics tools that will make the difference. It’s your ability to set clear objectives, ask the right questions, and act on the insights from the analysis.
The secret to winning is simple; go faster than everybody else
Business is moving fast, and just like that Formula 1 team, your company can take a sizable lead if you know what questions of your data need answering, and how you are going to take action once you have the answers.
Every business has access to data. The ability to transform your data into actionable insights to achieve business outcomes faster and more efficiently is your differentiator.
Request your Big Data Consultation Today! Its Free
To stay competitive, you must evolve, and we know this firsthand. We work with organisations of all sizes, in a variety of industries who seek faster insights from their data, while maximising its value to drive growth and innovation.
To learn how Mitra Innovation experts can help your organisation thrive, call us at 0203 908 1977 or email us at firstname.lastname@example.org We look forward to our conversation.