December 8th, 2010 - 11 Comments
Writing on Forbes.com, Smeal’s John Jordan looks at the growing use of analytics to make business decisions, arguing that “numbers-driven decisions are no longer the exclusive province of people with hard-core quantitative skills.” Loosely defining analytics as using “statistical and other methods of processing to tease out business insights and decision cues from masses of data,” Jordan indentifies three examples of the growing use of data-based decision making:
- The “flash crash” of May 2010 focused attention on the many forms and roles of algorithmic trading of equities. While firm numbers on the practice are difficult to find, it is telling that the regulated New York Stock Exchange has fallen from executing 80 percent of trades in its listed stocks to only 26 percent in 2010, according to Bloomberg. The majority occur in other trading venues, many of them essentially “lights-out” data centers; high-frequency trading firms, employing a tiny percentage of the people associated with the stock markets, generate 60 percent of daily U.S. trading volume of roughly 10 billion shares.
- In part because of the broad influence of Michael Lewis’ bestselling book Moneyball, quantitative analysis has moved from its formerly geeky niche at the periphery to become a central facet of many sports. MIT holds an annual conference on sports analytics that draws both sell-out crowds and A-list speakers. Statistics-driven fantasy sports continue to rise in popularity all over the world as soccer, cricket and rugby join the more familiar U.S. staples of football and baseball.
- Social network analysis, a lightly practiced subspecialty of sociology only two decades ago, has surged in popularity within the intelligence, marketing and technology industries. Physics, biology, economics and other disciplines all are contributing to the rapid growth of knowledge in this domain. Facebook, al-Qaida and countless startups all require new ways of understanding cellphone, GPS and friend/kin-related traffic.
Also on Forbes.com, Jordan lists nine reasons for “The Data Analytics Boom.”News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.