Mastering the Two Types of Analytics

Monday, August 7, 2017

I often hear analytics as just one pod, but I really think there are two types. One I call “analytics at rest” and the other “analytics in motion.”

Analytics at rest means using analytics to make strategic decisions, investments, and policy changes. Rather than going around a conference room, referencing PowerPoint decks, and polling executives, leadership uses analytics to make those decisions.

In analytics in motion, we optimize the continual decisions at an organization, both on the buy and sell side, that are made every day. At a trucking company, for example, that means where to place a load, whether to aggregate loads and move them via truckload, which mode to use, which customer to serve, which pilot or driver to assign, where to pick up next, when to hold, and when to go. That’s analytics in motion.

I know that all of us have been using data for quite a while, but this is a higher-level play. For current leaders in Transportation—an industry that is being disrupted by Big Data, the Internet of Things (IoT), the Uberization of freight, drones, and driverless trucks— the key to success will be to master these two types of analytics.

Transportation companies have to drive up analytics capabilities and start moving organizational culture to be more data-driven in making decisions, relying less on experience and gut-feelings. Given the low margins in Transportation, this is not a competitive advantage—this is, basically, survival.

In our firm’s ongoing survey of transportation executives about disruptive technologies, the Internet of Things—wirelessly connected real-time sensors for everything from freight to vehicles to personnel and facilities—and Big Data topped the list as the most likely and most impactful trends. These are two sides of the same coin. This is where the action is.

In the survey, 84% of respondents agreed that IoT will have moderate or large impact, and 85% said the same for Big Data, or the collection and analysis of external information.

Analytics is driving a bona fide revolution in manufacturing, distribution, and transportation: everything from how we price, how we move, how we optimize, to where we locate. Better information means the right resources in the right place at the right time. That’s what the buyers are buying and the sellers are selling.

If you're like me, you'll agree with Peter Sondergaard of Gartner when he said “information is the oil of the 21st century, and analytics is the combustion engine.”

This post is adapted from a teleconference for transportation and finance executives, conducted by Steve Sashihara and John Larkin of Stifel Capital Markets on January 22, 2017, and from this Fleet Owner article.