Revisiting ‘what is analytics’

In the 2011 March/April issue of Analytics I took a look at the question, “What is analytics?” I shied away from proposing a definition for a host of reasons, many of which are illustrated in the definition of another discipline with a long and distinguished history: mathematics.

So what is “mathematics”?

Thanks to our educational system, we all have exposure to math from an early age. Most of us associate it with numbers. Ask mathematicians, however, and they may not even mention numbers, focusing instead on abstract symbol manipulation and sets. Yet even here there’s no uniform agreement. Consider this rather striking passage from the Wikipedia page Definitions of Mathematics: “Mathematics has no generally accepted definition. Different schools of thought, particularly in philosophy, have put forth radically different definitions. All are controversial.”

Nonetheless, we speak cogently about mathematics, and most people would argue that mathematics is important, leading us to conclude that an exact definition isn’t a prerequisite for a field to stand on its own.

Still, the process of seeking a definition is invaluable. In my earlier article I focused on the fact that discussing what analytics is and isn’t helps us come to a better understanding of it even if we never converge on a precise definition that all businesses, vendors and academics can agree on. Here I’d like to focus on another beneficial aspect of seeking a definition: communicating one party’s perspective on analytics to the rest of the world. When John says analytics, what does he mean?

INFORMS (the professional society that publishes this magazine; see “Profit Center,” March/April 2012) recently undertook an extensive effort to arrive at its own definition of analytics. The process was spearheaded by the board of directors, and the goal was to succinctly communicate INFORMS’ perspective on the topic. Needless to say, getting an organization of more than 10,000 members to agree on anything is a challenge. And, not surprisingly, not every individual member was personally contacted. An ad hoc committee reviewed existing definitions, discussed these definitions and prepared its own. It then sent a proposal to various subgroups within INFORMS which in turn solicited comments from their membership. Many strong, thoughtful opinions were voiced. But in a matter of months, a reasonable consensus had emerged. This was the result:

Analytics is the scientific process of transforming data into insight for making better decisions.

At the heart of the definition is data, and transforming that data into insight. Of the many definitions of analytics now in use, data is central to most, as is using that data for a specific purpose. Interestingly, the INFORMS definition describes that purpose as insight for making better decisions. INFORMS tends toward the mathematical end of the analytics spectrum, so a more technical term than insight wouldn’t have been surprising. The choice of insight communicates that while the organization believes math is important, it’s subsidiary to the insight aimed at making better decisions.

Even more interestingly in the definition is the focus on the scientific process of transforming data. Is this where mathematics enters the equation? Not necessarily. Mathematical tools can be very useful, but the explicit statement in the definition calls out the scientific process, a process that involves an informed, logical, orderly sequence of steps. The scientific process is powerful and is something that’s all too frequently overlooked in decision-making. Coupled with data, the scientific process is a juggernaut.

Aspects of INFORMS’ definition aren’t unique. All definitions share numerous commonalities, which is reassuring. Where the definitions tend to diverge is over how much and what type of mathematics is used. Is simple reporting part of analytics? It depends upon whom you ask.

INFORMS’ definition certainly doesn’t resolve the question, “What is analytics?” It does, however, provide a thoughtful perspective to ponder. And it informs us of just where INFORMS stands.