Research

Business Analytics: An Overrated Sham

By Gary Cokins, Apr 01, 2016

Analysts probing rationally integrated limits for optimization opportunities lack smarts. That is, most analysts who think they are successfully solving problems are foolishly kidding themselves and are delusional.

Let’s be honest. This new fad about business analytics and Big Data is getting wildly over-blown as if it is comparable to a miraculous drug that stops aging or is a proof of physics’ Grand Unified Theory that Albert Einstein went to his grave failing to produce. Today’s business analytics is like the snake oil that was pedaled by hucksters in the 1920s. Using analytics gives false hope that it can improve an organization’s performance, solve problems, support better decision making, or exploit opportunities. It is dubious that analytics improve or solve anything.

And who are the hucksters spreading this sham? Of course, it is the consultants and software vendors. Don’t be conned by them. The software vendors offering business analytics functionality have designed them for Ph.Ds. Normal users cannot understand how to use the software. And consultants allegedly claiming to help their clients use analytics typically have just read a book on statistics before starting the project.

All this interest in statistics, operations research, analytics, and optimization is someone’s pipe dream. It is this decade’s quackery. The interest in analytics will pass and fade away like any fad. Remember the pet rock? The advocates and followers of analytics are like a zealous cult. Be wary of them and their fraudulent ideas. Don’t believe their calculations – especially their so-called “predictive or prescriptive analytics.” You’d do better knowing the future with a crystal ball or Ouija board.

Business intelligence – the big joke

And what is the big deal with business intelligence, the so-called BI? Anyone who uses the words “business” and “intelligence” in the same sentence is naïve and foolish. Operating a business does not require being intelligent. Managing a business is all about power. The best business managers hound their employees to squeeze results from them, and they crush their competitors with force.

Business intelligence has little to do with successful decision making. There is no intelligence in BI.

And what is the deal with Big Data? Just because there is more information available from the Internet does not mean you need to use any of it. When as a kid my mother served Brussel sprouts did not mean I had to eat them.

Analysts waste every ones’ time

An additional exaggeration is the importance of analysts in an organization. Analysts are simply aimless number crunchers who perpetually spin their wheels with nothing to really show for their wasted efforts. The best decisions come from leaders who rely on their intuition and have a gift and a sixth sense to just know the right things to do. The best culture for any successful organization is to operate in a “no facts” zone.

Tom Davenport and Jeanne Harris wrote a book title Competing on Analytics. It is drivel. Don’t waste your time reading it. Companies compete by having more money. Those with more money win, and those with less lose.

And if you believe what I have written here, read the first letter of each word in the first sentence of this blog. You will see that together they spell A-p-r-i-l f-o-o-l-s. Happy April Fools Day, Everyone!

About the author

Author photo

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in enterprise and corporate performance management (EPM/CPM) systems. He is the founder of Analytics-Based Performance Management LLC garycokins.com. He began his career in industry with a Fortune 100 company in CFO and operations roles. Then 15 years in consulting with Deloitte, KPMG, and EDS (now part of HP). From 1997 until 2013 Gary was a Principal Consultant with SAS, a business analytics software vendor. His most recent books are: Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics and Predictive Business Analytics. Gary is also a member of the IIA Expert Network.


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