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Spotlight on Making Your Company Data-Friendly

Spotlight

64 Harvard Business Review December 2013

Artwork Chad Hagen
Nonsensical Infographic No. 5
2009, digital

hbr.org

Analytics 3.0
In the new era, big data will power consumer products and services. by Thomas H. Davenport

T

hose of us who have spent years studying “data smart” companies believe we’ve already lived through two eras in the use of analytics. We might call them
BBD and ABD—before big data and after big data. Or, to use a naming convention matched to the topic, we might say that Analytics 1.0 was followed by
Analytics 2.0. Generally speaking, 2.0 releases don’t just add some bells and whistles or make minor performance tweaks. In contrast to, say, a
1.1 version, a 2.0 product is a more substantial overhaul based on new priorities and technical possibilities. When large numbers of companies began capitalizing on vast new sources of unstructured, fast-moving information—big data—that was surely the case.
Some of us now perceive another shift, fundamental and farreaching enough that we can fairly call it Analytics 3.0. Briefly, it is a new resolve to apply powerful data-gathering and analysis

December 2013 Harvard Business Review 65

Spotlight on Making Your Company Data-Friendly

methods not just to a company’s operations but also to its offerings—to embed data smartness into the products and services customers buy.
I’ll develop this argument in what follows, making the case that just as the early applications of big data marked a major break from the 1.0 past, the current innovations of a few industry leaders are evidence that a new era is dawning. When a new way of thinking about and applying a strength begins to take hold, managers are challenged to respond in many ways. Change comes fast to every part of a business’s world. New players

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