As business complexity increases, making decisions based on a sampling of some data, gut feel and hunches, or someone’s ability to argue an opinion is no longer sufficient. The capability to predict future business trends with a reasonable degree of accuracy will be the deciding advantage any company will have over their competition.
And business analytics is the key component of making these better-informed decisions.
Business analytics goes far beyond spreadsheets, which aren’t typically a company-wide information delivery system, but are unique to the individuals that built them. In a typical company, there are many such spreadsheets with different views of the business, resulting from inconsistent definitions of business elements and metrics. As a result, these views are difficult to reconcile.
With business analytics, everyone is pulling the numbers from the same pool of data that is shared company wide. All parties share their insights and are on the same page every day. The depth of understanding, especially when visually prepared (see image below), is greater than when viewing tabular data.
The above visual dashboard illustrates sales pipeline data for a factitious company (illustration supplied by Tableau Software). In the dashboard, the color coding represents sales opportunities in the various stages of the sales cycle. In one glance, a sales manager can see how many opportunities in dollar terms are in the final stages of closing, for example, across the entire sales force.
To get the most from business analytics and support better-informed decisions, companies should follow these basic steps:
• Determine what business problems are to be solved or what decisions need to be made.
• Study how analytics are being used by others and the strategies they implement
• Source clean data that is consolidated, shared and accessible across the company (including numeric, text, and image in form)
• Engage IT in the discussions of analytics
• Gain buy-in from senior management to the importance of analytics
• Invest in the analytic capabilities (human and technology) that enables the company to compete successfully
• Experiment with analytic methods on real problems, review results frequently, share insights and apply learning to the next round of analysis
• Practice sound analytics (fact-based analysis) in the decision-making process, leading to informed decisions that are acted upon, with outcomes measured and re-analyzed for continuous improvement
• Ingrain analytics in the business processes of the company where analysis is the focus from beginning to end
• Incorporate analytics into the company’s day-to-day operational decisions, strategic initiatives, and directional changes
• Institutionalize the analytical process companywide for uniformity and consistency
Based on actual business cases, there is no question that analytics will become a transformational discipline that will fundamentally change how business is conducted and decisions made.
Sign-off Note
I have started writing about analytics not in terms of its specific nature but how the technologies can be used in a business context. Future posts will be based on consulting projects we have completed and as a result there will be some variation in the posting of these articles. Actual client data will not be used in these posts because of the proprietary nature of the information. However, each example will be based on real world business situation. I trust, as a reader, you’ll appreciate the reality of this content and won’t mind the variability in our postings. See you soon with the next post.
This blog contains my personal views and experiences on the use of Analytics in
business. – Creig Foster
