How can you use analytics to create value?

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It’s not clear for many of us exactly how we can use the data we have to help our organisations.

The systems we have are collecting more data than ever before – from customers, operations, sensors – and there is data being collected around us in social media platforms.

Many organisations are good at looking back – they can tell what happened and to some extent why it happened.

Fewer can see what is happening right now and what could happen next and what they should do as a result.

Some organisations use real time data to increase sales

The recommendation engines used by Amazon are designed to increase sales by showing you what else you might like – and the way in which google or Netflix present related information is designed to keep you using their platform.

But, what should the rest of us do to get started?

The advice from an MIT study is a perhaps a good point to begin.

There is more data around than we probably have the resources to deal with, so the starting point is to go after the big problems – the 20% of things that have 80% of the impact or cause the majority of the problems.

It’s hard to get people to give up personal decision making and rely on data.

Linking the analytics work to big, important things in the business and showing how data can help with those decisions has a better change of getting new methods into general use.

Then, it makes sense to start by asking questions instead of getting lost in the detail of analysis.

We can spend so much time getting data and starting to cut and analyse it that, all too often, there is no time left to see where it can help.

If we start with the big things that the company is interested in – often set out in their goals and objectives, we can then ask questions about what information would be useful to reach those goals.

Those questions will then let us explore what we can do to get answers and start to define the kinds of data and analyses we need to carry out.

The things organisations say are most important to them right now are trends, forecasts and standard reports.

The things that are likely to also become important are dashboards, simulation and scenario analyses, business process analytics and advanced statistical techniques.

We should try and make sure that what comes out of the analysis we do is business friendly and can be layered with other pieces of information and intelligence to make decision making easier.

Next – we build on what has been done before.

All too often, vendors are dismissive of spreadsheets.

In any room, however, it is likely that the vast majority have used and are comfortable with spreadsheets while advanced analytics tools have a steep new learning curve.

Good information systems design will keep what works and build more – perhaps with advanced analysis automated as much as possible or centralised within a support unit with experts that can help.

Finally – we should have some kind of a plan when building our information systems.

An information agenda, signed off by management, is a good way to oversee the process of sharing and using data better.

The study says that top performing organisations use analytics five times more than low performers.

For the rest of us, we should begin by understanding how to get started.

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