Stumbled upon this great article today about the role of analytics in business and it got me thinking about the ways we use them to make all facets of business more successful. According to Chris Petersen, a strategic consultant who specializes in retail, leadership, marketing and measurement, there are two questions every company needs to address regarding analytics.
- What should be the focus of the analytics?
- Whose job is it?
I am drawn to the first question, and learned that the definition of analytics is much broader than the “Google analytics” I often think of, measuring web-based activity. Analytics is a broad term that encompasses a variety of tools, techniques and processes. It involves systems that organize masses of data so tools, metrics and statistics can be applied to derive fact-based information. Petersen describes business analytics as including applications such as customer segmentation and purchase patterns or marketing metrics to measure impact and return on investment.
Gathering data is one thing, and applying it to the benefit of the company is entirely another. How many times have you encountered a pile of reports filled with statistics that seemed…overwhelming. Like the famed TPS reports, they often wind up in pretty binders on a shelf somewhere. The question for business leaders: How can we turn all of those numbers into something we can use to compete more effectively?
First, make sure the data you are using is accurate. As a leader, you should be asking who is providing the data and how is it being interpreted. The interests of the team gathering/generating the data will be reflected in the way it is reported, so keep that in mind. Next, think about the relevance of the data over time, is it reliable enough to give you what you need to know for the duration? Part of the value of measurement is the ability to identify patterns and use them to improve your work. Finally, is the data useful, aligned to answer critical questions from an overall business perspective. Sometimes the idea of data is sexier than the actual data itself. If it doesn’t provide real value, then wrap your fish in it and call it a day. By asking the right questions, leaders can shape the future of their companies’ success using the incredible wealth of information gathered to drive strategy and measure results. Innovation opportunities will be exposed and competitive issues brought to light with a combination of good analytics and leaders who ask the right questions.
Hat tip to smartblogs.com