Data analytics is often hailed as the best method to gain the intelligence -- using fact-based conclusions and quantifiable insights -- that is required to make better business decisions.
Consequently, many Australian organisations are investing heavily in business intelligence and enterprise performance management systems.
In successful cases, collecting, managing, reporting and evaluating data can drive significant operational benefits, often in the range of 15 to 30 per cent of net operating income. But many businesses find defining "outcomes from data" a perplexing challenge.
There are a few reasons for this. Some organisations fail to develop an appropriate business case for analytics with an end-to-end view; meaning they aren't considering how analytics results can be evaluated and translated into a campaign to improve overall performance. This is one of the biggest problems we see. How are analytics fitting in with your overall business strategy?
Companies also commonly make the mistake of retrofitting "scattergun" findings back to business issues rather than being selective and targeted in their approach.
Moreover, they struggle to keep pace with the amount of data coming from vast and varied data sources, both internally and externally. How can you best manage and acquire valuable data?
Analytics must deliver business outcomes -- otherwise it's just fancy reporting. So ask yourself: is your organisation using the right analytics to help you progress from issue to outcome?
In recent years, many Australian companies have invested heavily in their analytics capabilities without following these simple steps.
Step 1: Start with a great question
Don't wait for your analytics team to come to them with answers, without first considering how these will align with and drive core business strategies. Approaching analytics without a business-led approach is a waste of time.
One of the best places to start is with a business key performance indicator (KPI) that needs to be improved. The right question is one that aligns with business outcomes, has clear goals and can be answered without too many obstacles.
But remember to ask the "so what?" questions in order to stay on track. Does the question really need to be answered? Will the answer deliver critical business intelligence that helps to reach a goal? Solving a problem innovatively is as simple as approaching it from a different angle. With the support of a strong team made up of different business departments (which could include product, analytics, marketing, segment and sales), analytics efforts can be shared and translated across the entire business.
Step 2: Execution and data governance
Making smarter business decisions requires a coordinated approach to gathering data and responding to data insights. Business leaders should establish a clear model for data consistency, data processing and on-time delivery of information.
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