Are you doing analytics? Think again!
It seems anyone who has an excel spreadsheet does analytics. Anyone who has calculated sum, mean, etc., created some charts, got some data files is doing analytics. But is this analytics? and if this is not analytics then what is analytics?
What is analytics?
In simple terms, analytics is mixture of the following five attributes:
Innovation: For any organisation, new innovative ideas are the foundation of the analytical processes that can help the organisation to establish how it can benefit to improve its business. Some organisations have come up with brilliant ideas such as utilisation of analytical processes to identify the value drivers for the sales of their products, identify various pressure points that can help improving the project efficiencies, etc.
Possibility: It is very important for the analytics team to understand what all is possible by utilising the available data or by introducing new data sources and applying analytical techniques to it. Organisations who has successfully benefited from analytics have team members who have a clear understanding of the art of possible.
Statistical Analysis: This is a key component of analytics. Most of the organisations discount the importance of a good statistician who understands the business and its challenges. But a good statistical model to support the analysis is a must. It is not only about the model but having the ability to explain the model in plain English to the business team so that they execute to get the optimal outcome leads to a successful analytics project.
Thinking: I have heard organisations saying that we have the analytical tools to build models. But it is not the only the tools and the modellers, who make a successful analytical project, it is thinking that is the most valuable component. Mostly, the thinking through the business problem is the key success factor to a successful project. Once, my team was given around 3000 rows with only 25 variables to run an optimisation problem, a statistician would have said refused to do anything with it because of too less data. But the thinking team didn’t give up and created relevant data to match the existing data by bringing in some unstructured data and suddenly the team had millions of data points to optimise. Out of the box thinking can be really useful in certain projects.
Creativity: The analytics team needs to be creative to be able to understand the problem and simply utilise easy steps to create confidence within the business teams. Another important aspect is to be creatively thinking how the results will be actioned, because if there is no action, the most accurate analytical process is a waste of time. Creativity can help enrich the data to create a very accurate process which can provide great actionable results.
Business Outcome: Every analytical process should be built to deliver a business outcome. It is important to define an objective at the start of the project. Probably, write it on the wall in bold because the analytics projects that do not have a goal, business outcome and objective are never successful.
What is not analytics?
Yes, reports, graphs, data feeds, models, summation, averages is not analytics by themselves. They one of the components of analytics but by themselves they are nothing and definitely not analytics.
Do you still think you are doing analytics?