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.
Using this data governance approach, all stakeholders across the enterprise are encouraged to work together to meet the data management challenge.
Businesses must also move beyond traditional sources of data in order to seize opportunities for new insights. There is a plethora of data being generated from a variety of sources. For example, monitoring customer experiences in real time using web analytics, while analysing patterns in visual data, can reveal new sales opportunities that might have been missed in a vast spread sheet.
Step 3: Evaluate and refine
The practice of evaluating data separates those companies discovering an return on investment (ROI) and those who continue to search. It is essential to test your initial analytics insights against the original core business question.
To minimise risk, businesses should adopt a test-and-learn approach, where a new offer or solution is applied to a sample project with the aim of improving a lagging KPI. This provides an opportunity to iron out any problems and adjust the campaign to its full potential.
Following a successful trial, business leaders can look to apply the new insight across appropriate areas of the business.
Step 4: Scale to realise your ROI
So, you've asked the question, gathered your data and tested your insights. If you got it right, these insights can now be applied across all functional areas including customer relationship management, finance and performance, supply chain management and human capital management, while also providing tailored solutions to cross-business challenges.
Gaining a competitive advantage with analytics requires more than technology and data scientists; it requires a great business-driven question to guide an organisation's energy and resources. The organisations that can identify and answer their business questions, will be those who take action and remain ahead of their competitors.
Analytics should be recognised as a powerful tool to be embraced by the entire company, because when done right, it can provide unparalleled benefits to multiple facets within a business. Unlocking the potential of analytics, should not be thrown in the "too hard" bucket; with a clear methodology and targeted approach, this new found intelligence will give your company a calculated advantage.
Michael Pain is Accenture Australia's analytics lead.