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8 business analytics essentials

Find out what business analytics can do for you

Leading banks use business analytics to predict and prevent credit fraud, saving millions. Retailers use business analytics to predict the best location for stores and how to stock them. Pharmaceutical firms use it to get life-saving drugs to market more quickly. Even sports teams are getting in on the action, using business analytics to determine both game strategy and optimal ticket prices.

 Greg Wood, SAS 
Greg Wood, SAS 
But these advanced business applications tell only part of the story. What’s going on inside these market-leading companies that sets them apart?

They have committed to deploying their people, technologies and business processes in new ways. They have committed to a culture that is based on fact-based decisions – which helps them anticipate and solve complex business problems throughout the organization.

In Competing on Analytics, researchers Tom Davenport and Jeanne Harris demonstrate how organizations as diverse as the Boston Red Sox, Netflix, Amazon.com, Capital One, Harrah's Entertainment and Procter & Gamble are using business analytics to trump rivals. By embracing an analytical approach, these companies identify their most profitable customers, accelerate product innovation, optimize supply chains and pricing, and identify the true drivers of financial performance.

And you can too. Begin by using Davenport's 5-stage rating system to assess where you are and where you need to go:

Stage 1: Analytically impaired. Your organization is “flying blind,” plagued by missing or poor-quality data and poorly integrated systems.

Stage 2: Localized analytics. Your analytic efforts are isolated, opportunistic and function-specific. Your organization collects transaction data efficiently but often lacks the right data for better decision making.

Stage 3: Analytical aspirations. Your organization has executive support for analytics and a proliferation of business intelligence tools and data marts, but most data remains unintegrated, nonstandardized and inaccessible.

Stage 4: Analytical companies. Your organization begins to develop an enterprisewide analytics capability with  high-quality data, an enterprisewide analytical plan and governance principles.

Stage 5: Analytical competitors. Your organization is routinely reaping big benefits from its full-fledged, enterprisewide analytics architecture, which is fully automated and integrated into processes.

Now that you know where you stand, get started with business analytics by taking these eight essential actions:

1. Improve the flow and flexibility of data
High-quality data must be integrated and accessible across your organization. It should also be structured in a flexible way that allows your analysts to discover new insights and provide leaders the information they need to adjust strategies quickly.

2. Get the right technology in place
Take an enterprise approach to data management and analytics to effect better decisions. Remove disconnected silos of data, technology or expertise. Your technology portfolio should include:
  • Optimized data stores to support core business processes and discovery.
  • Data integration and data quality software.
  • Analytical software with the means to effectively deploy, explore and share results in a meaningful way.

3. Develop the talent you need
Develop or recruit analytic thinkers who seek and explore the right data to make discoveries. To make analytics work, analysts must also be able to communicate effectively with leaders and link analytics to key decisions and the bottom line.

4. Demand fact-based decisions
An analytical company makes a wide range of decisions. Some are ad hoc; some are automated; some are transformative. The common thread? Evidence backs them all. Managers encourage asking the right questions of the data to get maximum insight.

5. Keep the process transparent
The value delivered from an investment in business analytics must be visible and measureable. Who the analysts are and what they’re seeking to accomplish should be clearly communicated to the business, as should their findings.

6. Develop an analytical center of excellence
Create an analytical center of excellence (ACE), which promotes the use of analytics and associated best practices. The most effective ACEs address all elements of the organization’s analytic infrastructure: people, process, technology and culture to support the business’ strategy and operations.

7. Transform the culture
A strong analytical culture has executive sponsorship and encourages creativity. Experimentation should be seen as part of learning, and employees should be given permission to fail as they learn from trying new things.

8. Revise your strategies – often
Your competitors will often duplicate your analytical initiatives. Staying ahead requires continuous review of strategy and development of new skills and capabilities.

Get started now
Find important questions that need to be answered and problems that need to be solved. Answer these questions, solve these problems and create value for the organization. By creating small wins in any business, function or department, over time your company will become an analytical competitor.

Bio: Anne Milley is a Senior Director in Technology Product Marketing for SAS.
Greg Wood is a Regional Product Marketing Manager for SAS Asia Pacific.

Anne Milley, SAS

Read More

TOP BENEFITS OF BUSINESS ANALYTICS

Why is business analytics so vital to success? Here are the key benefits identified in a Computerworld survey of 215 IT and business professionals:

1. Improving the decision-making process.
2. Speeding up the decision-making process.
3. Better alignment of resources with strategies.
4. Realizing cost efficiencies.
5. Responding to user needs for availability of data on a timely basis.
 
Read the full research.

This story appears in the Second Quarter 2010 issue of