In this paper our data and strategy consulting experts outline an appropriate framework to measure a business's analytic capabilities and explore the potential options available to businesses wishing to improve their approach to analytics effectively.
What is business analytics?
Business Analysis is the statistical techniques and processes used by business to develop insights into areas such as their business performance, customer behaviour and employee productivity. Business Analytics require a number of capabilities to be successful including:
Availability and quality of data is a critical starting point. Without good quality data that can be accessed with relative ease most analytic endeavours will fall at the first hurdle.
Data analytics resource and capability, including the business analysis tools, is a core requirement to transform the data into meaningful and actionable data insights that the business can make use of.
Data leadership that ensures that the investment in data is going towards value adding initiatives that are supported by effective internal analytic services and used by the business.
Data Governance that makes sure the data is used both responsibly within legal guidelines and effectively in terms of the data sources and definitions used that underpin the insights.
Why is business analytics important?
Business Analytics enables the business to understand what is working and what is not working, be it to do with their overall strategy, customer experience, product strategy or operations and logistics.
Data Analytics can take the form of descriptive analytics that describe what is happening, as well as predictive analytics and modelling that can help the business predict what is likely to happen next. Businesses use this capability be it through their own business analysis teams or their business insight consulting partners across a multitude of business applications for example:
Understanding the market and competitor landscape and how your business compares in terms of productivity or profitability.
Predicting future trends to enable the business to develop scenarios that will help define strategic plans for the future.
Identifying and understanding current operations and performance to seek out opportunities to make improvements.
Optimising product management and range to ensure the right products are in store at the right time for customers and new products are launched to keep the range fresh and appealing to customers.
Optimising the overall spend and targeting of advertising so it generates the greatest impact and customer sales.
Identifying anomalies in transactions that indicate that something is not right be it a product that has been incorrectly priced or fraud taking place.
Tracking behaviour and customer drop off or basket abandonment through the customer lifecycle so that improvements can be made to the customer experience and conversion rates.
As such getting the most out of your data analytics has become a strategic imperative for many companies, so understanding how the business is performing in this arena, where success are occurring and what the overall appetite and attitudes are towards analytics is a great place to start in figuring out how to get more out of your data analytics investment.
How to assess the capability of your business analytics
A great place to start to understand the capability of the business analytics is to speak to the stakeholders across the business. This needs to cover as many areas as possible from the IT/Data operations and insight teams as well as the business stakeholder groups such as Operations, Commercial and Marketing.
Where possible it is also helpful to get a good understanding of the views on data and its ability to support the Executive. This is the most important stakeholder group as these individuals will ultimately drive the use of data and insights throughout the business by example. Therefore, understanding how they feel about the current data situation and what they see as the potential should be a cornerstone in the data capability assessment and how a business plans and priorities for the future.
As a result of numerous assessments by our business analytics and consulting team we have created a generic set of questions that we find very effective at quickly building a solid view on the ‘state of play’ and help identify where you should focus.
These questions can easily be set up as a survey and distributed digitally to the business as a first step in the information gathering phase. Our normal approach is to run these as a survey with a standard response framework for each question as follows:
Stage of maturity within the business - Example summary results
Does not exist - Business is not aware, or has not considered/started this process or set of behaviours.
Initial - Processes or behaviours are ad hoc, unplanned with no established repeatability
Repeatable - Some element of the processes are repeatable, possibly with consistent results. Process discipline is unlikely to be rigorous.
Managed (Capable) - Effective achievement of the process objectives can be evidenced across a range of operational conditions. The suitability of the process in multiple environments has been tested and the process refined and adapted. Users have experienced the process in multiple and varied conditions, and are able to demonstrate competence.
Optimizing - The focus at this stage is on continually improving process performance through both incremental and innovative technology changes/improvements
What are the next steps
We find it helpful to use the individual responses to follow up in more detailed one to one meetings to find out more about what has driven the responses. Alternatively, the business can set up each question with the response framework and ask for additional comments or reasons behind the response in a free text box.
Whichever way the business chooses to go about this, sharing the responses with the Executive team can be an extremely useful way to communicate not only where some of the greatest opportunities lie but also where the greatest momentum and drive for data analytics exist in the business. This can be a great indicator for where to continue to focus efforts and generate positive results (we call them Quick Wins) that will grab the attention of the business and further the cause for great data analytics.