Data analytics informs business decisions
The way I like to think about data analytics is using the data you have to help inform business decisions. So data analytics is more around how can you manipulate numbers in order to help you make better decisions.
Data analytics uncovers drivers of success
Businesses always have some sort of fundamental KPIs, whether it is the number of sales or the number of customers. So data analytics can help businesses understand the different drivers of success. For example if you are having a decline in sales over time, data analytics can help uncover why it is declining and what are the different components that is driving it up or down.
Data analytics provides an objective view
Historically to make decisions businesses generally go by their intuition or their experiences in the business. What data analytics puts in place, is an objective view of the business so it is not skewed by someone’s way of thinking or their experiences. It just gives a very objective black-and-white on what is happening.
Objectives before tools
One way that people view data analytics is that it is about the software or the platform that they use. Many clients I met would go for the Mercedes model. They would purchase the most expensive platform thinking that it would give them the answer that they needed.
Actually, what I would recommend is to start with really basic tools, and flesh out your business objectives from data analytics. What are some of the key questions you want answered? Once you are certain about the objectives then you can move on to thinking about which tools to use. At the end of the day tools are just enablers to help you do things faster.
Effective data analytics is top down
I think traditionally how people would work with data is start from an Excel spreadsheet that is quite comprehensive, then trying to work out what are the trends. They work on a very bottom-up approach to figure out what is happening in the business.
One of the biggest challenges is to flip that around. Instead of going from bottom up, you should ascertain the important KPIs and the drivers of these KPIs. It is about how to get information on these important areas then working from the top-down. It is more of a culture shift rather than any sort of technology upgrade.
Capture clean data at the first stage
One of the most frustrating things we face is having dirty data. I think a lot of people don’t really appreciate the amount of work that is required to have clean data.
As a business it is really important to make sure that when you are capturing data, it is giving you the right quality at the first stage. If you don’t have the right governance or the right quality checks when capturing data sets, when it comes to actually using it you will spend a lot of time cleaning the data, putting business rule on it, before it gives you meaningful insights.