Over the years, the adoption of advanced analytics and data visualization tools by enterprises in order to generate key insights that can support quality business performance decisions has considerably evolved.
Nonetheless, not all investments in this arena are producing the desired outcomes.
Although significant sums of money, resources and time have been channeled towards data and analytics initiatives, the quality of insights generated, and ultimately the decisions are far from convincing.
Some of the possible reasons for explaining these failures include:
- A sole focus on technology, and less on processes and people.
- Misguided belief that the more data you have the better.
- Lack of or poor organizational alignment and cultural resistance.
For instance, investing in state-of-the-art data analytics and visualization tools at the expense of data quality doesn’t automatically empower you to generate valuable insights that drive business performance.
Or having the right technology and quality data, but poor organizational alignment coupled with intense cultural resistance.
So how can your organization use data and analytics to generate trusted insights, make smarter decisions and impact business performance?
Prior generation of any business insights, trends or activity patterns, it’s imperative to ensure that the performance data to be analyzed is trusted. That is, the data must be fit for purpose, current, accurate, consistent and reliable.
With so much data and information available today, it’s increasingly difficult for decision makers to determine which data points are essential in understanding what drives the business and incorporate these into business decision making.
Resultantly, many organizations end up data hoarding and incurring unnecessary expenses along the process.
To ensure your data is fit for purpose, first and foremost, develop an understanding of the real business questions that the data needs to answer. By asking questions at the very beginning, you will be able to identify and define any problems or issues in their context.
Further, asking relevant questions will help you develop an improved understanding of the present factors, past events, or emerging opportunities driving the need for advanced analytics and data visualization investments in the first place.
Concurrently, asking the wrong questions results in ineffectual resolutions to the wrong business problems.
Generally, people want to kick off their data analysis effort by first collecting data and not asking the relevant questions, establishing the business need and formulating the analysis plan.
But, the quality of the insights and the value of the recommendations delivered are rooted in the quality of the data you start out with.
Data collection should only begin once the purpose and goals of the data analysis are clearly defined. Thus, the more and better questions you ask, the better your insights, recommendations, decisions and ultimately business performance will be.
Data accuracy, consistency and reliability
Ensuring that data used in analysis is accurate, consistent and reliable remains one of the common hurdles hampering analytics initiatives. One of the reasons for this is multiple data sources.
For example, suppose you want to analyze and evaluate the impact of a given marketing campaign on customer experience, in the past to do so you would have managed with data from your CRM system only.
Today, in order to get a 360-degree view of your customers, analyzing CRM data alone is not sufficient. You also need to analyze data from your web analytic system, customer feedback surveys, data warehouses, email, call recordings, social media or production environments.
Thus, you need to bring these disparate data sources together to generate valuable, actionable insights.
Issues arise when the multiple data sources define key business performance terms or metrics (e.g. sales, conversion, margin growth) differently and there is no common definition shared across the business.
This lack of shared understanding of business performance has far reaching implications on your analysis and makes it futile to compare results.
Data collection, followed by data cleansing and validation, are all therefore important. After you have collected the data to be used in the analysis per your analysis plan, it’s important to clean and validate the data to make it useable and accurate. Select a small data sample and compare it with what you expected.
Ensure the data type matches your expectations. Remember the adage: garbage in, garbage out. Even if you have the best of the breed analytics tools to slice and dice information, with poor data quality practices, your insights and decisions will remain unsubstantiated, erroneous and worthless.
For this reason and to ensure the consistency of the data used in your analysis, know and understand the source of every piece of your data, the age of the data, the components of the data, what is not included in the data, when and how often the data is refreshed.
Without data integrity, it is difficult to generate trusted insights and deliver recommendations that decision makers can confidently act on. Also, delivering trusted insights goes beyond merely attaching a colourful report in an email and hitting the send button.
Instead, the insights must be delivered in a digestible and actionable format. That is, communicated in a format that is more readily understood by decision makers in the organization. Poorly communicated insights can result in no action, negating the value of the insights in the first place. Thus, avoid getting bogged down in details.
Knowing is powerful, but acting based on knowledge is what drives smart decisions, creates true value and impacts business performance.