- Raw Data, the New Oil
- Top 10 Business Questions for Analytics
- Vital Lessons Learned
- Linking Analytics to Business
- Conclusion
This chapter is from the book
This chapter is from the book
This chapter is from the book
Vital Lessons Learned
Despite the power of BA, my experience in applying analytics in many companies across businesses has its share of frustrations that taught me many vital lessons. These lessons hopefully will aid you as you implement the BA Process for the first time and hopefully avoid wasting valuable time, resources, and opportunities.
Use Analytics
According to a 2013 survey of approximately 500 CMOs,6 spending in analytics is likely to increase by 66 percent over the next 3 years, yet only 30 percent of the companies surveyed are using analytics. This is a decrease of about 19 percent (from 37 percent) from the previous year! Professor Christine Moorman, who directed the CMO survey, said “I think the mistake that a lot of companies make is that they spend on marketing analytics, but they don’t worry enough about how you use marketing analytics.” I have witnessed the same phenomenon in many companies.
Reasons Why Analytics Are Not Used
The common causes of senior management’s lack of attention to how analytics is used are these:
- Lack of understanding and trust—Advanced analytics works, but few executives know how to use it, and fewer have direct experience working with it. As a result, management cannot vouch for or articulate analytics values when tough decisions are to be made among senior executive teams.
- Overreliance on what they know—Executives rise through the ranks doing things they know best. Unfortunately, analytics is likely not one of them. So when competing priorities demand their attention, they tend to rely on what they know, not on analytics. When the stakes are high, they often fall back on something they have prior experience with, not analytics (because it represents uncertainty and risk).
- Lack of strategic vision of analytics’ uses—The true effectiveness of analytics is not in tactical applications such as targeting or reporting. But that is exactly what some companies have been stuck doing, sometimes for more than a decade. Strategic applications cut across organizational silos and demand changes and even transformations of business, which might mean higher risks. Few executives would risk their careers to champion for the use of analytics under such situations.
- Lost in translation—Definitions and vernacular often differ between the senior executives and their analytics team, so business focus tends to get lost when traversing through the layers of management and finally reaching the modelers. In the reverse direction, significant customer insights might be ignored or filtered as “bad results” or “results not pretty enough to show the boss” by the analysts or mid-level management who might not interact so are probably not in tune with the senior executives.
The only way to mitigate this, I believe, is to ensure that there is a tight linkage between business and analytics. Hopefully, by taking the executives through the analytics process and enabling them to see analytics at work, they will gain a better understanding and be able to trust and use analytics!