3 Ways Data Analytics Delivers Business Value

During the recent StartUp Week, there were many events taking place nationwide. Data analytics was a popular topic across the board. At one of these events I spoke on a data analytics panel attended by aspiring entrepreneurs (who are pursuing ideas related to data analytics), practitioners, software developers, users, and bosses (who are paying for data analytics), …  A multitude of “what-if” questions flew in the air.  It was an exciting event for all.

The question that got everyone’s immediate attention was not one of those “what-if ...” or “imagine if …” questions.  It was instead “what is the value of analytics and how do you maximize that value?"  Based on my experience working in academe, a national lab, industry and running a tech startup, I gave my answer which seemed to resonate with the audience. Afterwards several attendees told me that they found my answer very useful, especially those who are paying for or need to justify paying for data analytics.

The question that got everyone’s immediate attention was not one of those “what-if ...” or “imagine if …” questions.  It was instead “what is the value of analytics and how do you maximize that value?"

After collecting my thoughts, this was in essence my response.  There are three components to consider when maximizing the value of data analytics in a business setting.

1. Quality Analytics. This is where you use data analytics to find errors and prevent mistakes on a per task basis.  The tasks can be about delivering external or internal services, on-time customer communication, on-time updates to KPIs on the bowling charts, timely and useful internal audits, implementing safety process, supply chain management, or even managing employee benefits. The questions you ask here are rarely binary. The normal question to ask is framed by the “degree of” as an indicator of quality. These questions can be triggered “transactionally” if it’s a B2C setting, or “operationally” if it’s a B2B setting.  This is the place where you ask for execution precision, consistency, optimization of processes and optimization of alignment.

2. Value Analytics. Here is where you use data analytics to measure, guide and ensure that your team is scoring now and will continue to score in the long run.

The “objectives” you are considering are the “value propositions” of your “offering”, which involves a workflow by a team of specialized professionals. This is where learning what matters most to people is crucial. Also “how other people think about it” is more important than “what you think about it”.  This is sometimes referred to as the “brand experience” in a B2C setting, or a “relationship / loyalty / engagement component” in a B2B or internal business partnership setting.

Value Analytics is more about “loyalty” than about “satisfaction”.  “Satisfaction” is a subjective feeling or impression. “Loyalty” is a result of whether you offer your customers something irreplaceable, which is very objective and rational. In other words, your business partners or customers can be “loyal” without being “satisfied”.  No one should intentionally create that customer segment of course, but if you do discover those loyal but unhappy customers through a satisfaction-priority matrix or an action priorities grid, you will certainly want to listen and study their feedback. Their opinions offers insight into the value proposition that really sets you apart from the rest of the world.  Honing those offerings can help set the stage for earning a bigger and more valuable customer base.

3. Strategy Analytics.  At the strategic level, you use analytics to appreciate, choose and change the world. Ok, I admit, this sounds a bit like “start up” speak,  but it makes sense when you define the “world” as your business or organization and how you envision everything coming together.  If you take a step back from the daily grind of meeting quotas and chasing KPIs, you face three key strategic elements to ensure long-term success of your business. These strategic elements are your team, your product, and your customer. What resources (and how much) do you need to infuse into each element? You'll have to make hard choices because there are never enough resources.

There are three key strategic elements to ensure long-term success of your business – your team, your product, and your customer.

• When managing a “team”, in the old time business leaders just dealt with hiring, firing, and compensation package. Now the standard includes team retention, team engagement, team development, and team motivation. To make matters more stressful for you, just throw in work-life balance, career growth and meaningful career path for your workforce, millennials, gender, race, ... As long as you know what matters most to each crowd, you won’t need to boil the ocean just to make a positive change.
• When engaging your external/internal customers, do you know how many types of customers you have? Are those customer personas changing? What does each type want most? How do you achieve customer loyalty with each customer type?  Being targeted and strategic requires that you prioritize those missions that are important and selectively give up on those missions that are unimportant. Don’t rely on your gut-feel to make those hard choices, rely on good data.
• When managing “products”, you think about the linkage between your team and your customer.  What is the biggest value and biggest differentiation that your product has? More often than not there are one or two key differentiators that set you apart from the rest of the competition.  You can ask your team to just invent those differentiators or simply hunt for them. Or, your customers can tell you their hierarchy of needs. Then you and your team can envision the best solution to meet that hierarchy of needs.

Are all three components of analytics necessary - Yes.

Are all three components dependent on each other - Yes.

Must you have all three components in place at the same time - No.

The first component, Quality Analytics, serves the field agents, those who are faced with the challenge to meet day-to-day tactical tasks. As outlined in the examples, none of those tasks are simple or easy. For instance, how about just a basic order cycle management task that is common for all web-retailers? Frequent and useful feedback really helps!

The next component, Value Analytics, serves the field generals, those who lead initiatives and are responsible for P&L. They need a day-to-day pulse on the customer’s impression of the business, on the team’s impression of the company, so that they can understand how to engage, motivate, and build deeper and more meaningful relationships.

The last component, Strategy Analytics, serves the leaders of business units, especially those facing the need to transform or risk becoming irrelevant.  It’s a walk on a tightrope. You need to find that elegant balance between challenging your team to pivot and refine by pushing them outside their comfort zone, while always steering clear of the panic zone.  The strategy development part needs to be more involving. The strategy deployment part must be so as well. Again you’ll need a good way to provide your team with deep feedback that is both FREQUENT and USEFUL.

So how do you maximize the value of data analytics?   Be in the know - know where you are, know where your vision is leading you, know what’s involved, know what resources you need, know how your team thinks, know how your customer thinks, know how your products need to evolve ….  In a nutshell, you use data analytics to learn what matters in each strategic situation.  Survature’s mantra is exactly that - we are the opinion analytics platform of choice for those who need to “learn what matters”. We are part of your data-driven toolchain for decision making.

During the panel, there was also a great question about “what data analytics can be outsourced”. I will write about my answer to that question in a different article.