Every business is an insights business, where information acts as currency. Whether it’s customer preferences or basic demographics, data helps businesses grow and succeed. Just as businesses are creating more money and products, analytics leaders are creating more data and analytics to support them. The problem, however, is that we are churning out data at a rate that far outpaces the ability for its actual use, causing not just an overload but a massive flood of wasted data.
On top of that, many businesses are using what data they can to support or confirm their decisions instead of using data to drive their actions, which is where its true value lies. A business’s data is really only as valuable as the actions it inspires.
So instead of sitting on a pile of useless data, below is an outline of a framework to help you filter out data that isn’t meaningful and drive more data-driven insights and actions.
Knowing what you want to achieve from your data and its value is the first step in gaining and understanding insights. Begin by asking yourself what are you trying to achieve with the data, what specific needs are being addressed with this data and what will addressing your needs with this data look like. By answering these questions, you can then begin to picture the end result and what your business success should look like.
Once you’ve addressed these initial concerns, you can begin to unfold the value of your data by working through the noise using the analytics value chain. This chain works by first collecting and managing your data effectively by sifting through all the appropriate data sources and determining which information is the most relevant. The next step is to perform analysis and synthesis — where patterns in data begin to emerge — to draw basic insights and answers to our key business questions. This process will begin to open the value behind the data collected, which can then lead to decisions and actions.
Once you’ve unlocked the value behind your data, how can you translate it into insights? Just as architects create blueprints, analytics leaders must also create frameworks and visualizations as a guide. Whether it’s graphs, dashboards, charts, or tables, data visualizations allow us to see analytical results, correlations, differences and other facts that are relevant among variables. Visualization is an important step as it reveals certain trends and patterns that you might not have initially recognized.
It’s also important when going from information to insight to take the time and review each individual pattern. Discuss amongst your team why each pattern is important and how it can lead to success. This will help clarify whether or not the information will be as important to the big picture.
One thing to always keep in mind when moving from insights to action is that the decision must come first. All too often, analytics leaders obsess over data at the expense of leveraging the insights to make a decision, paying more attention to the data and hoping it alone will surface a clear plan of action. However, they must instead shift their thinking from data to decision making.
A decision supply chain is a useful tool that can help facilitate the shift from data to decision as it helps to identify the raw material (data), respond to demands and distribute insights across the organization — all while continuously improving its flow. The decision supply chain forces your team to focus first on how the gathered insights will be interpreted and used later on, thus creating an action plan and better keeping you on track to your desired outcome.
Now that you understand the data and decision, as well as the action plan, how do you complete the process? The process is finalized once your insights are embedded into the operational processes, taking the data you have synthesized and translating it into a physical action.
For example, your business took raw data from shoppers’ foot traffic in a store and analyzed it to see which aisles received the most traffic. From this analysis, you were able to conclude which products are more popular and where they are located in the store. Knowing this, your business was able to act on enhancing the customer experience by improving shoppers’ access to the most sought-after products. You now know what needs to be stocked, how often it should be restocked and where it should be located in the store.
Analytics holds little value without the ability to leverage its insights to make a decision and drive a concrete plan of action. By knowing how to unlock your data’s true value, visualizing the key insights of that data, focusing on translating the data to decisions and using those insights to improve an operational process, your business will be well positioned for growth and success.
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