What is Analytics? And the 5 Factors of Success

Recently I was doing some research on google keywords and was surprised by one that had a lot of hits. It was a question, “What is Analytics”. I thought it was a great question and extremely interesting how many people searched for this definition. I’m going to answer these questions in this blog post. I hope it provides a solid definition that you can refer to time and time again.

Here is my definition of Analtyics and what I feel best encapsulates its true purpose:

“Analytics is the vehicle used to gain knowledge from data”

Tyler Koitka – Co-founder & CEO – Blueprint Intelligence

You have probably heard a great number of cliches and quotes about Analytics. They generally mention the fact that you are obtaining knowledge from information. However, I do feel many of them leave out an extremely critical point. That point is the number 1 factor for success with Analytics.

In my 20 plus year career in Analytics, I’ve worked on many implementations and alongside some great people. I’ve been fortunate to achieve a lot of great successes managing implementations. I’ve spent some time thinking back on those successes and what I feel makes Analytics a success for an organization.

What does success look like for Analytics?

Before we jump into the top 5 factors for successful Analytics, let me define what success should look like:

• User Adoption – Users are actively using the system and reports/dashboards daily. The system is being used.
• Return on Investment – If one decision made from using Analytics pays for the cost of implementing & running the Analytics system, that is the ultimate measure of success. This can often be difficult to measure so we’ve built a free ROI calculator to help you with this.
• Growth – When users are satisfied with the experience of using the Analytics systems and they are getting the data they need to make better decisions, you will have no choice but to grow. This growth will be in the form of enhancements and/or new dashboards/reports/metrics. The demand for Analytics will increase and you will need to hire help.
• User Advocacy – User satisfaction and active participation will mean they are spreading the news about the good work being done in the Analytics system and team. This will indirectly garner favor from senior management and executives. This means you will have influence that will help improve the way Analytics is being conducted.

Failure is the exact opposite of the above. It’s not hard to imagine what that looks like. You basically will have a nightmare on your hands to maintain and eventually it will be phased out by another tool.

The top 5 Factors for Successful Analytics

So, how can we avoid failure and put ourselves in the best possible position to achieve success? Here are the 5 factors you must understand about Analytics to be successful:

1. Knowledge is constructed

I am being deliberate when I use the term constructed. Every time I have seen Analytics fail it’s because the data was not crafted to provide knowledge. It was either a bottom-up approach or IT-driven. Data in its raw format, still in its native database, does not have inherent knowledge. You cannot download VBAK in SAP ERP or F4201 in JDE and know how many sales were made this month vs last month and how much of that was repeat business. Or whether you’re trending good or bad against your sales forecast. If you can, I’d like to meet you. These metrics must be constructed from that raw data and put in a format that a business user can easily understand.

2. Business requirements are critical

This is what underpins point #1. Like any system or anything that is crafted, it must be designed. In business and IT, that design is developed from requirements from the users. There’s no way around this, you must understand your users, understand what data they need and why they need it and how that interlinks with the overall business. You need to become an expert in the business itself. You also need input from all levels as well. The CXO’s will have their needs and that will translate differently on the shop floor. It’s your job to connect the two. If you take the business requirements gathering phase seriously and are thorough, I guarantee you have a 90% chance of success for your implementation.

3. It is a system, not a tool

The current market is flooded with many tools that promise the success I mentioned before. However, they fall short when implemented on their own. A mature Analytics implementation is a system made up of multiple pieces of software that collectively provide the gamut of Analytics.

Three pieces are fundamental to any Analytics system:

• Data Repository – Data needs to be stored separately to perform query and analysis optimally. It is possible to have Analytics on live business systems however it is always recommended this is kept to a small dataset and simple calculations. Generally, these are simple operational reports. For Analytics, you need a database, preferably one that is in a Data Warehouse structure, to perform true Analytical reporting. That is reporting where you are looking at historical trends, integrating disparate data, and calculating complex metrics over large data sets.
• Data Integration – You can’t get data out of a business system without a tool. These are commonly ETL tools. You need robust ETL software that can extract from multiple source systems, integrate, and transform that data and finally load it to the target Data Repository. Most modern tools can connect to a range of systems both on-premise and cloud.
• BI tool – Once you have extracted that data and performed the necessary magic to it, you need to be able to present it so humans can understand it easily. A good BI tool should be able to do that as either a report or dashboard. BI tools should also be able to support self-service analysis where select users can interrogate the data themselves and slice & dice metrics to answer on-the-spot questions.

4. Requires a culture shift

Analytics must be adopted across the business and especially at senior and executive levels. It’s an organizational function, not just an IT function. A good Analytics function will have regular meetings with Executive leadership and working sessions with user groups to ensure priorities are being met and Analytics is being effective. You can’t be successful unless you have solid partnerships in the business.

5. It constantly grows and changes

Good Analytics is never finished and constantly grows and changes. The business grows and operates, new questions are being asked, the goal posts are shifted, or new goals are set. Successful Analytics can be flexible to these changes and keep up with the business.

If you take the time to study these points and the success metrics for Analytics, I have no doubt you will be successful yourself. Especially if you put the business first for your implementation, I cannot stress enough that Analytics must be business-driven, not IT-driven.

At Blueprint Intelligence, we can help start you off on the right track for your Analtyics project. We can perform an assessment on your current and future state inclidubg a road map to get there. Please reach out via the contact form if you would like to learn more and start a discussion.