Insights through business analytics
Balasubramanium Venkitachalam
05/07/2007

"Analytics" refers to the collection of statistical approaches for mining data in order to decipher the influence of key business metrics on return on investment (ROI).

The biggest challenge in applying analytics successfully is to get the relevant business intelligence to begin with. This involves three stages: collecting the right information; storing it in a convenient manner; and exploiting that information. Analytics comes in at the third stage. How will you wisely exploit the information recorded and stored so you can manage better?

A six-step process is involved:

1. Set your Key Performance Indices (KPIs)
This requires a proper definition of each target that must be set from the beginning, be it sales, customer acquisition or loyalty measurement.

2. Collect data
Once the KPIs have been set, relevant data collection can start. You can collect data on any facet of the business including market share, customer purchase behaviours and macro trends in the market. This might also include implementing a system to capture all the below-the-line input from the trade.

3. Create a datamart (datawarehouse)
This is similar to the "store" stage in the three step process and it is where business intelligence is important. The challenge here is to store all relevant forms of information in one place.

4. Analytics
A key issue with analytics, as outlined above, is that many organisations proceed with it without setting their KPIs. However, if done correctly, it is this stage that allows for the move from diagnostic to predictive, integrated insight. This is also where the most value-add can be achieved.

5. Create a dashboard
Here, all the different parameters can be looked at. Each metric covers a different area, for example metrics for financials, market share, customer loyalty and so on.

6. Monitor
All the parameters must be continually and constantly monitored. You can measure where you are going right and where you are wrong and put recommendations into action.

Implementing the six steps will help build value and innovation, and it is important to work through all of the steps. Each is essential to ensuring organisations get the maximum value from analytics.

Analytics is now a more understood, friendly and valued tool for business but clients need to be realistic about what it can do. The technology alone can't perform miracles. Each element is not mutually exclusive so storing the data without undertaking the analytics will not be beneficial. Integrating with consumer insight in order to view the picture from a wider angle, is key.

- Balasubramanium Venkitachalam is Chief Executive Officer of Meritus.

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