Taking Analytics for a Test DriveBy Jane Griffin | Posted 2012-02-15 Email Print
Know the Risk: Digital Transformation's Impact on Your Business-Critical Applications REGISTER >
A pilot program is often the most manageable first step to starting a business analytics journey.
The goal of business analytics (BA) is to help organizations make better decisions. Whether management wants to know the next thousand customers the organization is likely to lose, or what location makes the most sense for setting up a new distribution center, business analytics can provide actual answers to complex questions, as well as a path to improved performance.
Still, many companies are reluctant to start a BA initiative. For some, the idea of unearthing the necessary data seems daunting. For others, the job of securing cross-functional buy-in and participation seems next to impossible. For most, the question, “Where do we start?” looms large.
A pilot program is often the most manageable first step on an analytics journey. Effective pilots share several characteristics, including minimal initial technology and infrastructure investment, simplicity in the approach and involvement by a business owner who “gets it.” Because a pilot program is a highly visible initiative, other parts of the organization will watch to see if the benefits were worth the effort. So it’s critical to have the proper focus from the start.
An analytics pilot program should:
• be important enough to matter, but focused enough to manage;
• have goals that are achievable without the need for new infrastructure or large technology investments;
• be simple in approach and refined in scope to prevent disruption to the business before, during or after the pilot;
• have support from a business owner with a vision for how improved hindsight, insight and foresight can improve decision-making and operations within that function; and
• address an area that is highly relevant and current, but
which many enterprises may not have a “data” handle on yet (cloud computing,
social media and mobile analytics, for example) to offer immediate business
Choosing Your Route
Once these critical requirements are met, it is time to explore the functional areas and project types that make good candidates for a BA pilot, such as customer analytics, supply chain management, finance, human resources and risk assessment.
A customer analytics pilot can offer tangible benefits quickly. For example, a large, national investment bank gained rapid results from its customer analytics pilot program. Looking to enhance its customer segmentation capabilities, the bank undertook an effort to reclassify customers into segments that had the greatest potential for growth. The project team segmented customers by brand fit, revenue potential, potential growth rate, current accessibility and market fit.
As a result of the pilot, the bank was able to identify and target a new customer base and focus its marketing efforts on previously untapped segments. The new segments were single female investors older than 35, risk-averse immigrants and middle-income customers that were atypically risk-inclined.
Forming an Effective Team
A successful BA pilot leverages the skills of people in the appropriate areas and takes advantage of talents that may not be evident in an individual’s current role within the company. For example, a business may identify people who are passionate statisticians and analytical by nature, giving them an opportunity to participate in the pilot program. This approach builds analytics champions and makes efficient use of existing resources without hiring from outside. These individuals can then take the good news of analytics to their functional areas.
Here are other roles critical to a pilot program’s success:
• The executive champion is a senior-level executive who can establish the vision, demonstrate the value to other senior-level staff, analyze and measure results, and celebrate the benefits.
• The business liaison can translate what is happening at an analytical level into the language of business value.
• Analytics professionals are skilled architects, developers and visualization resources who work as troops “on the ground.”
• Business partners are external resources experienced in the business, process or technology aspects of analytics; they may be willing to put some skin in the game.