The volume of data available today is staggering. It is estimated that every 60 seconds around 1,820 Terabytes of data will have been created, 700,000 Google searches performed along with 98,000+ tweets and 11 million instant messages. Of course, not all will be relevant to your organisation, but if data represents the ever changing requirement of our customers, shouldn’t we be interested? Business Analytics provides the only way to quickly and effectively sift through an ever-increasing mountain of data to highlight hidden trends and nuggets of information that could be vital to survival and growth.

There is no point on aimlessly analysing data in the hope that something will jump out at you.  It won’t and all that you will do is waste vast quantities of time and effort.  Like any search, there must be an objective and a plan to reach that objective.  This is where a mature approach to analytics comes in.

Stage 1: Review existing BI/analytic needs

The first step is to look at your current use to see if they cover the key questions in the business:

• What actually happened?
• How efficient and effective are our business processes?
• What is likely to happen if we carry on as we are?
• Where should we be aiming given where the market is heading?
• What could we do differently and how much would it cost?

This set of questions will almost certainly require different models (see my blog on 7 Key Analytic models).  Check what you have and note which areas are weak of non-existent.  For each weak area, ask yourself what would be the value to the organisation if you knew the answer.  You may want to ask colleagues/senior management the same question, which could be defined in terms of the threats and opportunities of ‘not knowing’.

Stage 2: Focus on the area with the most impact

From the above, take one area that has the biggest potential on improving performance (or mitigating disaster) and determine what data would be needed to provide the answer.  Remember it’s not about what data you have but what you need.  
Once you’ve done this then go and see what data exists, making a note of where it is, the cost of acquiring it and, if not available, how to get a reliable estimate.  Knowing the status/cost of crucial data is a key element in creating a strategic approach to business analytics.  Just because you have data doesn’t mean it is useful – it could just be a distraction from what you really need to know.

Stage 3: Gain experience in using a modern BI/Analytics system

Business analytic systems have changed tremendously over the years.  Today, most systems can analyse huge amounts of disparate data, quickly and with little knowledge of IT systems.  When evaluating a potential system keep in mind the types of analyses that you’ll need to answer the key business questions.  Then try out the products capabilities that support those analyses on a sample set of your data.  Check it for usability, it’s collaboration potential with other users, and how it links into planning.  The cost of acquiring, developing and supporting an analytic system should be placed in context of the benefits that will be obtained.

Stage 4:  Create a Business Analytics strategic plan for the organisation.

Armed with the above information, you should be able to create a plan that outlines the development plan for business analytics throughout the organisation.  Analytic models are never static and will always require tweaking or re-development.  That’s because the data being analysed will generate new data requirements and analyses that will be needed to move forwards. 

A good way forward is to establish a group of people to monitor the impact and potential of business analytics.  People that understand how the organisation functions, its strategic goals and have up to date knowledge of the latest development in analytic systems. An ideal place for this group is within the FP&A department

The article was originally published on the  prevero Blog