Business First, Analytics Second?

I recently participated in a Dell Digital Business Services and IIA-sponsored tweetchat on a “Business-First Approach to Analytics.” I will describe the topic and what it means to me first, and then describe some of the more interesting tweets during the chat. If you’d rather review the chat itself instead of my summary of it, it’s here.

You may feel that “business first” is an obvious approach to take with analytics, but I assure you that it is anything but ubiquitous. It means that business objectives drive the business domain to which analytics are applied (what I have usually called “targets”), there are business objectives in place before the analytics are generated, and business considerations constrain the time and expense that are devoted to the analytical exercise. That may sound less fun than analysts running wild in an analytical sandbox, but it is generally the most effective and efficient approach to analytics.

The alternatives to business-first analytics are seen all the time in practice. Here are some commonly-overheard comments that effectively endorse other approaches:

  • “I just learned this new analytics technique at a conference, and I am trying to find a way to use it on our business;”

  • “We’re not sure what we’re going to do with the data, so we’re going to put it in the data lake (or data warehouse or Hadoop cluster) and eventually we’ll figure it out;”

  • “We bought this cool new data discovery platform to make our most aggressive data scientists happy with the capabilities we provide.”

These types of comments suggest, of course, that analytics can be driven by such factors as methods, tools, and available data. Certainly we live in a time when all of those resources are very much in evidence, but we have to be careful not to let them take precedence over business objectives. In the tweetchat I commented along these lines (using @tdav):

Tom Davenport@tdav

Alternative is technology-driven or data-driven--neither ensure business value #delldigitalbizchat

10:04 AM - Dec 11, 2015

Tom Davenport@tdav

Technology-driven means answers searching for problems #delldigitalbizchat

10:04 AM - Dec 11, 2015

Tom Davenport@tdav

Data-driven means mucking around in data without knowing what you are looking for #delldigitalbizchat

1

10:05 AM - Dec 11, 2015

Tom Davenport@tdav

Two basic approaches to adopting analytics--1) solve a particular problem; and 2) build general analytical capability #delldigitalbizchat

4

10:14 AM - Dec 11, 2015

[I said later that I thought the latter was a better approach].

Most of the participants in the tweetchat seemed to agree with the business-first idea. That was certainly the case with Raman Sapra (@raman_sapra), my co-tweeter and the global head of Dell Digital Business Services. Sapra oversees services in a lot of different domains for Dell—cloud, mobile, and social media in addition to business intelligence and analytics, and I got the strong impression from my collaboration with him that he believes in a business-first approach to all these techno-domains.

With regard to business-first analytics, Sapra made tweets along these lines:

Raman Sapra@raman_sapra

The use cases for analytics stem from business problems that organization face. Business first approach is critical. #delldigitalbizchat

2

10:06 AM - Dec 11, 2015

Raman Sapra@raman_sapra

Business should precede any technology decisions when it comes to #analytics @tdav #delldigitalbizchat

10:07 AM - Dec 11, 2015Raman Sapra@raman_sapra

Business-First approach is about looking at business priorities as a guide for #analytics technology decisions #delldigitalbizchat

4

10:09 AM - Dec 11, 2015

Sapra also cited the Dell–IIA 2015 Advanced Analytics & Big Data Adoption Reportsurvey finding that 68% of business decision makers used analytics insights as part of their strategy. He also noted later in the chat that smaller companies particularly need to scale up their analytics capabilities.

One expert participant who validated some of these ideas was Diego Kuonen (@DiegoKuonen), a Swiss statistician and data scientist. He has a set of four rules (embedded in this online presentation) to ensure successful outcomes in an analytics project, which he attached as a tweet. Two relate to this topic. One involves, “Having a strategy for the project and for the conduct of the analysis of data (strategic thinking).” Most strategic thinking certainly includes thought about the business objectives. Secondly, he notes that good analytics projects mean “Applying sound subject matter knowledge (domain knowledge), which should be used to help define the problem”…[he mentions several other benefits]. In analytics, domain knowledge means knowing the business process and problem to which analytics will be applied.

Some people issues came up in the chat as well. I said that:

Tom Davenport@tdav

To make this work, analysts need to understand business, and business people need to understand analytics #delldigitalbizchat

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10:07 AM - Dec 11, 2015

And the comment was retweeted with an “Amen!”

It was relatively difficult to find chat participants who disagreed with the “biz first” idea, but one did emphasize a distinct aspect of business value. Rebecca Blackmore (@RBlackmore91) tweeted that:

Rebecca Blackmore@RBlackmore91

A2a: Organisations should be adopting analytics that mean something to the brand. #delldigitalbizchat #socialbiz

1

10:14 AM - Dec 11, 2015

She also raised the caution that:

Rebecca Blackmore@RBlackmore91

A2a: Organisations should be adopting analytics that mean something to the brand. #delldigitalbizchat #socialbiz

1

10:14 AM - Dec 11, 2015

Raman Sapra and I translated Blackmore’s brand-oriented comment into the importance of customer and social media analytics. Sapra elaborated on the latter topic as:

Raman Sapra@raman_sapra

A2 Basically leveraging social data to create comprehensive customer profiles and then creating propensity scores #delldigitalbizchat

10:19 AM - Dec 11, 2015

When asked by @marketingwendy (presumably a marketer):

wendypdx@marketingwendy

Replying to @tdav

.@tdav @raman_sapra what type of customer data yields greater insights - EnterpriseCRM data or real-time social info? #delldigitalbizchat

10:20 AM - Dec 11, 2015

Sapra diplomatically (and correctly, in my view) replied that both are needed for success.

One topic in the tweetchat involved the key drivers of leveraging analytics for digital transformation. My argument was for:

Tom Davenport@tdav

A3 Focusing first on digital analytics, customer experience analytics, loyalty analytics #delldigitalbizchat

2

10:22 AM - Dec 11, 2015

Sapra advocated:

Raman Sapra@raman_sapra

A3. You could start with customer journeys, then get to operational excellence and then get to new business models #delldigitalbizchat

10:25 AM - Dec 11, 2015

Blackmore then tweeted her preferred driver:

Rebecca Blackmore@RBlackmore91

A3: What are the aims & objectives for the business for the year? Align your anayltics with them and your business goals #delldigitalbizchat

1

10:26 AM - Dec 11, 2015

The final topic of the tweetchat involved examples of companies that had done an excellent job of driving analytics from a business perspective. Sapra gave his answers by industry, including supply chain optimization in manufacturing, population health and patient readmission in healthcare, fraud in banking, telematics in insurance, and promotion effectiveness in retail. He gave a specific example at the University of Kentucky, which used analytics to reduce student attrition by 2%.

I provided two specific examples with different emphases. Procter & Gamble (an IIA “Excellence in Analytics” award winner in 2012) is primarily focused on analytics to improve internal decision-making, and they’ve done a great job of it. GE, on the other hand, is primarily using analytics in customer products and services—particularly around industrial devices and in the Industrial Internet. Of course, there are many more possible examples, but you can only say so much in 140 characters and half an hour.

Given those constraints, I felt that the tweetchat managed to shed some light on an important and sometimes complex subject—the relationship between analytics and business strategy and objectives. Now that Twitter is reportedly thinking of extending the character limit from 140 to 10,000, perhaps future chats will be much more verbose!