Business Analytics

If you’re watching for the next fad, you might just have found it in this increasingly fashionable place. A place with a history that is littered with challenges but, thanks to massive growth in data collection is now the next frontier.

Taylor and the work study movement produced real business gains, but only in very repetitive environments. Operations research was jealously guarded by the boffins. The advent of IT produced a revolution in data entry, but not extraction. And only a few of the enterprise systems are fulfilling the promise of business breakthroughs from numbers.

Why is it so hard?

We think the clue is in the one success area – accounting. In most places the accountants have a good understanding of the numbers that drive the business. They have to, otherwise they can’t keep the books. And even they find it easier to track the financials than the other numbers. For most other parts of the business the best knowledge is of One “Key” Measure. Perhaps it is customer transaction numbers. Maybe cycle time.

Otherwise, making sense of the business in a quantitative sense needs a lot of data and even more analysis. Too hard and too expensive when you are offering to go fishing in waters that may have no fish.

So should I give up now?

No! Don’t go yet! We have found repeatedly that the secret of improving the business through analysis lies in three rules.

  1. Keep it simple. If you need to spend 1% of your revenue collecting activity based timesheets, you may have missed the point. The back of the envelope assessment is often pretty close to the ‘correct’ answer. We don’t carry a stock of scrap envelopes, but we do prefer the focussed measurement project to the exhaustive one. Sensible questions, near enough measurement, real answers.
  2. all the variables. Too many projects count the dollars, the minutes, or the failure rate. With our process view on life, we identify the mix, and then measure each significant element. Don’t tell the orchardist that he can’t think about apples and pears at the same time.
  3. Involve staff. We consult widely with staff to develop the measures and then again when we report back. We have to use quick-to-understand graphics rather than close packed tables, but is that a problem?

Don’t forget your staff understand much more about their business when we’ve given them the numbers.

So if you think that a quick peek at some numbers might give you real insight, try peeking at numbers with fives and nines in them.