Whether your organisation can become data-driven, and to what extent, will be an important factor in its eventual success. Using analytics to drive competitive advantage can make a big difference, but there are a number of things you will need to keep in mind when doing so.
1.You must work out what you need to know, and the problems you are trying to solve
To get the right answers, you need to ask the right questions. There is a reasonable chance that the information is there in your data and just needs to be unlocked, but you need to know what you are looking for. This means being very clear about the questions or problems that you are trying to address. For example, Aviva is using applied analytics as a way to improve customer segmentation. The company wanted to be able to design better, more successful marketing campaigns that would be more tailored to customers, and therefore generate the desired actions. As a result of the new segmentation, both profitability and customer satisfaction have risen, showing the direct impact of advanced analytics on the bottom line.
2. You do not necessarily need an enormous amount of analytics knowledge to benefit
Many organisations are put off trying to use analytics because of a perception that analytics tools are complex, or because they simply do not know what tools are available, or how they can be used. However, analytics tools are becoming increasingly accessible and flexible. This makes them suitable for a wider variety of users, including business users and citizen data analysts – business users with some knowledge of analytics – as well as pure data scientists. This is especially useful for smaller firms, as they tend to lack the big IT departments and range of skills to operate specialist tools. Visual analytics tools are also particularly helpful, because they allow insights to be seen clearly.
3. You don’t have to change the whole world, only do things better than the competition
Gaining a competitive advantage only means doing things better than your competition. If your industry has not yet adopted analytics in any big way, then just dipping a toe in the water could be enough to give you an advantage. In other words, you do not have to adopt advanced analytics wholesale, across every aspect of your business, all at once. Instead, you can start small, perhaps by using just one analytics tool or application through a cloud platform, and for just one purpose. You can then scale up as you need, both in terms of the software that you are using and the range of ways in which you use it, to sustain your competitive advantage.
4. One of the best sources of insight may be unstructured data
Those new to analytics may think of data as being all about numbers, which may, in turn, be quite daunting. However, one of the most powerful sources of insight can be unstructured data such as text – from emails, customer feedback, or your customers’ social media posts, for example. Text mining is a particularly good way to explore this kind of data. It has been used by a wide range of organisations and individuals, across sectors from health care to national parks. It can also be used predictively, for example, to analyse social media messages and identify customers likely to leave imminently, so that you can take action to reduce churn.
5. Real-time analytics may be useful, but it is not everything
There is a lot of buzz about real-time analytics at the moment – the ability to analyse data as it is generated and at the source to provide insights in the moment. Real-time analytics definitely has its place, for example, in enabling businesses to respond rapidly to customer activity. However, “real-time” is not as important as “right time,” or analysing the data at the right moment to ensure that you respond effectively to your customers. For example, real-time analytics will identify customers who leave something in their shopping trolleys and navigate away from your site. It will not, however, tell you if you need to do anything, or what actions would be effective. It may, therefore, be more important and effective to use the data that you already have and draw worthwhile insights from it, rather than worrying about streaming data and real-time analytics. You need to be able to walk before you can run.
Start to build your competitive advantage with analytics
You are going to learn how to:
- Understand analytics in a business context.
- Build your analytics road map.
- Apply an effective data strategy.
- Put descriptive statistics in action.