Turning Analytics into Profits
I am frequently asked why so few companies get a positive return on their analytics projects. My research revealed a simple fact: Not all companies understand the complete process of implementing analytics for direct economic impact. Essentially, there are two steps in the process. First, analytics are used to discover insights, and these insights then create opportunities. Second, to make money out of these opportunities, companies have to operationalize the insights.
Operationalization means changing the behavior of operational employees to deliver the desired outcomes. This frequently requires the development of an operational infoapp that provides incentives, measures, and monitors performance. Most companies stop at the first step – the discovery of insights. A few understand that this step reveals the facts. The second step is more important as managers have to determine the incentives and measurement that would align performance with the desired outcomes.
For more on the topic, read my detailed blogs published in IT World: “Why Organizations Fail to Create Value from Analytics, Part 1” and “Why Organizations Fail to Create Value from Analytics, Part 2.”