5 Steps to Building a Winning Analytics Strategy
- Antonio Lizano
- November 2019
Analytics has been hailed for the benefits it offers including increased sales, in-depth and actionable insight on customer preferences and reduced churn among others. More and more businesses are investing heavily in advanced analytics software to aid them in making sound and data-driven decisions that will ensure they remain at the top of the industry. However, it should be noted that analytics software within an organization is worthless if there is no value-creation strategy for its implementation. Besides, there are many challenges regarding the successful deployment of analytics in an organization. For this reason business leaders and managers ought to remain committed to building a winning analytics strategy for their organizations to realize the benefits and full potential of the technology. In developing an analytics strategy and accomplishing its underlying goals, the following steps will come in handy to help with the integration of analytic software into the business’s strategic vision:
1. Develop a strategy map
This is the initial step in developing an analytic strategy. The strategy map will serve as a tool to construct the framework of the vision cast by business leaders for a specified period. Different perspectives within a business organization should be included to achieve a comprehensive set of objectives. With a strategic vision having various aspects, a creative dialogue ensues to complete the strategy map.
2. Determine key performance indicators (KPI’s) and metrics
After the first step, determine the KPI’s and metrics used to build them. This is vital in developing an execution plan for the strategy. Developing KPIs involves analyzing how various metrics support the underlying objective in promoting the strategy. Business leaders and managers need to commit most of their time to this step since its measurement is vital in helping leaders determine the condition of the strategic goals. If measurements show that desired KPIs levels are not met, then corrective actions must be taken to realign the tactical objectives with the strategy.
3. Choose the data sources and solutions used
Upon building the strategy map and determining the KPIs and metrics, data sources and analytic solutions used must be identified. In this regard, it is critical that business leaders commission data experts who will build an analytic solution to assist the business with monitoring KPIs and strategic metrics. This is vital in obtaining timely and actionable data for monitoring the strategy. In turn, the analytics solutions will offer business leaders and managers clear feedback on actions recently taken and guide them in making any necessary adjustments whenever possible.
4. Create a balanced scorecard
Next, in order to allow the entire organization to stay united in accomplishing the strategic objectives laid out in the strategy map, the strategy should be synthesized into one balanced scorecard. This way, management will be able to place a score on each KPI as related to the strategic objectives set. Further synchronizing all the single scorecards together will create a balanced scorecard that business leaders and managers will monitor. The balanced scorecard will be vital in alerting managers whenever various KPIs are not performing as expected. This way, problems will be identified in time and actions that don’t align with the strategy can be prevented. The balanced scorecard is very helpful in taking corrective actions based on the problem identified. Sometimes, alerts can be sent via email or phone hence the balanced scorecard offers great value as managers and business leaders remain engaged with the strategy.
5. Execute with performance management
Businesses can establish performance management initiatives for all employees through an analytics solution and a clearly defined strategy. A clear communication strategy is vital to guide employees in how they carry out their daily tasks. This will help bring some rhythm into the working environment. However, if the rhythm doesn’t support the strategy, then the manager takes responsibility to inform employees how to correct their actions and align them with the strategic vision set out. An organization can go further to offer incentives or use other reward programs to encourage and motivate actions aligned with the strategy.
Analytics will always remain a crucial aspect of the modern technological economy. It is vital in putting the vision and mission of business organizations into action by ensuring the best decisions are made to avert possible losses or problems. However, it all must start with having an effective analytics strategy. This guides the way in which tools deployed for the same function can be effective in monitoring and analyzing to help make sound, data-driven decisions that create value. Analytics are the future of businesses, especially now that the amount of data is growing exponentially.