The Value of Business Analytics: Identifying the Path to Profitability

DIFFERENT TYPES OF VALUE

As discussed in Chapter 2, the value from business analytics stems from the outcomes achieved, not the analysis. This is an important distinction: By definition, without action there is no value.

Understanding this value plays an important role in creating internal commitment to change. Business analytics has a key role in creating competitive advantage, but for the vast majority of teams, a wide variety of internal challenges exist that form barriers against successfully leveraging business analytics. One of the biggest of these barriers is change itself. Doing things smarter often means doing things differently, and for many organizations, this goes directly against an inherent cultural aversion to change.

Convincing people to do things differently is not easy; we are creatures of habit, and trying to get us to change is notoriously difficult. It follows that if you want people to change, you need to give them a good reason.

Change management is a complex topic in its own right. Within this chapter, we will focus on one of the ways of encouraging this initial change: providing specific evidence on why the change is necessary or a good thing. Doing so requires that the value of the change be defined; without explaining how the change will make the organization or individual better off, it can be exceedingly difficult to convince people to do things differently.

An extremely important qualification is that while defining the value creates a reason to change, ...