The Value of Business Analytics: Identifying the Path to Profitability

INTRODUCTION

As noted in Chapter 6, a measurement framework is a critical enabler for delivering tactical revolutions. Without understanding time allocations and where things could be improved, it is often impossible for managers to create the efficiencies necessary to free up time for innovation.

This alone is a good reason to establish a measurement framework. However, a good measurement framework does more than that. It also helps quantify actual return, not just planned return. Although the business case developed in Chapter 4 is essential, at best it only represents promises and intentions. This is usually a prerequisite for getting organizational commitment—without quantifying the expected returns, investment is unlikely.

A business case builds interest and hope. And demonstrating ongoing returns builds trust and credibility. Because of the high degree of linkage between business analytics and strategic advantage, this trust is an essential component in transforming organizational culture. By being able to demonstrate and quantify real and renewable tangible returns, managers make their lives far easier.

Trust helps build a belief that additional initiatives will deliver incremental value. Credibility helps streamline the capital allocation process. And, both help obtain commitment to strategic objectives, not just short-term tactical returns.

A measurement framework is the final essential component of successfully selling the value of analytics. It demonstrates in agreed, ...