The Value of Business Analytics: Identifying the Path to Profitability

SUMMARY

Being able to quantify real-world measures is critical. Without this ability, teams often find it difficult to:

• Maintain strategic focus in the face of competing priorities
• Build trust and internal credibility
• Seek additional investment
• Optimize their internal activities, giving them the ability to scale

By establishing an effective measurement platform and maintaining a focus on automating everything that can be automated, managers can overcome these challenges with minimal incremental workload. And by applying more advanced techniques such as experimental design and sampling theory, managers can boost the effectiveness of analytics even in highly complex situations.

For most teams, this involves the following five steps:

1. The team identifies the types of measures of most interest, ensuring that they are comparable between initiatives and processes.

2. The team establishes a performance measurement platform to support visualization and management by exception.

3. Creating automated measurement processes for these measures becomes a standardized delivery milestone for specific types of initiatives.

4. The outputs of these measures are used to justify the value being created and target optimization activities.

5. Execution and monitoring processes are extended and/or modified to support champion/challenger processes and possibly experimental design.

Establishing a measurement framework forms the final part of a comprehensive strategy to achieve success through business ...