Business Analytics Tips: Harness Your Data to Improve Decision-making

Many businesses that claim to be data-driven, are actually in the initial stage. What can you do to go from just collecting a bunch of data to creating an enterprise analytics system that can tell you how you can tweak your strategy to boost the profitability of your business?

We spoke to Travis Anderson, Toptal’s director of business analytics, to gain his thoughts and business analytics advice for the creation of a central role within a company, which will eliminate the bias in reporting and the significance in using information, as well as the potential risks. As director of business analysis, Anderson leads a team that facilitates data-driven decision-making linking business strategy to the data-driven processes (i.e. data analysis and the reporting process, diagnostic analytics and data science). ).

Business analytics support all areas of company, including finance, sales, marketing and operations, product and HR. Anderson brings over 10 years of experience managing and directing teams of engineers and analytics to boost business growth, such as at Vivint Smart Home Symantec, Brigham Young University and his company, Mapline. He has BS as well as MS degree in mechanical engineering as well as an MBA and an MBA, all of which are at Brigham Young University.

What Are the Uses of Business Analytics?

Business analytics enable managers to make more informed choices and improve operational efficiency by assisting managers make better use of resources and, ultimately, improve the performance of the bottom line, as per MicroStrategy’s 2020 Global States of Enterprise Analytics report .

When it comes to Toptal, Anderson identified four principals that are central to our business and the life-time worth of our customers:

  1. Customer acquisition: using information to improve the process of acquiring customers
  2. Expanding geographical footprint: understanding how to expand both physically as well as in the current client base
  3. Retention of customers: discovering points of attrition within the journey of the client
  4. Optimization of costs to acquire, retention as well as business processes

Four tenets can also be an effective way for business to assess the return on investment from the use of data as well as business analysis.

What Were the Primary Challenges at Toptal?

Siloed Analytics

According to Anderson Anderson, the primary issue he had to face when his first day at Toptal was the change in how the company approached analytics internally. At the time, the majority of the functional teams within the company were executing their own analysis. The majority of teams had a data analyst and each was responsible for their own data analysis, which was mostly focused around reporting analysis, analysis, and trend analysis. Although a culture of data existed , and line managers were using data in their decision-makingprocess, the structure was not effective.

Each team adopted a distinct strategy, which resulted in the message being mixed. Because each team had its own internal data function There was no coherence in terms and KPIs. Discussions with management were frequently focused on reconciliation which was a distraction. Because the definitions differed and the lessons learned of the information were often, ignored.

Reporting Bias

Another problem that came up from the decentralized collection of data as well as reporting is that each group was biased when it came to presenting the data. Each function chose its information to present itself in the most positive image. This resulted in a lack of focus and could lead to a inability to control.

Anderson began a comprehensive overhaul of their approach and business analysis framework. The goal was to establish an essential role: an analytics centre of excellence that is independent of the business line and acts as a point of control. Central functions ensure that the data is analyzed and collected uniformly and that bias in reporting is removed.

When the center is set up It is now necessary to make sure that it is properly staffed. First prioritization is to determine the gaps in the workforce. To create an effective team that is efficient and effective it is essential to have individuals with strong technical expertise, as well as solid problem-solving abilities, and also business expertise.

How Does a Business Analytics Center Add Value?

Based on Anderson, the main benefits of having an integrated data and business analytics function is to improve efficiency and decreasing expenses. When a business cannot measure the performance of its employees consistently it’s difficult for managers to increase the performance of their business substantially.

It is the first stage of to establish the coherence of the metrics and the measurement of an objective that is based on these agreed-upon measures. This will have the crucial impact of motivating employees. As Anderson states How do you keep staff members motivated if there aren’t any goals? Additionally, any metrics that are quantitative are superior to none. In Anderson’s view, “If you only start to gauge one aspect, you could realize a significant benefit, either because you are able to influence it, or even find it not important. .”

Anderson’s team assists with every aspect of business and conducts regular check-ins every week and biweekly each. The primary task is to ensure that there is a proper collection of accurate data. The data collection is used to achieve a behavior objective to inspire employees to perform their duties and give an “score” to their performance.

Choosing the Right KPIs

Once high-quality, consistent data has been gathered the most difficult task is to determine the most appropriate KPIs for every business unit. The process begins with the top of the pyramid. A team of business analysts lays out the strategy of the company in terms of information so that the KPIs for business analytics are valuable for providing insight and are significant at both the top-down and business levels.

The main queries that will lead to the proper KPIs are:

  • What are some main metrics?
  • Are they financially based?
  • Are they built on operations?
  • What’s the structure for what team members are doing?
  • Do individuals need to be held accountable for the achievement of particular goals?
  • What will they look like? assessed?

It is crucial that the team responsible for business analytics fully understands the business and its plan of action. At Toptal there is a strong commitment within the company to the goals of the company.

The data is processed and analyzed using a sound statistical model and forecasting. But it is important to keep in mind that the result of the analysis isn’t an actual decision however, rather it is a quantitative input which aid in making better decisions. All business decisions fall under the control of the leader in charge. There is a collaboration between the various stakeholders as well as the business analytics and data team by using an iterative approach. Once a decision has been made and the data is required to be able to support it. Not just that, there’s a periodic re-evaluation of the KPIs to make sure that they’re in alignment with the strategic goals of the business.

It is not always smooth and easy. Sometimes, there may be friction between the stakeholders since there is lots of feedback on the information. There are a few managers who are open to feedback from employees. Anderson considers his role to be offering a digestible suggestion and instructing executives on what to do with the data that are derived from the information.

Reading the Data Wrong

Anderson discussed the potential negative consequences a company could face when it has lack of internal discipline in the collection and analysis of data. In an earlier engagement the speaker had come across one company with a significant business unit responsible for a significant portion of its revenues. This unit was home to many sales representatives that together accounted for revenues that exceeded $200 million. However, this team analyzed its revenues differently from other employees and reported it on an entirely separate system.

In the course of a change in management, an executive who was new failed to recognize that the information was not constant and fired the entire team because they had received an incorrect conclusion from the data, and believed that the team wasn’t functioning. The decision was because of the incorrect and unreliable data within the ERP system. The result was an error of $50 million. This incident is an excellent illustration of the reason why master data management is essential, especially for companies that undergo M&A integrations.

Common Pitfalls in Getting Started and How to Avoid Them

Anderson has come across two typical problems that companies face when they begin to look into data analytics. The issues are between two sides in the range. In the first, some companies launch large-scale initiatives to collect data, but the results are not utilized. Another issue is when companies don’t even begin to conduct any analyses due to the low standard of their information. The key suggestion Anderson gives is that, even if the data isn’t trustworthy, taking a look at a few crucial KPIs provides valuable information. This will help the company to discover how to make its data more trustworthy.

Is More Data Always Better?

While determining the correct KPIs is crucial but it is important to remember that having too many information (or non-relevant data) isn’t always more effective. Inconsistent measurement can hinder decision-making and may cause distracting factor. It is better to begin by measuring just a handful of data points that are crucial in a consistent and accurate manner.

Anderson’s team’s performance is evaluated according to the four tenets mentioned above that include the acquisition of customers, expanding footprints retention of customers, footprint expansion, and cost optimization. Each of these areas impacts, the results are measured and quantified, thereby providing an estimate of the ROI generated by the team’s efforts. When a team performed an extensive amount of analysis, but hasn’t resulted in change, then its work is not working. In the end, success for the team is having an impact that can be measured.

Anderson’s Guiding Principles for Business Analytics

Anderson’s vast knowledge can be summarized into a few tips for business analytics to help you implement successful Data Analytics.

The primary goal of a team is to alter the minds of executives through quantitative measures and affect them daily. They will make small, incremental changes that are made effective through continual adjustments and improvements.

In addition, the business analytics team is not able to make decisions, but rather provides data that will help executives. Business leaders remain accountable for the company’s strategies.

Thirdly, the effect of business analytics should be quantifiable and demonstrate an estimated ROI.

Then, starting with a minimal number of KPIs for business analytics is superior to not measuring data in the first place. Not just that, but this process helps create the culture of excellence in data within an organisation. Businesses that implement this correctly will always be ahead of the curve even when initially it’s technical and expensive, and requires cultural shift. Businesses that persevere and can successfully manage the process are more likely to keep employees, be more efficient and create a ethics and accountability culture.

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