You have invested in an analytics team, or a consultant, but one way or another you now have an opportunity to learn more about your business. Now what do you do? It is tempting to put together a laundry list of metrics that you want to know. That may even be what your analyst asks of you.
You likely will end up with exactly what you asked for but not what you need.
The Greek Philosopher Plato points out that “A good decision is based on knowledge and not on numbers.” The key to a successful analytic project is a clear understanding of the underlying business question. The better the business question is understood and agreed upon, the more effective the analysis will be.
A good set of business questions should provide clarity about:
- What you want to know
- The audience of the analysis
- The decisions that will be made
- The scope of the decisions that will be made, will it lead to operational decisions, strategic decisions or simple curiosity
- Who needs to be involved
Putting together business questions is often overlooked during an analytics project. Consider the business questions that you ask are the foundation of the analysis. You would not want to work or live in a building where the foundation was just thrown together hap-hazard.
An example from a Financial Services company I was working with, we had a partner request a project with the business question of “What is our bill pay adoption rate and how is it changing over time?” After sitting down with the partner, we dug deeper to understand what their underlying concerns were.
Because of the conversation we came up with a set of business questions that act as a solid foundation. This is what we came up with:
- How do our checking customers pay their bills? Do they use our Bill Pay service, the biller’s Bill Pay service or other channels?
- How has the share of bill payment shifted between our service and the billers over the past two years?
- How does a customer’s channel of choice affect their loyalty and profitability?
- How can we improve the customer’s experience while increasing loyalty and profitability?
The original question invited the analyst to run off, put together an answer and give the numbers back to the partner but that would lead to another set of questions, more waiting for numbers and frustration by the business line and the analyst. The business will complain that the analyst “just doesn’t get it” while the analyst labels it “scope creep.”
The second set of questions lead to a more comprehensive view of the problem. It creates a clearer understanding of the problems that are being resolved. Framing the business questions the way we did we ended up with a more comprehensive data set along with more collaboration between the analyst and business and information, not just numbers.
So, who is responsible for coming up with a business question? It takes a village. The analyst should have knowledge on the data and its limits. They may have insights into the business in addition. The business partner plays an important role that cannot be duplicated. What keeps them up at night? What do they wish they understood more about the business? What understanding do they have because of existing reporting, and what is missing?
Don’t forget to bring other partners and disciplines along. In the case above we brought in the customer experience team to help us define issues and solutions for the customer experience.
It might seem that this commitment up front slows the process down. After all, the initial question could be answered with only a few hours of work but the result would have ended up with numbers that lead to more questions. The reason that you have invested in an analytics project is to make a better business decision. Make sure that you are giving, or getting, information and not just numbers. Spend a little bit of effort up front, collaborate along the way, and you will find a lot more mileage out of your projects.