Businesses today are doing more than ever to utilize the data they take in, and it shows. They are operating with more knowledge about their business, and thus are able to successfully create a usable knowledge base that, for some, will allow them to predict positive and negative market dynamics fairly accurately. After seeing how this platform can positively affect individual businesses, many other businesses are taking to the strategies. The problem that many businesses encounter, however, is that they are woefully unprepared to utilize analytics; or, they read too far into them.
Are You Prepared?
The first thing that you have to understand about the placement of a data analytics system is that you need to have a reliable silo of information in which to work from. If you don’t set this up properly, the analysis will not be thorough enough to properly represent your business’ operations and will therefore not be as reliable as you would typically want this type of analysis to be.
To get reliable analysis through analytics, you will first want to set up a data warehouse. A data warehouse is essentially a database that is fed by your existing databases. By having all of your business’ information in one spot, it will make your analysis, whether it’s conducting analytics or intelligence reports, more accurate and reliable.
Once you have your analytics platform set up properly, you are ready to run reports. There are a couple really simple, but crucial, mistakes people routinely make when reading their analytics reports.
Correlation Doesn’t Always Mean Causation – There are times when you will be looking at two metrics and they are so amazingly similar that it can’t possibly be a coincidence. You then discover that the two seemingly correlated variables have no direct (or indirect) relationship with each other. It’s important that you don’t read into every similarity.
2. Make Sure to Keep Everything in Context – When you are actively using analytics and you start making headway in one facet of your business, it can be intoxicating. Make sure to not transfer a false optimism that other numbers will react the same way if the indicators say they won’t.
3. Just Too Much – Whether you are just tracking too many metrics, or you are tracking some that are completely meaningless for your situation, wasting time with certain metrics is just convoluting your practical understanding of your business. Scale it back for more success.
4. The “Wow” Factor – Metrics that report very positive or very negative situations will always be alarming, but if they are reported very infrequently, you can consider them outliers and exclude them in your overall report.
It’s great when you decide to let the data your business collects work for you.