Fundamentals of

Analytics
 MODULE 2
ANALYTICS AS AN INTEGRAL
PART OF THE DECISION MAKING
•Understand the different cultures on building an
analytics
•Learn and understand the different integration of
analytics.
•Analyze customer behavior and predicted weather
patterns to optimize the visitor experience and fuel
sustainable profits
•Provides new insight into weather data and customer
behavior, boosting attendance and increasing retail and
food sales.
•Helps the zoo understand visit, usage and spending
patterns down to the level of individual customers, and
take time and geographic-relevant action to enhance the
visitor experience while maximizing revenues

•Enables segmentation of zoo visitors based on their

spending and visitation behaviors so that mat marketing
and promotions can be specifically tailored to each
visitor segment – greatly enhancing loyalty and retention
•Identifies low-spending visitors and targets them with
strategic direct mail offers, while also rewarding loyal
customers with creative marketing and recognition
programs
•Provides insights that enhance operational
management
•Brings analytics into the bedroom, with an intuitive set
of tools that puts the power of data into the hands of
those running the business
 MODULE 2 – SUBTOPIC 1
BUILDING AN
ANALYTICS CULTURE
Critical key components for a successful analytics
solution:
q Data collection
q Integration with multiple data sources
q Ability to create and manage single source of truth
(unique identifiers)
q Hardware sizing, performance considerations, and
scalability
Build models that Build models that
help predict the help predict the
unknown future best course of
action
• Provides information about the past state or
performance of a business and its environment.
• Provides regular reports for events that already
happened and ad hoc reports to help examine facts
about what happened, where, how often, and with
how many.
• Helps predict (based on data and statistical
techniques) with confidence what will happen next so
that you can make well-informed decisions and
improve business outcomes.
• Uses simulation models to suggest what could
happen.
• Recommends high-value alternative actions or
decisions given a complex set of targets, limits, and
choices.
• Predicts future outcomes and suggests courses of
actions to take so that you can benefit from those
predictions.
Outside-In Thinking: Keeping tabs on what others in your industry are doing.
• What makes the business tick?

• Where does the next breakthrough await?

Inside-Out Thinking: Keeping a systematic inventory of the key business

processes
• How are key decisions made within?

• What are the key business decisions?

• How they can be made more process-oriented?
• Increase market share (customer acquisition)
• Increase customer intimacy
• Increase customer satisfaction and retention
• Increase customer wallet share growth
• Increase customer profitability
• Increase traffic and conversion.
• Increase employee productivity and performance.
• Reduce cost.
Analytics Solution Life Cycle
Specific places where you do establish it (or first establish it)
should be:
• Endowed with a great deal of data that is not fully utilized
• Important to the business success
• Led by a manager who already understands the importance
of analytics
• Blessed with a cadre of people who have some analytical
skills
- Search for the truth
- Find or identify patterns and get to root causes
- Make data as granular as possible in their analysis
- Seek data, not just stories, to analyze a question or issue
- Value negative results as well as positive
- Use the results of analyses to make decisions and take
actions
- Are pragmatic about trade-offs in decision making
- “ Analytical culture - the sum total of a series of
individual attributes and behaviors that get repeated over
time. People in an analytical culture demonstrate a set of
common attributes. In our research and experience, they:
Search for the Truth. Analytically minded people don’t accept
traditional actions as “given,” but try to find out what’s really
true about how a business operates. They use analytics and
data not to appear rational and objective, but to actually be
rational and objective about the business environment. In
their quest for truth, they are intent on applying rigorous
objective logic, without preconditions or bias.
Find or Identify Patterns and Get to Root Causes. Work at
identifying patterns in data or real-world situations,
regardless of your level of ability. Identifying root causes for
problems is not just an individual task, but one that can be
built into a corporate culture.
Make data as Granular as Possible in Their Analysis. Better
analytics usually result from more detailed data and analysis.
If there is an average in your business, try to “de-average”
and understand its variations. If you’re using zip code data,
try to get census tract or even household data. If you’re
working with households, try to learn more about the
individuals who make up the household.
Seek Data, Not Just Stories, to Analyze a Question or Issue.
Non-analytical cultures use stories and anecdotes to support
their decisions; analytical cultures seek data. They know that
anecdotal evidence may be interesting, but it often isn’t
representative.
Value Negative Results as Well as Positive. Since an analytical
orientation is the application of the scientific method to
business, one key principle of the scientific method applies:
negative results are just as useful as positive ones. That is, if
you find out that an intervention doesn’t work—it doesn’t lift
sales or get a customer to buy something from you—that’s
just as useful as knowing that something does work. A
culture that is not receptive to negative results will lead
people to skew results in a positive direction—a highly
unfortunate cultural attribute!
Use the Results of Analyses to Make Decisions and Take
Actions. Making decisions based on power and politics
rather than on objective analysis is a cancer on the
organizational culture. It suggests that if you are powerful
enough in the hierarchy, you’ll get your way.
Are Pragmatic About Trade-offs in Decision Making. The best
practitioners in analytical cultures are pragmatic about this
trade-off, gathering data and employing analytics when
possible, but not delaying unnecessarily to wait for them. If
the decision needs to be made quickly, they make it quickly
based on experience and the best data available.”--
 MODULE 2 – SUBTOPIC 2
INTEGRATION OF ANALYTICS WITH
ACTION AND MEASUREMENT
“ Business challenges. Align business analytics initiatives to the
most pressing business problems your organization needs to
address.
Data foundation. The data foundation that will support the
business analytics process must be strong in terms of
reliability, validity, and governance.
 • Analytics implementation. Ensuring that business analytics
solutions are developed and provided to the enterprise with
the end goals in mind is crucial for success.
• Insight. Business analytics must transform data from
information into intelligence and insight for the organization.
• Execution and measurement. Business analytics must be
put to work and must lead to organizational action, as well as
provide guidance on how to track the results of the actions
taken.
• Distributed knowledge. Business analytics must be
communicated in an effective and efficient manner, as well as
made available to as broad a group of stakeholders as is
appropriate.
• Innovation. Business analytics must be relentlessly
innovative, both in analytical approach and in how it affects
the organization, by developing solutions that will "wow"
customers
qDrivers
qFacilitators
qEnablers
Drivers: Strategy
Two elements are extremely important to a successful
analytics implementation strategy: focus and
commitment.
The first element of an effective analytics implementation
strategy is to focus on addressing the company's business
challenges in order of priority.
However, in developing the analytics implementation
strategic plan, it's especially important to look back and
make sure you are aligned with the company's critical
business challenges with each analytics project. This will
ensure that projects remain focused and avoid expanding
in scope unnecessarily
The second element that the analytics implementation
strategy should have is the commitment of people
outside of the analytics team.
Commitment from others means they are more likely to
devote the time, the budget, and the resources to the
analytics project and have the will to see it through.
Most successful analytics projects will have at least one
other functional group enthusiastically on board.
Drivers: Metrics and Measurement
- Translate the business challenges into operational
measures that can be monitored over time
- Well defined objective means by which the company can
measure progress and business analytics impact.
Drivers: Metrics and Measurement Examples
- Increase productivity
- Increase market share
- Increase retention rate
- Increase wallet share
- Drivers:Metrics and Measurement Examples
- Increase conversion rate
- Increase customer satisfaction
- Increase average order size/number of products
- Increase average spend per customer
- Drivers:Change Management
- Must reinforce the importance of business analytics
solutions
- Must incorporate end-user needs and input
- Must involve the executive sponsors, as well as the
analytics project leaders, reaching into all project touch
points
- Must also provide a process to support the change and
help those affected understand its impact on the
organization
- What is your goal (or business question) for the project?
- What are the risks of not addressing that goal/question?
- When will you meet that goal or answer the business
question?
- What is the analytics strategy to do so?
- Whatimpact (benefits) will the solution have on our
customer-facing employees?
- How will end users be trained to use the solution?
- What resources are required to achieve your plan?
- Who will be involved in executing your plan, internally or
externally?
Facilitators: Integrated Processes
• Aims to optimize the overall success of the analytics
initiatives and ultimately deliver for the organization, with
the highest impact at the lowest cost.
Enablers: Human Capital Skills Needed
- Project Management
- Data modeling
- Data programming
- Database extraction and manipulation
- Multivariate statistics
- Data mining/exploration
- Data visualization
- Machine learning
- Marketing analytics
- Unstructured data analytics
- Marketing research
- Competitive intelligence
- Data quality/governance
- Web analytics
- Main reasons companies failed to make forward
progress included:
- “Lack of a clear implementation strategy. Despite great
analytics ideas and solutions, if there is no strategy to
put analytics into action across the organization, it will
eventually fail.
- Lack of support. If end users, internal customers, and
other stakeholders don't understand the value of
analytics and don't support the project, your analytics
implementation will suffer.
Lack of internal customer experience. An analytics solution
cannot be developed without thinking deeply about the
customer experience. Unless customers have been involved
throughout the process, it will be hard to get them committed
to using the analytics solutions or insights you develop.

Lack of executive sponsorship. The failure of senior executives

to recognize that analytics is important and to resource and
empower the analytics function appropriately will result in the
eventual failure of your analytics implementation.
Lack of analytics leadership. Team leaders who have neither
effectively communicated nor driven strategic analytics
projects based on the value of analytics will see their analytics
implementation wither and slowly lose momentum. Analytics
leaders must champion their analytics vision across the
organization.

Lack of collaboration across organizational groups. Analytics "is

everyone's business." Therefore, if your analytics solutions do
not involve multiple functional groups, they are less likely to
succeed.
Lack of integrated processes. If information and
knowledge are scattered in silos across the
organization, your analytics implementation will be
much more challenging.

Lack of skilled and focused human capital. If your teams

don't have the skills and the bandwidth to execute and
cannot prioritize effectively, your analytics
implementation will fail.
Lack of measurement or metrics to track outcomes. The
outcome key performance indicators (KPIs) should
drive the analytics plan and implementation. If
outcome KPIs are not clear, the implementation might
lead to missed opportunities
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