Donald Rumsfeld said, “…we don’t know what we don’t know.”
In a climate of increased competition and diminishing resources, organisations are seeking ways of creating a distinctive ‘edge’ over their competitors and identifying operational efficiencies. Organisations are adopting analytics to meet these needs.
So what does ‘analytics’ actually mean?
Despite centuries of use we all have our own interpretation or definition. Even the Roman Empire used analytics to understand their regional dominance. For example early analytics underpinned the first noted census in 443 BC which they then used as a decision making tool to understand the services required for the efficient running of their economy.
Today mathematics and enumeration are commonly used forms of analytics. They measure with accuracy activities within the economy and drive effective resource planning. Mathematics has also led to the formation of statistical analysis. This involves the science of approximation and explanation, not only how things fit together, but what will happen in the future.
Analytics is a practice of sifting through and analysing whatever data you have to reveal trends, correlations, and other patterns in the data that help you answer questions like:
* Why are we getting these performance results (as indicated by our performance measures)?
* What changes could we make to get better performance results?
* What performance results are we likely to get in the future?
What does 'analytics' do?
As businesses and governments have more data available and more complex issues to solve, the convergence of traditional enumeration and statistical analysis has occurred. Analytics underpins both qualitative and quantitative output, so organisations can describe what has happened and what will happen consistently, reliably and with validity.
These analytics techniques are applied in today’s world to determine such things as the identity of fraudulent activities or whether a specific demographic will take up a government service. Commercial organisations use analytics to market their industry presence, or to competitively determine the drivers of the market and how to acquire that market share. It helps them understand their distinction, how to drive that distinction and to maintain the edge over their competition.
Analytics is the union of rigourous statistical analysis techniques with technology that makes data more easily accessible and automates the analysis. So you don't have to have statistical or IT expertise to do it.
Why go down the 'analytics' path?
Analytics allows managers and decision makers to:
* optimise key business processes by pinpointing the factors that most influence overall process results;
* identify the best customers by understanding customer preferences and buying behaviours;
* choose the right policy by exploring the impacts of different actions on possible future outcomes;
* minimise inventory and maximise the availability in supply chains; and
* allocate costs accurately and understand how financial performance is driven.
Analytics is the engine behind real performance measurement. It gives you the information that helps you isolate the causes of poor performance, and the points of leverage to accelerate performance improvement.
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