Imagine you’re trying to get fit and make healthy decisions…
When presented with the choice between a salad or a sandwich, most people assume the salad is the healthier option. But, if more information is provided, you might learn that the sandwich is made with lean meat and light condiments while the salad is smothered in high-fat dressing, croutons, and cheese. In any given scenario, access to more information improves our ability to make better choices. Such is the case with advanced analytics where raw data can be utilized to predict the outcomes of various business decisions. Taking advantage of advanced analytics can positively impact the way you approach your business and improve how you plan for the future.
Whenever we make a choice, there is an assumed risk. Before advanced analytics, businesses relied on experience and intuition. Now, advanced analytics, A.I., and other technology-focused tools are readily available to improve decision making by reducing the uncertainty of outcome. Some examples include:
- Retailers (both physical and web-based) are using communication tools to help remind, inform, and engage customers (i.e. cookies, ads, apps, and email subscriptions).
- Customer service groups are developing techniques to move customers to correct and informed sources (i.e. automated phone and ordering systems save money and provide improved service).
- Things like weather, sales forecasts, and operational processes can be more accurately predicted and accounted for when making decisions.
- Medicine is making major breakthroughs in diagnosing and treating disease with improved statistics and analysis.
So, how can you implement Analytics to improve the way you run your business?
Most organizations are based on hierarchy, but this system is obsolete and, more often than not, fails. It is a structure that rewards people at the top who may not be competent rather than seeking expertise. We should constantly be striving to improve and that is impossible to do if we rely on an inflexible system. Technology is constantly changing and we need to adapt accordingly. This means that the person on top may not have all the answers as new information becomes available.
Analytics provides a way to develop new solutions and consider alternative answers to problems. Through collaboration and analysis, businesses can develop more efficient structures that rely on expertise via a variety of resources. Adding new positions and creating functional groups (where individuals or departments are in charge of their own specialty) will encourage more educated decisions and reactive change.
Include Diversity and Debate.
Informed decisions require a variety of input and diverse skills to manage that input. It’s always important to consider various perspectives and options. As technology becomes more complex, additional expertise, teamwork, resources, and responsibilities are required to manage operations.
Many retailers are still struggling to incorporate things like the Internet, cloud, E-commerce, and social media into their structures. Operational issues like inventory management and response time are becoming critical marketing tools—making it clear that operations is now as important as marketing and merchandising. Data analysis can provide insight into where your team needs diversification and improved expertise.
Pay Attention to Data.
Frequently, we think we know best, even when data tells us otherwise. Too often, analytics are ignored due to pride or a “we’ve always done it this way” mindset. A great example is the marketing of shoes. It was once the belief that only women would buy unlimited amounts of shoes. However, statistics have shown that, nowadays, men not only purchase more shoes, but a variety of types of shoes.
Demographics all depend on a wide range of variables including age, location, income, etc. This can make finding a target audience complicated, but all of that information can be found using analytics. It’s imperative to consider this data when developing a marketing strategy. So many businesses think everyone needs their product when, in reality, most people don’t need any product. So, if you want to figure out who will buy, make decisions based off supported data and hone in on your demographic.
Focus on Process Not Plan.
Many experts tout that the holy grail of a successful business lies in the plan. However, the process of implementing that plan is far more important than the plan itself. Generally, plans are static, lack insight, and are missing operational details. Not surprisingly, this results in poor execution. For example, plans seldom predict and account for rapid changes in the economy. A successful plan is flexible and can adjust accordingly when those inevitable and unexpected obstacles arise.
Consider dieting. You can design a great weight loss program, but if you can’t properly implement that program into your lifestyle, you aren’t going to lose any weight.
Don’t Forget Intuition.
While advanced analytics provides astute insights for business decisions, intuition is still an important factor. In particular, the more creativity and uncertainty involved in any given situation, the more intuition will be required.
Balancing intuition, experience, and analytics can be a real challenge. It also becomes even more complicated when we rely strictly on one method. We love to hang on to our hunches and old ways of doing things. We even twist facts and ignore reality to provide continuing support for an argument we believe to be true. But, we need to invest time and money to analyze, filter, and review information. New analytical tools can enhance the flexibility, testing, adapting, and evaluation of alternatives.
And remember: In any decision making process, the focus should always be on maintaining objective perspectives and eliminating sources of bias in both the process and the application.
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