Are You Involved With Business Analytics?

“Raise your hand if you’re involved with business analytics.” That was the speaker’s request at the annual all-employee conference. About 15% of the audience raised their hands.

“Ok,” said the speaker “let me ask another question. How many of you are involved in drug development in one way or another?” A fair question since after all, this was a pharmaceutical company. About 30% of the audience raised their hands. The speaker looked at the raised hands and said “How do you determine the best drug development path? You use business analytics throughout the process by predicting promising outcomes and tracking clinical programs which accelerates time to market.”

She went on to repeat similar questions asking representatives from sales, finance, order management, and a few other functions. With each one, she pointed out how they utilized business analytics in their activities.

She then said. “Now, I want to ask that question again. How many of you are involved with business analytics?” This time about 80% of the audience raised their hands.

There is often a misconception that business analytics is the domain of the statistical wizards that have had intensive training in high levels of math. That’s true to some extent. They’re the ones that can sort through the incredible amount of data and determine the right models that make business analytics seem like magic. Those are the ones that exist in a department called something like “Data and Analytics”.

But, that’s not where the business analytics story ends. Financial services companies, major healthcare networks, large retailers, transportation companies, and many other industries all compete based on how well business analytics is incorporated into their operations. For insurance companies it’s about risk profiles, for healthcare networks it’s about effective patient treatments and outcomes, for large retailers it’s about demand forecasting, for transportation companies it’s about efficient routing, etc.

By not incorporating advanced business analytics into their operations it can not only risk efficiency and insight but it can directly translate to subpar financial results. For industry participants who have been able to fully incorporate advanced business analytics into their daily activities and thereby “do more with less", they create an uneven competitive landscape. Those operating less efficiently can lose customers, investors, and potentially their entire business because they can’t keep up.

Business analytics within organizations is usually a closed-loop process. It may start with the front-end complaining about not being able to work efficiently. That “problem” gets handed off to the Analytics team. With the help of Business Analysts, they develop a potential solution. The Data team gets involved to source and organize the data. The Data Scientists finalize and productionize the models. The models get deployed back to the Operations Group. It all gets incorporated into the standard operating procedure. The front-end then provides feedback to the Analytics team on the success of their work and the loop repeats itself as the models evolve.

In 2020 Erik Nordstrom, Co-President of Nordstrom stores said “Every retailer has to be a technology company.” It can also be said that “Every company and institution running a complex operation has to be a business analytics company.” Without business analytics incorporated at every level of the organization, they miss the opportunity to run as efficiently as possible and can be overtaken by competition.