What do you think of when you hear the word "analytics"? A toolbox? A product? A specific solution applied to a particular departmental need?
Chances are most people involved with analytics today will answer "yes" to one, if not all, of these.
But as fact-based decision-making gains enterprise momentum, a growing number of people are starting to think beyond the tools at their fingertips. They're starting to think about analytics as part of the business process. Speakers at the SAS Power Series in Chicago identified this as a critical trend over the next several years.
"We're definitely seeing movement, and this will become an increasing reality between now and 2015," said Jim Davis, senior vice president and chief marketing officer at SAS. The ideal would be breaking a business process into pieces and applying fact-based decision-making from one end to another, as appropriate.
Tom Davenport, widely respected analytics expert and fellow SAS Power Series participant, provides guidance in his book, Analytics at Work: Smarter Decisions, Better Results. He recommends taking a systematic inventory and closely scrutinizing the structure and function of business processes, how decisions are made within them, and where opportunities for drastic improvement might reside.
Davenport gives nine quick examples of the kinds of business processes lending themselves to analytics. I won't go into depth here, but his list comprises business processes that are data rich; asset, information, and labor intensive; dependent on speed and timing, consistency and control, or distributed decision-making; cross-functional or cross-business in scope; or have low average success rate.
As an example of how applying analytics to business process can work within a company, he cites in his book the case of McKesson Pharmaceutical and its supply chain:
Building on its strong process orientation, the company brought together data from the sales, logistics, purchasing, and finance processes to achieve more integrated analysis and decision support. Now managers throughout the supply chain can look all the way up and downstream to evaluate the operational and financial impact of their decisions regarding delivery schedules, transportation utilization, quantity adjustments, product dating and drop shipping.
At the Chicago event, Davenport shared advice of a more personal nature relative to this trend. Today's successful analysts, great at working with the data and delivering valuable insight via reports, will likely find themselves playing a very different role when fact-based decision-making becomes routine within companies: "What we're talking about are changes in culture and influence, where you'll need to be sitting down and explaining things to people."
People in analytics, Davenport says, are going to have to make a decision: "Do you want to just do the math? A lot of the stuff we're talking about is about building relationships and selling decisions. That will make your organization successful, but it might not be for you."