A Step-by-Step Guide

to Begin With Your

Analytics Initiative

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What Is Analytics?
It’s Your Ability to Measure, Classify and Decide

Measure Classify Decide

• Identify key performance • Blend disparate data sources • Identify creative choices
indicators (KPIs) • Drill into details • Build transparency into who
• Set goal values for • Identify the most important makes decisions and how
performance attributes • Conduct experimental design
• Monitor actual values against • Find clusters • Provide simulation, optimization
goals and driver-based planning
• Find associations
• Determine leading indicators • Introduce automated rules and
• Create custom groups
• Use time series analysis decisions
• Build taxonomies
• Forecast performance • Enable extreme devil’s
measures advocacy
Holistic City View Across Stakeholders
Blend disparate data sources; measure with precision; classify with granularity; apply to decisions

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Who Will Do the Analytics?
Cross-Functional Teams

Domain
Specialists

Data Data
Engineers Scientists

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How Will We Deploy Analytics?
By Taking a Prototype-First Approach
SLA

Production: Analytics content has gone through a rigorous validation process and
Months
can be disseminated and used widely across the organization.

Pilot: Analytics content has been created by end users and is worth sharing,
Weeks
but has not been thoroughly validated.

Prototype: Analytics content (such as reports, dashboards and predictive models) Days
is created with little or no oversight. Users are empowered to integrate different
data sources and make their own calculations.

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Why Will We Deploy Analytics?
Start With Three Common Business Objectives

▪ Forecast precisely to allocate resources, such as headcount, budget and inventory in

Resource Allocation
a way that results in a quality outcome while keeping costs low.

▪ Identify more granular microsegments to personalize business processes and

Conversion
improve conversion ratios (such as prospects to customers and open to closed
Optimization
trouble tickets).
▪ Create comparative benchmarks across a peer group of individuals or workgroups to
Outlier Detection find positive and negative outliers. Learn from the positive and remediate the
negative.

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A Simple Plan for Analytics
S. No. Step Description
Communicate the analytics
1. • Use the “measure, classify and decide” model to communicate a vision for analytics.

A Simple Plan for Analytics

vision
Identify a KPI or metric that • What measure does this department really care about — cost, quality, growth, satisfaction, utilization or
2.
matters churn?
Set a goal value for what
3. • What is the goal value for this metric?
the measure ought to be

4. Report the actual • Compare the goal to the actual.

Establish a cross-functional • Form a team that includes a data engineer who can write code and integrate data, data scientist (or at least
5.
team someone with quantitative skills), and someone with business process domain expertise.
• Instruct the cross-functional team to build quick prototypes. Blend data, analyze and report the results.
6. Prototype first
Ensure prototypes are contained. Build many analytics prototypes.
• Overlay a classification system on the metric. What describes the variance between the goal and the actual
7. Create analytical insight value of the metric? Look for important attributes, clusters, associations and so on. Use granular classification
to discover an insightful analytical pattern.

• Introduce a decision management approach with transparency about who the decisions makers are, what
Apply the analytics insight
8. information they considered and how the analytical insight shaped their decision. Set up an experimental
to a decision
design to measure the impact of the change. Appoint a devil’s advocate to argue against a decision.

• Communicate the business value derived from the ability to measure, classify and decide in clear,
Communicate the value
9. quantifiable terms in relation to resource allocation, conversion optimization or outlier detection (or
derived
potentially another benefit, such as route optimization).

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Example: How a University Can Measure Precisely,
Classify With Granularity and Decide Empirically

Students who don’t graduate for Assemble a cross-functional

Metric: Six-year graduation rate Classify Measure economic reasons Decide team of decision makers.

Students who don’t graduate for

… academic reasons Identify options to improve the
Goal: 90% graduate … six-year graduation rate.

Professors associated with a Set up an experimental design

…
Our Metrics

Actual: 75% graduate high churn rate … for, say, students identified as
high-risk.

Leading indicator for six- Identify clusters of students who Create a pilot program in which
… don’t graduate … extra tutoring and advisors are
year graduation rate assigned to high-risk students.

Estimate for six-year Identify associations of students

graduate rate for future … who don’t graduate … Measure the results of the pilot
program.
period
Create an attribute importance
Time series of graduation rates … model for six-year graduation … Decide whether to expand the
over the past five years rate pilot program.

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