Reviewing data when your business model is weak can yield insights, but many are strategic and take time to implement - a factor if your business is on the ropes.
Increased interest in measurement has come with the increase usage of websites and social media for business and organizations. Analytics has been seen as a godsend for making better, profitable decisions. But missing in many conversations is knowing when analytics may not be helpful to a business. How would you know?
One of the best quotes on this comes from Competing On Analytics, a business intelligence book written by Thomas Davenport and Jeanne Harris
“Without a distinct capability (What you do to set your business apart), it becomes impossible to compete and distinguish what data is important.”
These aren’t the only authors who deem distinctive capability as valuable. A great quote comes from Lance Bettencourt, author of Service Innovation.
“Services that provide distinctive value to customers have more than three times the success rate of me too services.”
Developing that distinctive value rest with the business model. A business model is a description of how your business delivers its product or service -- how it delivers value. Having data without connecting it into the business model or operations is of no value to anyone. This is why analytics without a meaningful link to strategy becomes useless - it becomes a never ending reporting of metrics instead of discussion regarding taking action.
Moreover, a firm that thinks its online influence stops at webpage is kidding itself in this age -- thanks to social media and the advancements in website language and features, a site provides an extension of a shopping experience in many cases. (See the article on online browsing ) and well as allowing customers to research a business ( See the article on the link between offline and online customers )
So what should a business do when it is somewhat unsure how to leverage analytic capability?
1. Determine how far your organization is willing to modify its business model. What is the objective? Does it make sense? Does everyone understand it? If your business is not willing to consider modifications to how product and service value is delivered, then your business will ignore the insights an analytics solution can bring.
2. Determine the commitment to act to analytic findings. Management must decide what alerts and metrics are important from the collected data. What metrics should be monitored and how frequently? What changes in analysis are necessary as the business grows?
3. Make sure people are available to follow through on the decisions. When you see people as a cost center rather than an essential part of doing business, you run the risk of destroying a business because you lose the right people who can understand your business model and implement changes. For a small business or group, someone who has experience with a given industry and experience with some website language can be a boon and provide the best combination of analysis and action.
