What is in this article?:
- Don't Wait Till Your Customer Leaves to Start Studying His Buying Habits
- Learning from Past Mistakes
- Organizational Cholesterol
- Managing Risk and Preparing for Disasters
- Predicting Customer Loyalty
- Attracting and Keeping Talented Employees
- Targeted Marketing
- Product Differentiation
- Analytics vs. Singular Metrics
- Time Perspectives
You've probably heard or read something about analytics, a hot topic these days with finance and IT types. You are probably also a little confused about what analytics are and how they might be useful to your organization. The world of finance is characterized by tracking and studying individual statistics like sales revenue and costs and ratios like assets/liabilities, or overhead costs/total costs. While these are important statistics, analytics are more sophisticated numbers used to track and predict future performance in a business.
Organizations spend a lot of time and money measuring the past. Pretty much all traditional financial metrics (sales, profits, costs, adherence to budget, stock price, etc.) are measures of the past. Most non-financial metrics are also measures of good and bad things that have already happened: lost customers, accidents, new accounts landed, acquisitions completed or sold, employee turnover, customer complaints, patients discharged, etc.
The good thing about measures of the past is that the data tends to have high integrity. In other words, there is no uncertainty when an employee quits, a customer closes her account, or when we buy another company. Past-focused metrics tend to be based on reality and hard to deny.