The Value of Data
The terms data analytics and big data sound like modern buzzwords that have been thrown around so much they have lost some of their meaning. Many find the concepts abstract and overwhelming, but data becomes a powerful tool when applied correctly. In this article, and the next three in our “Improve Decision-Making and Drive Action with Data Analytics” series, we will provide you insights on how to utilize data to its full potential.
Before you can begin a data analytics project to improve decision making and drive action, you need to understand what it means to conduct data analysis.
Data in a silo means very little. Hans Rosling illustrates the value created by data analytics in his book Factfulness. He presents the idea that a single piece of data can only really be inferred to mean something in the context of another relevant piece of data with which to compare it. Relevant comparison allows us to understand what a given number, trend, or occurrence means – and, consequently, what we should do about it.
Data Analytics Defined
Data analytics is not really, at its core, about collecting and processing as much data as possible (although that step may sometimes be involved). Data analytics is primarily the skill of identifying the right pieces of data to compare to one another in order to extract high-value information that can in turn drive an action, decision, or process and achieve better results for your business.
Data Analytics in Action
Many people have heard of either the book or the film Moneyball, which describes how the Oakland Athletics professional baseball team used data analytics in the early 2000s. The general manager of the A’s brought in an assistant manager who was versed in sabermetrics, the analysis of objective data in baseball. Although sabermetrics had existed almost as long as baseball itself, many considered it a niche field and professional clubs did not utilize it.
After incorporating a small handful of more accurate, more informative statistical measures of player performance – notably on-base percentage and slugging percentage – into the team’s player hiring function, the Athletics achieved a competitive advantage that allowed them to outperform teams with much higher payrolls. They won their division the very first year and the World Series two years later.
Management modified just one area of the team’s operations (the player hiring function), and just a few highly-informative metrics allowed them to achieve those results. Impactful data analytics requires the selection of the right issue for analysis, generally one with a large possible upside, and utilization of the right data to gain acute insight and drive results.
Analytics for All
Most of us, admittedly, do not manage the Oakland Athletics, but the same principles apply to any size business. For example, data analytics can help a medical practice, reduce cancellations and no-shows, compensate for or eliminate persistent appointment overruns, and identify causes and solutions to billing issues. No matter what type of organization you run, learning to gather and compare the right data to extract high-value information will drive impactful actions, decisions, and processes to achieve better results for your business.
Over the next three articles in this series, we will provide a detailed breakdown of the practical process of applying data analytics in your business, including how to identify the right issue to focus on, how to pick or gather the right data to analyze, and how to take action on that data and assess the results. By the end, you should have a good idea of how data analytics works powerfully for your business.
If you want to begin the process of using data to solve business issues, contact us to schedule a meeting with a Hantzmon Wiebel data advisory specialist.
Articles in the series:
Part 1:The Value of Data
Part 2: Starting with the End in Mind
Part 3: Selecting Data Sources