Businesses owners today are doing more than ever to utilize the data they take in, “information is gold”. They are operating with more knowledge about their business than was even possible just a decade ago, allowing them to predict positive and negative market dynamics. The problem that many businesses encounter, however, is that they are woefully unprepared to utilize analytics; or, they can read too far into and misinterpret them. ActiveCo always like to plan, plan, plan and knowing what tools you have and what they’re telling you can help you navigate your business to further success!
Are You Prepared?
To get reliable analysis through analytics, you will first want to set up a “data warehouse”. A data warehouse is essentially a database that is fed by your existing databases. By having all of your business’ information in one spot, it will make your analysis, whether it’s conducting analytics or intelligence reports, more accurate and reliable. This should be set up securely and most certainly by an IT professional who can work with you, the business owner, to better understand your success criteria.
Once you have your analytics platform set up properly, you are ready to run reports. There are a couple really simple, but crucial, mistakes people routinely make when reading their analytics reports.
- Correlation Doesn’t Always Mean Causation – There are times when you will be looking at two metrics and they are so amazingly similar that it can’t possibly be a coincidence. You then discover that the two seemingly correlated variables have no direct (or indirect) relationship with each other. It’s important that you don’t read into every similarity.
- Make Sure to Keep Everything in Context – When you are actively using analytics and you start making headway in one facet of your business, it can be intoxicating. Make sure to not transfer a false optimism that other numbers will react the same way if the indicators say they won’t.
- Just Too Much – Whether you are just tracking too many metrics, or you are tracking some that are completely meaningless for your situation, wasting time with certain metrics is just convoluting your practical understanding of your business. Scale it back for more success.
- The “Wow” Factor – Metrics that report highly positive or highly negative swings will always be alarming, but if they are reported very infrequently, you can consider them outliers and exclude them in your overall report. Always best to track these and follow up with your team to agree on any discrepancies.
It’s great when you decide to let the data your business collects work for you. Just don’t let improper setup of the analytics system steer you wrong. It’s best to ensure your team understands the metrics, as well. Knowing what the data, and any changes, means can help your team course-correct, or just better plan for the future.
As always, when your analytics show that your team are, indeed, meeting their goals, do your best to announce or celebrate it! This not only improves morale but garners significant buy-in for the data being tracked and understood.
If you would like some information about how to integrate data analytics into your business’ call the IT professionals at ActiveCo Technology Management today at (604) 425-3433.