Subscribe to RSS feedWhat is Analytics?
Posted by Kyle on June 9, 2008
The other day, I came across a post titled, “The most important thing I know about Analytics is that no-one agrees what it means.” Interestingly enough, my colleagues and I have been working to define the same, and my working definition after a few iterations was:
Analytics is the intelligent use of data and models to discover relationships and causations that companies can use to obtain a competitive advantage by predicting outcomes associated with their processes, customers, and products.
Admittedly, this definition is still fairly broad and doesn’t fully answer my clients’ questions about what it is – or how it is different from all of the Business Intelligence (BI) work they have been doing. In the book, “Competing on Analytics,” the authors describe analytics as a subset of BI, and include a chart that illustrates how analytics can leverage data in the existing BI store to achieve competitive advantage:
One of the best ways I have found to explain analytics is to describe the types of insights it can offer across the enterprise. Below is a sample of some of the applications I’ve seen of analytics across the value chain.
potentialrevealed said
I like the value chain depiction. This perspective is useful because it helps to distinguish between analytics as a capability (and corresponding tools, techniques, etc.) and the actual departments (e.g., marketing), functions (e.g., business intelligence) and roles (e.g., marketing analyst) that might find value in using analytics. I too in experience find leaders, peers and clients getting stuck trying to differentiate analytics from other buzzwords they heard or tried to harness (good example: business intelligence). My view is that analytics is different — it is not simply a new function or technology, it is capability that can change and improve all aspects of your business performance.
Good D « Potential: Revealed Weblog said
[...] not to be confused with the general, pervasively useful capability of “analytics” (see Kyle McNamara’s blog for a clear view of analytics). Possibly related posts: (automatically generated)First Look: [...]