Analytics and Business Intelligence is really about the conversion of raw data into optimal and actionable decisions to create tangible business value. Otherwise, what’s the point?

Starting from disciplines like machine learning and statistics, Analytics today has taken on a meaning and a life of its own. While the earlier efforts were largely technique oriented, BI today is far more Business oriented for better productivity and to justify for the immense costs involved (if you are using commercial tools). As a result the processes that make up the analytics effort have undergone dramatic changes.

An Analytics group of yesteryear was usually made up of statisticians (and technologists) that would huddle together in their corners, engaged in a black magic which was ill understood by the business. Instead of breaking down information silos, Analytics shops were themselves becoming silos that worked on their own agendas and often had ill-concealed disdain for ‘business’. This has changed over time and an effective analytics group cannot afford to be disconnected from the business.

While the processes have matured in Analytics today, unfortunately the commercial tools have not, and still continue to make some invalid assumptions. Foremost among these is the assumption that all of Analytics is usually done by a single person (or a bunch of similar know-it-all-magicians).

This is not true.

If Analytics delivers Business Value (as everyone seems to be loudly proclaiming these days), there must be a value chain! And there must be some distinct roles and activities that lead to the creation of this value (in the form of better decisions that ultimately make more money for the business)!!

The Analytics Value Chain

The Analytics Value Chain depicted above essentially shows the distinct roles that would exist in an Analytics group. There could be more roles, or a single individual might be handling multiple roles, but these are needed to ensure end-to-end delivery of comprehensive analytics. If you have been doing analytics, the diagram should be self-explanatory, otherwise I’ll elaborate upon it in the next post.

Did the pre-sales guy from that analytics vendor tell you that? Or did he push a product that can do it all but no one can fully comprehend and use?

For sanity’s sake, always keep the value chain in mind. If nothing else, it would mean you’d be clearer about what those twenty analysts are doing staring at those screens all day long.