Innovation in this fast moving world is arguably one of the most important factors that will enable a company’s long term success. But many times, while leaders are looking forward to forge new territory and bring to life their customer value, they often get caught up in hypothesising and making assumption based decisions. These decisions, however big or small, will ultimately effect the direction of the business.
Incorporating a strong use of data and analytics as part of your decision making and innovation DNA will help you execute with a greater level of accuracy, while continuing to learn about your business effectiveness, why things may or may not be happening and keep your finger on the industry’s pulse. It will also allow you to look deeply into your company’s workings and gain valuable insight that can help you stay leagues ahead of your competition.
Descriptive and diagnostic analytics, which for most companies will be the beginning of their data and insights journey, provide companies with the insight they need to start asking backwards looking questions. Descriptive and diagnostic analytics is the base level for companies looking to become more driven by their data and insights. At its most basic level, these start with:
- What happened?
- Why did x happen?
- When will x happen?
- What should you do when it happens?
This allows business owners to look at the root cause of events and determine the how and why something happened to their business. For example, if their sales fell, descriptive and diagnostic analytics would allow them to discover exactly why and when it happened so they can decide what to do to improve it and try to prevent it from happening again.
In this case, it has a positive impact on the company because it can boost sales and improve the overall sales model to prevent them from falling significantly. The business can see better profits all around.
How to Apply Descriptive and Diagnostic Analytics to Your Business
There are several parts to descriptive and diagnostic analytics that are gaining traction and becoming more relevant to innovative corporations. They include but are not limited to:
- Real-Time Dashboards– Management tools have to be up to date and mobile friendly as managers transition away from sitting at their desks. It’s a visual representation of how the company’s doing in real-time. They allow for instant and ongoing improvement, continuous monitoring and ensuring your company stays on track.
- Statistics– Cold, hard, numbers don’t lie. They give executives an exact idea of what their clients want, and what’s not working. They help businesses plan their production schedules to meet demand, and this results in higher brand loyalty.
- Trend Models – Trend analysis and models allow businesses to look for patterns in both current and historical trends and compare how their business growth was during these times. Trend models help businesses predict trends and improve their responses to have a consistent response.
- Data Visualisations – Graphs and charts let businesses tell a visual story across all of their departments. They give clear and concise way to pinpoint areas that need improvement, clarify what drives consumer behaviours and predict sales volumes so the business can respond accordingly.
- Drill-Downs– Drill downs allow business owners to find out the “why” behind trends or problems they may have. You pick certain metrics and “drill down” to the root cause so you can address it. This is easy to do if you have an entire team on-hand that all have a clear and defined focus.
Keeping your company relevant in this competitive age is a must, and the best way to accomplish this is through descriptive and diagnostic analytics. You’ll get a deeper understanding of your business, and be able to focus on long-term and stable growth.
If you’re looking for a place to start your analytics journey, take a look at the top considerations for building your data & insights capabilities in 2019.