I’m describing the three main attributes of an analytically driven, agile business. Let’s assume you read my last blog, “#2: Culture of integrating quantitative and qualitative into business decisions.” Now it’s time for the third key trait.
#3: A balanced analytical style
What is an “analytical style”?
When a company needs to use analytics to be agile, it often needs to calculate numbers. Most companies have finance systems and financial reports. Most manufacturing companies have operational systems, such as manufacturing execution systems, to run machines and tooling. Most insurance companies have claims reporting systems to report how many claims were adjudicated and the cumulative medical-loss ratio. Got it.
But what if you need to run an experiment or test an hypotheses? What if you need to forecast what will happen using predictive analytics? Where’s your capability to do that?
A balanced analytical style is a capability in which a company uses analytics to address different levels, different speeds, and different calculations at the same time and can choose the best approach to meet the business process need. All companies today have a mix. How good they are at balancing the mix can mean the difference between marketplace success or failure.
What are the different styles and why do they matter? In the analytics space, there are three dominant analytical styles. Balancing the mix improves agility because different styles are needed to serve different customers, products and channels. Since the market is always changing, rebalancing the mix is needed, sometimes frequently, sometimes less so. To be agile, you need the capability to find the balance and rebalance quickly and cheaply. It’s always changing.
The Operational (Retrospective) Style. The Operational Style dominates analytics today. It tells you what happened. This analytical style includes financial status, operational reporting, facts and data that help you run the business. The challenge with the Operational Style is making this information more easily accessible and easier to use.
The Real-time Style. Real-Time Style is an analytics process designed to influence a decision within a specific context at the point of decision making. It tells you what is happening now and enables you to respond in near real-time with an appropriate action. We see this when a call center agent can respond on the fly to new information you’ve provided in an interaction.
The Future Style. The Future Style of analytics looks at a variety of sources of information and intelligence and applies sophisticated modeling to predict what will happen next. The realm of predictive analytics, the Future Style anticipates changes and provides a window to act proactively.
In future blogs, I will examine each of the three analytical styles in more depth and speak to how they can be used in a strategy that blends them.
Closing Comments on the Creating the Analytically Enabled, Agile Company
Is your company analytically enabled? To some degree they all are. Do you have the right mix? It takes more than technology: it takes a strategy, it takes a desire and the capability to experiment. It takes a balanced analytical style. You need all of this to be successful. The right mix, the right balance, the right ways to implement it are hard to get right. Start now.