Module7lesosn2.docx

Making Insight Actionable

Many companies that utilize data analytics are not receiving any actionable insights. It seems that what they are getting is more information, but not insights. Understand that data, information, and insights are not synonymous. They are separate and reside at different levels of a pyramid-shaped hierarchy – the foundation is data, the main structure consists of information, and the very top is where insights reside.

To understand what actionable insights are, we need to recognize the differences between data, information, and insights.

Data can be found in databases and spreadsheets, and by itself it is meaningless. Raw data comes in the form of numerical and textual formats. All data is either quantitative (measured) or qualitative (observed) in nature.

Information is data that has been managed and organized into a format that is easily understood. Data visualizations, reports, and dashboards are examples of information presented in a contextual form.

Insights are developed by analyzing the information provided, which allow us to develop assumptions.

Overall, data and information provide insight that will allow for better decision-making, which in turn, gives a company an advantage.

Not all derived insights necessarily lead to action. Many insights can be attributed to coincidence, which might never happen again. For example, in February an amusement park noted that ticket sales doubled, but it cannot be assumed that a new advertising campaign caused the increase; this anomaly could have occurred due to harsh winters in the Northeast.

Factors to Determine If Insight Is Actionable

To determine if an insight is actionable examine several factors involved:

Association

If an insight is closely associated with the main business objectives and planned a course of action, it is probable that it could be exploited. Lack of understanding how a metric will affect the overall outcome of the immediate objectives means it will be avoided, even though it may have positive effects on the business as a whole. If an insight is close to home and is based on key performance indicators (KPI’s) that are constantly monitored, it will provide a sense of urgency that other unassociated insights might not have. It is more common to act on insights that directly influence portions of a business that are under your control.

Situation

To act on an insight that lacks the appreciation as to why it might be important is difficult to employ. What is needed is some reference point, which will allow proper decision-making. A previous example was given that involved increased ticket sales for an amusement park in February; if you knew that a new advertising campaign was just launched and the Northeast encountered a harsh winter during the same timeframe, you could attribute the increase the sales to the campaign, the weather, or both. Examine ticket sales in previous years to determine which factor had the most effect. Any time you glean insight from your gathered information, remember to look at other factors that might have also contributed to this insight before any action is taken.

Significance

Acting on insight is subjective; the insight might be very significant to one person, while unimportant to another. An insight needs the attention of someone who might hold it significant to be relevant. The insight needs to be brought to the attention of a proper decision-maker promptly. Otherwise, they will be overlooked, and an opportunity could be lost. The analytics and visualizations that are developed that might hold these insights need to be presented in such a way that will reach the right decision-maker at the right time. The timing and audience for the delivery of analytics is important if the desired results have a chance of being materialized.

Comprehensive

A comprehensive and detailed insight has a much better chance of being acted on than one that is vague and imprecise. Highlighting anomalies that occur with KPI’s and other important metrics can sometimes lack details to warrant any action. For example, do not act on a favorable sales increase that might be detected in visualization. Before you assume the best, you need to get more details to ensure that other factors not discussed did not play a part in the increase. Question these insights as they occur because they might have been caused by simple bookkeeping error or based on erroneous data. If the insight does not explain why a situation occurred, it should not be considered actionable until further research is conducted.

Innovation

When encountering a unique insight that stands out among routine insights, it warrants further scrutiny. The routine and familiar insights seen on a regular basis will become less important if something new and unique shows up. Testing any new unique insight could lead to beneficial findings. Be careful not to overlook familiar insights that have had a positive impact in the past rather than focus on the unique.

Unambiguous

If an insight is ambiguous and its importance not easily understood, it can be easily overlooked and unused. Clear and effective communication as to how insight can be beneficial is important if we want to see it put to use. This can be accomplished by creating good visualizations and explanations so they can be easily understood and interpreted in a manner you foresee. If an insight is presented properly with emphasis, it will be easy to comprehend, identify, and allow the action to be taken.

By utilizing these criteria, determine the degree of how actionable your insights might be. The more your insights align with these factors, the more actionable they will be.

Many barriers will be encountered that will have to be overcome to make state-of-the-art analytics and visualizations a realistic method of gaining beneficial insights for your company. If you have the backing of upper management and can get everyone on board in the use of analytics, derived insights and action ability, your organization will prosper.