Many people are talking about data insights, or data analytics, without exactly knowing what they mean. They’ve heard that the company will benefit but don’t know how to get there. They might try to “throw money at it” and hire talented Data Scientists hoping they will magically get results, but that’s not the way it works.
Getting the right results all starts with what you do with your data. You collect data on your members based on their business activities. Now you must apply mathematical techniques to this data to obtain analytics. You then apply business knowledge to your analytics to gain insights. These insights will ideally provide you with information about your business that will allow you to act. For example, it might be an insight around payment trends that can help you work with members before there are problems, or it might be an insight into something new happening in the industry that you have to react to.
To understand data, analytics, and insights, think about a painting. Stand inches from the painting and you see brushstrokes and dots of paint. It’s just a bunch of stuff without any context that doesn’t make sense to you. That’s data. Now step a few feet back and look at the painting again. At this point, you’re starting to see forms take shape. You might see people or buildings, but there’s something there beyond those brushstrokes and dots. Think of that like your analytics. Step further back. You’re able to see that painting in all its glory. Your emotions take over, and you’re able to read something into it that you didn’t initially see. It’s not about dots anymore. It’s not necessarily about that single building. It’s about what the complete image is telling you. It could be different from the artist’s statement that goes along with the painting. Those are insights.
Applying business logic to analytics to get insights is essential. What you don’t want is to stop at analytics. Mathematically, you can often find a way to interpret the data to get it to say what you want it to say. How many times have we seen questionable statistics in the media? Make sure that there are subject matter experts dedicated to supporting the Data Scientists to apply knowledge to the analytics they see. They’ll be able to work together to interpret those analytics accurately. You must also ensure that you have the right people working together to turn data into analytics and then into insights.