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As goes business, so go your business analytics. Right?

by Dave Hannon

June 10, 2011

By Dave Hannon


During the recent recession many companies were focused on controlling costs and managing operations. Getting lean. Reducing headcount. And a keen focus on retaining existing customers. Many were in survival mode, but the savviest of companies were using business analytics to help manage their way through the darkest days.

Today, things are different. Business goals are different. Markets are different. Priorities are different. And your business analytics are different. Aren’t they?

The data says they are. Last year Babson’s analytics guru Tom Davenport and SAP co-CEO Jim Hagemann Snabe surveyed more than 300 executives on analytics and one of the more interesting findings focuses on how businesses change KPIs based on business trends.

As Davenport wrote in a review of the study here in his Harvard Business Review blog, “In a down economy, executives want information on receivables and payables more quickly (50% mentioned this type) as well as on budgets, spending, and costs (also 50%), cash flow (47%), strategic and operational risk (40%), and employee performance and productivity (36%). In a growing economy, executives said they want information more quickly on employee satisfaction (27%), market share (13%), inventory levels (12%), supplier and pa rtner data (12%), and scenario plans and simulations (12%).”

Makes sense, right? So given that we’ve gone through – or are still going through – one of the most dramatic economic swings in recorded history, what shows up in your company’s reports – especially executive reports – should not be the same set of metrics that were showing up on the same reports 18 months ago. I don’t mean the numbers should be different (I hope they are!), I mean the numbers you’re most concerned with should be different. Your business has shifted gears operationally, so it needs to do so analytically.

The good news is, I think, this is true, at least anecdotally. I certainly hear more companies talking about how they can leverage data and analytics to “grow” business rather than “manage” business. Using analytics to improve employee satisfaction and retention was a hot topic at this week’s HR 2011 conference, as evidenced in the keynote.

This article in insiderPROFILES about Campbell Soup’s analysis of profitability is a great example of using analytics to drive growth. And this article about Colgate-Palmolive outlines the benefits of executive analytics, including the ability to “determine positive or negative financial conditions by simply scanning through the dashboard reports looking for green , which reflects improvements in the company’s financial position. “

And of course, solution providers are always a step or two ahead of these trends, putting out solutions that help customers meet their goals. For example, SAP this week announced the SAP Trade Promotion Optimization application, which provides “predictive analytic capabilities to enable marketing and sales teams to systematically predict and optimize promotion outcomes, including revenue and profit, for both manufacturers and retailers.”

Probably not the type of solution a lot of companies were looking for 18 months ago, but now, as they rush to gain customers, revenues, and market share, it’s just what the CEO ordered.

So it’s a question you should ask within your own organization: Have you changed the reports, the analytics or the dashboards your executives use to better reflect the goals of your business? Or are you measuring the same list of things you measured during the depths of the recession? And do you have the right technology in place to capture and analyze those metrics? 

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