Analytics: Getting Back to Basics

There was a classic quote, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”, by John Wanamaker, a U.S. department store merchant in the early 1900s.

Analytics is about figuring out which half of your investment is wasted, so that you can either maximise the top line (i.e., increase revenue) or minimise the bottom line (i.e., reduce cost) to optimise your ROI. Analytics is about making intelligent decisions – it is a process of converting data into information, analysing information to identify insights, and developing a strategy and action plan that can make impact on business performance.

In the past, we used to blame the lack of sufficient data – it was very difficult, costly, and time-consuming to collect data and information for analysis. With advancements in technology, it is a lot easier to track and collect data and it costs a lot less now. Yet, we are still trying to figure out which half of the advertising is wasted as of a century ago, with a new challenge – there is too much data and information for analysis.

We need to think differently for analytics. First, the concern regarding data should not be a barrier; and secondly, we should focus on the whole process and the business results. Nevertheless, there are still many misconceptions when it comes to analytics. Hiring the head of analytics or purchasing world-class analytics software does not mean your organisation is building its capability of analytics. Therefore, it is important to understand the basics of analytics first.

The Basics

Analytics is not IT and it is not reporting. This is one of the common misconceptions that I have observed.

When it comes to analytics, many people still believe that it should be in the IT domain because it is related to technology. The first step in analytics is converting data into information while technology is only an enabler and reporting is the deliverable. We need technology to carry out analytics, but it does not mean that analytics should be driven by IT. Similarly, financial management needs software to generate financial reports, but it does not become part of the IT domain as it involves financial review and planning. Further, many people are still confused between the concepts of analytics and reporting. In my opinion, if nothing from a report is translated to insights that would make an impact on the business’s outcome, then it does amount to analytics but is just the process of reporting.

The second misconception is about the insights.

Insight is important and many organisations complain about reports that have no insights. First, I do not think it is right to expect analytics in a report, because a report only provides hard numbers to tell you what happened; meanwhile, you still need to find out why and what to do.

Identifying insights is a process of discovery and learning. It must be initiated by the people who know the business inside out, asking the right questions, analysing the connections across the relevant information, and identifying insights that lead to possible actions. This process of identifying insights cannot be outsourced to a party who does not know much about your business.

It is also an interactive and collaborative process between humans and data; hence, technology is playing an important role here for the business operational efficiency. Reports only provide static information, but we need to quickly and dynamically access the relevant data from multiple data sources to answer ad hoc business questions and discover insights. Without the use of technology, it would be very time-consuming and difficult to generate insights from the numerous static reports.

The last important point that I want to address is about the process of making an intelligent decision.

I have known many organisations that have assigned the responsibility of handling analytics to its staffs or outsourced it to third-party service providers. However, these staffs or the service providers do not have the authority and/or influence or power to be involved in strategy development and decision-making process.

As a result, the value addition that can be derived from analytics cannot be translated into actions that drive the desired business outcome.

There needs to be good integration and collaboration between the process of obtaining analytics, developing strategy, and the decision-making process. The siloed organisations and disconnected decision-making process is always a fundamental barrier in realising the value of analytics.


It is evident that information technology has seen vast growth over the years, thereby influencing our approach to business processes, strategic development and analytics. With the social media/web 2.0 going mainstream and the open data movement, the volume of data available on the web is growing exponentially and introducing many new challenges in terms of analytics.

Regardless of such challenges, we should always focus on the basic concepts of analytics. As we always consider people, process, and technology in any business, the same should be followed for analytics. We should understand that technology is an enabler – it allows people to access the right data and information to identify relevant insights, where these insights would be translated into strategy in the decision-making process.

Therefore, it is about making intelligent decisions and remembering that the core basic principles never change.

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