My last column focused on where analytics should live within an organization, primarily looking at IT versus marketing. I made the case that analytics must be more closely tied to the business/marketing side to be actionable and to truly drive change, but there must be solid collaboration with the technical side as well.
The column happened to publish on the second day of Jim Sterne’s Emetrics conference, at which I spoke at a few sessions. A number of people pulled me aside and discussed their take on where analytics should live and shared some other things people had been discussing throughout the week.
Analytics reporting into finance rather than marketing or IT is one interesting trend. There are a lot of good reasons this could make sense, but a number of things to watch out for as well. No matter where analytics ultimately lives, it must be fully integrated into a number of groups within the company.
Based on these discussions and past experience leading many analytics and optimization engagements, I put together a list of some pros and cons for having analytics report into the finance department.
Benefits of Analytics Reporting to Finance
- A third party isn’t influenced to spin positive results. This is a big one. You want to know what’s really happening on the Web channel, not what a Web analyst does to “analyze” the data to tell a good story. However, if goals and key performance indicators (KPIs) are defined correctly, it becomes much harder to twist the data and site performance. No matter where analytics reports are, you must lock down how you measure success to avoid this.
- It’s easier to identify financial impact of Web initiatives. We always look to monetize all the key site behaviors online, not just e-commerce behaviors. Working closely with finance is always key to doing this. Reporting to it would make this even easier.
Potential Issues With Analytics Reporting to Finance
- You could fall into reporting past actions rather than identifying future opportunities. This is a natural issue no matter where the analytics team reports, but it could become even more of an issue when reporting into finance due to the nature of financial reporting and its focus.
- Analytics must be tied to optimization to be most successful. Analytics and optimization must work hand in hand and really need to be working together on a daily basis to make both groups most successful and realize all the analytics’ and optimization’s potential. The optimization group really must sit on the Web marketing team.
- It’s too far removed from the people who can make the regular changes to really affect performance. Possibly the biggest concern: you may be creating barriers between the people who can make the recommendations and those who can act on them. Companies already have issues in this area, and moving analytics to finance will most likely only make this issue considerably worse.
- Lack of accountability to the Web team could delay the ability to turn around important analysis requests. Without a direct reporting structure, there’s a risk of not being able to push the analytics team in terms of priorities based on what the Web team really needs.
- A great Web analytics team is based heavily on marketing and Web strategy skills as well as data expertise to identify opportunities and make recommendations. This is often very different than most finance department skills sets and personalities.
Yes, there needs to be strong integration with finance (and many other groups), but optimization and analytics must work together. And there’s a huge risk of analysis turning into just reporting if it’s in finance and too far removed from the people who can make the day-to-day changes on the site.
Ideally, you can create hooks in all three groups and others so you have an integrated approach where everyone is held accountable for their actions (or lack thereof). Ultimately, though, analytics and optimization should be within the marketing group’s Web team. Regular meetings between those responsible within each group to share opportunities, successes, and financial impact to the business will help greatly.
As always, I welcome feedback and look forward to hearing what’s working with others!