Analytics
For most of my life, my brain always felt stuck in rewind or fast forward. Then I discovered the missing pause button… mindfulness. Mindfulness and meditation gave me the tools I needed to be in the moment. I recently discovered the concept of prescriptive analytics, and it is having a similar transformation on how I look at and manage business.
Analytics are typically split into three categories:
- Descriptive Analytics – Rewind and ask what happened in the past
- Predictive Analytics – Fast forward and ask what might happen in the future
- Prescriptive Analytics – Pause and ask what you can do right now
Everyone I know is obsessed with the past (descriptive analytics) and the future (predictive analytics), and almost nobody is focused on the now (prescriptive analytics) – this is unfortunate.
Most organizations spend all their time building Tableau dashboards and Salesforce reports describing what already happened, assigning blame for things that can’t be changed. Some companies go a step further and immediately jump to the future to try and predict if all these same horrible issues will happen to them again. Nobody actually uses analytics to pause and think about what can be done right now in this exact moment.
I believe this is why so many companies are disappointed in the yield from their analytics and business intelligence investments. They are stuck ruminating about the past and worrying about the future, but fail to use prescriptive analytics to take action and change their situation in the here and now. It’s a sad cycle, really.
Prescriptive Analytics to the Rescue!
Mindfulness is defined as a mental state achieved by focusing one’s awareness on the present moment. Predictive analytics also focus on the present moment by looking at the decisions available to you right now and suggesting a course of action in real time. This piece is missing in almost every organization, and it is my opinion that that is why analytics investments fall short in the last mile of delivering actual business value.
At RelayiQ, we use the phrase “data-driven decision making” as a friendly short-hand way to describe “prescriptive analytics,” which can sound much more intimidating than it really is. Data-driven decision making requires that you:
- Engage in “descriptive analytics” by collecting data and measuring performance (typically shared in dashboards or reports)
- Set up a system of thresholds to monitor those descriptive analytics for changes that warrant action
- “Prescribe” the actions to take when the thresholds are reached
This may sound complicated, but it is actually deceptively simple. Let’s walk through use cases for sales forecasting, supply chain optimization, and compliance tracking.
Sales Forecasting
You likely already have a boat-load of descriptive analytics showing past sales performance. You can look at who added deals to the pipeline, how long it took to close them, what percentage of them closed, etc. However, you are likely not using this knowledge to intervene with prescribed action at the precise points when the historical data would suggest a given sales person (or group of salespeople) will miss their quota.
With data on hand, you can easily use predictive analytics to set up thresholds based on past performance in RelayiQ to catch issues like poor sales performance before they happen and assign prescribed actions to drive improvement and negate the issue.
Let’s say you have a team of 20 salespeople and each has a million-dollar annual quota. Perhaps your historical data shows that only salespeople who have $3 million in pipeline (3x coverage) logged in Salesforce by the end of Q2 ever make their annual quota. It is mid-Q2 and five of your 20 sales people are below that threshold.
What if you could automate the delivery of a prescriptive alerts to folks on your team headed for disaster as an intervention when this and other key thresholds were met? The custom prescribed alerts would detail actions to take such as further enablement, bi-weekly check-ins for more coaching, or an increase in new leads. These are typically the same actions you would typically prescribe at the end of the year when quotas have been missed – only now you are giving them (and you) a chance to succeed.
As a bonus, if you track the results of the automated prescribed actions delivered in the alerts, you can also measure over time which of the prescriptions are most effective, driving a flywheel of efficiency and growth.
Rather than dwell on missing your sales goal last year or living in anxiety over whether you will make your target next year, use prescriptive analytics and act in the now based on the best advice your data can give.
Manufacturing and Supply Chain Optimization
Data-driven decision making is helping businesses find cost savings and increase revenues in more efficient supply chains and cost optimization.
Let’s say you are a drug manufacturer that creates flu vaccines. You know your product follows seasonality, and you have great historical data showing the pattern for demand. You even have predictive analytics to map out the optimal sales volume. But how do you know how much material to order and when to place the order? Prescriptive analytics and customized alerts can be set to measure existing material (supply) and to notify those who can take action when the expected demand exceeds the current supply.
Regulatory Compliance Tracking
Managing sales and supply chain are both critical for the growth of your business, but managing risk through compliance tracking is equally important.
Failing to comply with important legislation such as Sarbanes Oxley, HIPAA, and FISMA can deal a deadly blow to your business, and descriptive analytics that evaluate what went wrong after the fact are not all that useful. What is needed are simple thresholds and alerts that let you know when it is time to take action to stay compliant before there is an issue. With prescriptive analytics, you can move from a passive to a proactive approach to GRC (governance, risk management, and compliance) and sleep well at night.
If you are ready to move on from the past and stop worrying about the future by taking action in the present, we would love to help you with this transformation. RelayiQ provides prescriptive notifications that sit right on top of your existing Tableau dashboards. You can try it for free, and we are here for you to make sure your trial is successful. Register for your trial here or sign up for a customized demo and make the change from being reactive to prescriptive. We are psyched to work with you to bring growth and sanity back to your business!