Analytics is about extracting knowledge from data. The extracted knowledge is of little value unless it assists users to understand issues and reach decisions. One of the failings of analytics is that the important insights it provides can be ignored because they are not embedded in a tool or product that assists users to grasp their significance and take action. It is an overriding requirement to provide decision capabilities that are customised to the user’s way of thinking and the user’s information needs so that they can respond to challenges, crises, threats and opportunities.
Simple artefacts such as dashboards, score cards and profiles can be sufficient to meet users’ needs for what is sometimes called ‘actionable intelligence’. For complex and difficult problems it can require more sophisticated solutions such as a decision cockpit. The cockpit of an aircraft has various dials and screens that inform pilots of the performance and safety of an aircraft. Decision cockpits do the same: they inform decision makers of the status of issues and where threats and opportunities may lie. An example is informing bank staff of customers who are at risk of defaulting on their loans.
Ideally the decision capabilities should have tools that allow users to perform ‘what if’ exercises to test hypotheses and hunches and to evaluate options. They can also include simulations and games.
Simulations enable users to experience what it would be like if they were in real situations, such as a pilot flying an aircraft that is nearly out of fuel. Analytics can assist by working out which is the best location to land the aircraft in an emergency.
Games are contests where users are trying to outfox, out manoeuvre or outplay an opponent such as in a war game or a business game. Analytics can calculate the likely benefits and costs of each move by the user and the same for the opponent to reveal which moves are more likely to be successful in winning a game.
The above illustrates that analytics and decision making go together like a hand in a glove, and are integral to achieving business outcomes. They are both important and they need to be considered when designing solutions to solve problems.
The Data Analytics for Effective Decision Making conference, taking place in Sydney this November, will examine strategies for unlocking potential in an increasingly data-driven culture. Book by September 30th to save $200 on ticket prices.